The French reinsurer SCOR tentatively estimates the volume of compensation as a result of Russia’s military attack on Ukraine at “a high double-digit figure in millions of euros”, while warning that the company could end the first quarter of 2022 with a loss.
As reported on the website of the reinsurer, SCOR became the first of the global reinsurers to publish information about how much the war in Ukraine could cost their business.
It is also noted that the total losses of the industry as a result of this war will be equivalent to a catastrophic event of a medium scale (from EUR15 billion to EUR30 billion). But given that hostilities affect insurance payouts, and given the considerable uncertainty as hostilities continue, it is now very difficult to give an accurate estimate, SCOR said.
By announcing early first quarter results, SCOR definitely wants to give shareholders and the market a picture of what to expect. SCOR’s strategy is to reserve funds “as large as possible as early as possible”.
The company is closely following the course of events in Ukraine, which makes it possible to adequately assess the potential impact of the aggressor’s military actions and international sanctions against Russia on global reinsurance.
SCOR emphasizes that its subsidiary in Russia has suspended the signing of new reinsurance contracts.
The company emphasizes that payments are expected under political risk, credit risk and aviation insurance reinsurance contracts.
The reinsurer noted that these payments will be attached to other payments in the first quarter of 2022, in particular for damage due to natural disasters (including floods in Australia, European snowstorms, drought in Brazil) and the continuation of the Covid-19 pandemic in the United States.
“Such situations will negatively affect the combined ratio for P&C insurance (property insurance), as well as the technical result of life and medical insurance. This is expected to lead to losses for the quarter,” the company notes.
SCOR also stated that the company is well capitalized and has a strong solvency ratio.
