SCOR’s ratings had been under review since July 2024, when the company announced a detailed reassessment of its L&H reserving assumptions alongside its second-quarter results.
The review revealed significant impacts on the segment, including a €700 million hit from revised assumptions. In December, SCOR laid out a new strategy for its L&H operations, signaling a shift away from protection products toward longevity-focused lines and financial solutions.
The financial toll of these adjustments was clear in SCOR’s nine-month results for 2024. The L&H segment posted a €467 million loss, dragging the company’s overall net income for the period to a loss of €229 million. Despite this, strong technical performance in property and casualty reinsurance, as well as robust investment income, helped soften the blow.
However, changes to L&H reserving assumptions also reduced SCOR’s pre-tax contractual service margin (CSM) by €800 million.
AM Best noted that while SCOR’s risk-adjusted capitalization is expected to decline by year-end 2024 due to these challenges, it remains strong overall. At the end of 2023, the company’s capital position was rated as “very strong” under AM Best’s Capital Adequacy Ratio.
SCOR’s solid balance sheet is supported by a conservative investment portfolio and retrocession programs, including new stop-loss protections for 2025-2027. However, its reliance on hybrid debt and the value of in-force life business as part of its capital structure remains a factor to watch.
Ultimately, SCOR continues to hold a top-tier position in the global reinsurance market, with a well-diversified portfolio and strong client relationships. Its global footprint and technical expertise allow the company to navigate market cycles effectively, even amid ongoing challenges in its L&H segment.
AM Best also affirmed the ratings for SCOR’s subsidiaries, such as SCOR UK Company Limited and SCOR Global Life USA Reinsurance Company, among others, and confirmed the stable outlook for its subordinated notes. These include €500 million 3.625% notes due in 2048 and €600 million 3.00% notes due in 2046.
