FINANCIALS
Scor (SCOR: A-/BBB+) issued a profit warning last night which is seeing both equity and bonds hit this morning. Its index bonds are streaming an average of 18bp wider with equity down over a quarter. Scor is already trading wide of (similarly-rated) Axa, and it had underperformed€IG insurers into this event anyway, so we’d see this as contained but unlikely to revert before seeing fuller results on 30 July, at best.
- Scor issued a one-page profit warning last night indicating a reassessment of reserving, alongside more negative experience variances, meant its Life & Health profits were going to miss consensus. The business was targeted (at 1Q24) to make c.EUR0.5bn of profit (ISR) in FY24 but is going to see a negative c.EUR0.4bn in 2Q24 alone. FY24 net income consensus was just EUR722m so this could easily wipe out all profit this year.
- Solvency II is still (allegedly) going to be above 200% at Jun-24 balance sheet, consensus was previously 217%. So, this is clearly a major equity event, but that level of solvency capital is certainly adequate and only, in our view, impacts equity cashflows.
- The wider question is the laterals to other French life & health companies (likely negative but unquantifiable – largely Axa but it’s far more diversified) alongside the trust and confidence issue in Scor management. Again, unquantifiable.
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