SCOR beats combined ratio targets
SCOR’s property and casualty new business contractual service margin fell 16.1% in the third quarter of 2026, dropping from €170 million to €142 million. The reinsurer attributes the decline mainly to a retrocession timing effect, rather than any contraction in underlying business volumes or margins.
New business CSM represents the forward earnings pipeline from business written in a quarter. A 16% quarterly fall would typically signal underwriting pressure. SCOR, however, states this is not the case. The nine-month result was driven by reinsurance volumes and lower retrocession ceded margins, which offset deteriorating reinsurance margins. The overall figure remained stable, but the composition suggests inwards pricing pressure that retrocession buying is actively compensating for.
Strong Combined Ratio Performance
While the new business CSM dipped, SCOR’s P&C combined ratio improved to 84.1% in Q3, beating the Forward 2026 plan target of below 87%. This includes a natural catastrophe ratio of 9.1%, reflecting the Colombia earthquake and a cluster of smaller events. These losses were active by recent standards but remained within budget.
Over nine months, the combined ratio stands at 81.3%, comfortably inside the annual target. The P&C insurance service result fell to €216 million from €255 million in Q3 2025, partly due to a negative experience variance of €35 million in the quarter. SCOR also cited “additional buffer building” as a factor in the Q3 attritional ratio, indicating deliberate reserve conservatism.
Strong Financial Position for New Strategy
SCOR is preparing to unveil its new strategic plan on December 3. Thierry Léger, chief executive officer, noted the company’s strong financial footing. “With a solvency ratio of 221%, SCOR is entering the final stretch of Forward 2026 with a strengthened balance sheet as it prepares to unveil its new strategic plan on December 3,” he said.
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Forward 2026, launched in September 2023, targeted 9% annual economic value growth at constant economics and a P&C combined ratio below 87%. SCOR has exceeded both metrics, with nine-month economic value growth at 11.9% and a combined ratio of 81.3%. The company’s solvency has increased from 215% at year-end 2025, and financial leverage has decreased to 22.8% from 25.3%, giving it more room for negotiations than many peers.
Retrocession Timing Impact on New Business CSM
SCOR retrocession mechanism follows prior SCOR quarters. It cedes a portion of written risk to the retro market. The cost affects new business CSM at purchase, not over contract life. Quarterly CSM can move independently if significant retrocession is bought or renewed unevenly within a reporting period.
SCOR uses retrocession to manage nat cat exposure and soften inwards margins. Its P&C leadership flagged this as central to net technical profitability despite increased competition during Forward 2026. The strategy helps maintain margins even as pricing pressures emerge.
The company also cited “additional buffer building” as a contributor to the Q3 attritional ratio. This is deliberate reserve conservatism beyond current loss experience. It appears as balance sheet preparation ahead of the December 3 investor day, not a sign of emerging adverse development.
