By Elena Vardon

Shares in Scor jumped after the French reinsurer said it completed its life-and-health's division review, which analysts see as a sign that its capital position is safe.

The stock traded around 8% higher in early exchanges at 22 euros, limiting its year-to-date losses to 17%.

The Paris-listed group said Thursday that the assumption review--which involved deep dives covering the U.S., Canada, South Korea and Israel--will have a negative impact of 210 million euros ($222.6 million) on its third-quarter life-and-health insurance service result. It will also lead to a positive 200 million euro adjustment on its pretax contractual service margin.

Since the start of the year, the review has led to a cumulative negative hit on both metrics of around 700 million and 800 billion euros, respectively, it said.

In July, the group said it accelerated its review of its annual reserving assumptions for the unit following the adverse experience in U.S. mortality it flagged in the first quarter.

"The very comprehensive review allows us to draw a line and move forward with confidence," Chief Executive Thierry Leger said. Scor will present progress on its three-step strategy for the unit at its investor day in December.

The review's lower-than-feared impact removes the capital overhang, securing Scor's dividend for the year, RBC Capital Markets said in a note to clients. It is "another encouraging sign that management is keen to address the issues that it finds in the business as quickly as possible," JP Morgan analysts wrote.

The update was published alongside its third-quarter results. For the three months ended Sept. 30, Scor swung to a net loss of 117 million euros, compared with a 147 million euro profit a year prior. Excluding the life-and-health assumption review, net profit would have amounted to 150 million euros.

The company reported an on-year fall in insurance revenue to 3.94 billion euros, while gross written premiums rose 2.4% to 4.985 billion euros, it added.

Its property and casualty revenue saw softness compared to the previous year as a large multi-year contract wasn't renewed. The combined ratio--a measure of underwriting profitability--was 88.3%, against last year's 90.2%.

Scor estimates that Hurricane Milton--which made landfall in Florida at the start of the fourth quarter--will result in losses in the mid to high double-digit million-euro range, before taxes and net of retrocession.

"We expect the P&C reinsurance market conditions to remain attractive in 2025," Leger said.

Regarding its investment portfolio, which is mainly invested in fixed income and had 23.32 billion euros in total assets as of Sept. 30, Scor reported a 4% return for the period and a 3.5% regular income yield. The group expects this division to continue to benefit from high reinvestment rates.

Scor said its group solvency II ratio--a key measure of capital strength--stood at 203% at the end of the quarter. This appears sufficient to maintain the annual dividend, Jefferies analysts said. The reinsurer declared a dividend of 1.8 euros a share for 2023.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

November 14, 2024 05:28 ET (10:28 GMT)

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