Fitch Ratings turns positive on SCOR

Core Viewpoint - Fitch Ratings has revised the outlook for French reinsurer SCOR and its core operating subsidiaries to positive from stable, anticipating improved earnings particularly in life and health (L&H) due to portfolio actions aimed at restoring profitability [1] Group 1: Ratings and Financial Strength - Fitch has affirmed SCOR's Insurer Financial Strength (IFS) ratings at 'A+' and Long-Term Issuer Default Ratings (IDR) at 'A', reflecting SCOR's strong position in the global reinsurance sector [2] - The subsidiaries with affirmed ratings include SCOR Global Life Americas Reinsurance Company, SCOR Ireland, SCOR Canada Reinsurance, and several others [3] Group 2: Earnings Recovery and Performance - SCOR is expected to have a strong recovery in earnings in 2025, with further but milder improvements in 2026, benefiting from management actions related to reserve buffers and new business initiatives [4] - For H1'25, SCOR reported an insurance service result (ISR) of €682 million, a significant increase from €126 million in H1'24, driven by strong property and casualty (P&C) results [5] - The P&C combined ratio for H1'25 was 83.7%, improved from 87% in H1'24, aided by a lower natural catastrophe contribution [6] Group 3: Capitalization and Financial Management - SCOR's capitalization is rated 'very strong', with a Solvency II (S2) ratio of 210% at the end of H1'25, remaining stable and within the optimal range [7] - The financial leverage ratio was 20% at the end of 2024, consistent with the rating, and SCOR issued €500 million in Tier 2 subordinated notes in September 2025 [8] Group 4: Reserving and Risk Assessment - SCOR's non-life reserving is viewed as prudent and well-governed, with strengthened P&C reserves since 2023 to address rising inflation and latent exposures [8] - Fitch will continue to monitor SCOR and its subsidiaries, which may lead to potential upgrades or downgrades [9]