Scor expects no special dividends or buybacks before 2026

By Aidan Gregory

March 5 - (The Insurer) - Scor is unlikely to pay special dividends or launch share buybacks prior to the conclusion of its 2026 plan despite the progress made in turning around its life and health business, according to management.

At a press conference following Scor’s 2024 annual results on Wednesday, chief financial officer François de Varenne said that the company remains committed to the capital distribution targets outlined in its three-year strategic plan, with a strong preference for deploying rather than repatriating capital to shareholders.

“In the future, we may add to this dividend policy a special dividend or share buybacks to share the good fortune of Scor,” said de Varenne, in response to a question from The Insurer. “We have been quite clear since September 2023 when we presented our strategic plan that this plan for 2026 is a plan where we intend to deploy all capital, especially on the P&C side, given the very strong margins we see on the P&C side.

“You should not expect until the end of the plan a special dividend or share buyback unless of course we have a very excellent year,” added de Varenne. “That is a plan where we prefer to deploy the capital to get those attractive margins on the balance sheet.”

Scor has declared a dividend of 1.80 euros for its 2024 financial year, in line with 2023. The company’s solvency ratio was 210% at the end of last year, in the upper end of its target range of 185% to 220%, after absorbing the impact of the review of its life and health business, which caused a profit warning and share price collapse in July last year.

Under Scor’s 2023 capital management targets, it will match the previous year’s dividend if its solvency ratio remains above 185%, according to de Varenne.

“We have maintained the same dividend as last year,” said de Varenne. “The solvency position is very strong at the end of the year, but we have a negative evolution of the economic value in 2024 due to the structural review.”

Scor’s CEO Thierry Léger said on Wednesday that it has made progress in addressing the issues that led to the company's profit warning last year and its underperformance versus its main continental European rivals.

The French reinsurer’s share price recently crossed the threshold of 26 euros, the level it was trading at just prior to the warning in July last year, and is now above book value, according to Léger.

“I am confident that we will be able to deliver stable and profitable earnings,” said Léger. “To turn around the portfolio, I am long enough in this business (to know) that it is not done in one year – it takes three years.

“While we have done a lot in the last year, we will need another two years to be as confident in L&H as we are today in P&C,” added Léger.

Shares in Scor were trading at 26.20 euros as of 10:42am in Paris, giving the company a market capitalisation of 4.7 billion euros. The stock is down 4% from a year ago.