Scor rules out any M&A until 2026 plan concludes

By Aidan Gregory

March 6 - (The Insurer) - Scor CEO Thierry Léger has dismissed the possibility of the French reinsurer becoming a takeover target following prolonged weakness in its share price compared with its key continental European rivals.

At a press conference on Wednesday following Scor’s annual results announcement, Léger said the company would be a “consolidator” rather than an M&A target after addressing the issues within its life and health business that led to a profit warning in July last year.

However, he said Scor does not expect to consider any M&A until the conclusion of its 2026 plan.

“The share price is now above book value. In the years to come, we have been able to show through our Forward 26 strategy that we can create substantial value for our shareholders," he said.

"We have a super strong franchise which everybody would hate to see disappear from the market," added Léger.

"But if you ask me, on which side do I see Scor? I see us very clearly on the consolidator side.”

Scor also has no plans for any special dividends or buybacks until its current 2026 plan is concluded. On Wednesday the company matched its 2023 dividend and declared a combined ratio of 86.3% for 2024.

“If you look at capital generation in the reinsurance world, you can see that generally the industry is giving back quite some capital through regular dividends and buybacks,” said Léger. “There is a lot of capacity in the market which is why on the pricing front there is a much better balance between offer and demand.”

A market softening is widely expected in the coming years, which may lead to a recalibration of M&A appetite among the industry’s major players as organic growth becomes harder to find.

“I could see a slight shift in terms of M&A in reinsurance,” said Léger. “Whether this is really going to happen, I'm not so sure. There are some trends against it. One big trend is that brokers, clients are not so keen to see consolidation in the reinsurance space. They like the competition through having more of these reinsurers out there.

“When you acquire another reinsurer, it's not easy to keep the market share that you acquire,” added Léger. “It will be contested by clients and brokers.”

Despite the positive headwinds for the industry in general, Scor’s equity returns have lagged its key peers, Swiss Re, Munich Re and Hannover Re, due to the fallout from its profit warning last year, which was caused by large losses within its life and health portfolio.

The reinsurer subsequently launched a review of its life and health business, and its shares have now recovered to trade above 26 euros – the level they were at prior to the collapse its share price last year.

Shares in Scor were trading at 26.54 euros as of 1.21 p.m. in Paris on Thursday, up 0.9% from the previous close. The stock has climbed more than 44% in the past six months, giving Scor a market capitalisation of 4.77 billion euros on the Paris bourse.