French reinsurance giant SCOR has warned of potential losses in the “high double-digit EUR million range” in the first quarter of the year as it reels from the impact of the ongoing conflict between Ukraine and Russia.
In a statement, the company said that it has been monitoring the situation closely to assess the war’s potential impact, along with that of international sanctions, on its global reinsurance business.
The firm noted that its Russian subsidiary, SCOR PO, has been directly affected by the conflict and has stopped underwriting new business, adding that major losses were anticipated in several of its business lines, including political risks, credit and surety, and aviation.
“SCOR expects a Q1 2022 charge in the high double-digit EUR million range for potential claims related to the conflict across both treaty reinsurance and specialty insurance,” the firm said. “As the conflict continues, this estimate will evolve.”
The company also noted that the estimated cost of the conflict would be added to other first-quarter charges, such as natural catastrophes – including the windstorms in Europe, floods in Australia, and drought in Brazil – and the continuing impact of the COVID-19 pandemic in the US.
“These developments will have an adverse impact on SCOR P&C’s combined ratio and on SCOR L&H’s technical margin, and are expected to result in a quarterly loss,” the firm said.
SCOR, however, added that the company “remains very well-capitalized,” and its Q1 solvency ratio is expected to stand at a level “significantly above the 226% position reported at the end of Q4 2021.”
The firm’s Q1 2022 results will be published on May 06.