AM Best Stabilizes SCOR SE Ratings
Stable Outlook Assigned as SCOR Revises Its Business Strategy
AM Best has affirmed the credit ratings of SCOR SE and its key subsidiaries, removing them from review and assigning a stable outlook. This decision comes after a thorough review of SCOR’s recent financial adjustments and strategic changes within its life and health (L&H) business.
The company’s ratings had been under review since July 2024, when SCOR revealed it was reassessing its L&H reserving assumptions alongside its second-quarter results.
The review highlighted significant impacts on the segment, including a €700 million loss due to the revised assumptions. In December 2024, SCOR outlined a new strategy for its L&H operations, focusing more on longevity-oriented products and financial solutions, rather than traditional protection offerings.
These financial adjustments were reflected in SCOR’s nine-month results for 2024. The L&H segment reported a €467 million loss, leading to a €229 million loss in the company’s overall net income for the period. Despite these setbacks, SCOR’s property and casualty reinsurance division performed strongly, and the firm benefited from robust investment income, which helped mitigate the losses.
However, the changes to L&H reserving assumptions also contributed to a €800 million reduction in SCOR’s pre-tax contractual service margin (CSM).
AM Best noted that while SCOR’s risk-adjusted capitalization is expected to decline by the end of 2024 due to these challenges, the company’s capitalization remains strong. At the close of 2023, SCOR’s capital position was rated as “very strong” according to AM Best’s Capital Adequacy Ratio.
SCOR’s solid financial footing is bolstered by a conservative investment portfolio and retrocession programs, which include new stop-loss protections for 2025-2027. Nonetheless, the company’s reliance on hybrid debt and the value of its in-force life business as part of its capital structure remain aspects to monitor.
Despite these challenges, SCOR continues to maintain its position as a top-tier player in the global reinsurance market, with a well-diversified portfolio and robust client relationships. The company’s extensive global reach and technical expertise enable it to navigate market cycles effectively, even with the ongoing issues in its L&H segment.
AM Best also affirmed the ratings for several of SCOR’s subsidiaries, such as SCOR UK Company Limited and SCOR Global Life USA Reinsurance Company, 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.