After the quarterly update provided by the global re/insurer, AM Best has placed the financial strength rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a+” (Excellent) of SCOR SE (France) and its main operating subsidiaries under review with developing implications.
In a press release, SCOR announced its decision to accelerate the review of its life and health (L&H) reserving assumptions due to negative experience variance in the first quarter of 2024. As a result, the L&H insurance service result (ISR) is expected to be EUR -400 million for the second quarter of 2024, driven by updates on reserves and negative experience variance.
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The L&H ISR for the full year 2024 is now projected to be significantly below the previously communicated target of EUR 500 million. Changes in reserving assumptions will also impact the organization’s pre-tax L&H contractual service margin (CSM), with a negative adjustment of EUR 900 million as of the second quarter of 2024, based on current yield curves.
Read More: SCOR provides update on Q2 2024 results
SCOR indicated that the reserving review is ongoing and could lead to further negative adjustments to the ISR or CSM during the second half of 2024 in a worst-case scenario.
AM Best expects the ratings to remain under review until SCOR’s reserving review is finalized, the new strategic plan for the L&H business is disclosed in December 2024, and AM Best completes its assessment of the impact on SCOR's rating fundamentals.
The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) were placed under review with developing implications for SCOR SE and its operating subsidiaries, which include SCOR UK Company Limited, SCOR Reinsurance Asia-Pacific Pte Ltd, SCOR Global Life USA Reinsurance Company, SCOR Global Life Americas Reinsurance Company, SCOR Global Life Reinsurance Company of Delaware, SCOR Reinsurance Company, SCOR Canada Reinsurance Company, General Security National Insurance Company, and General Security Indemnity Company of Arizona.
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