Down nearly 19% (Il Sole 24 Ore Radiocor) - Paris, 16 Jul - Shares in Scor were sharply lower after the French reinsurance group issued a profit warning for its L&H unit.

At 0733 GMT, Scor was down 18.57% at 21.22 euros.

In the second quarter, the result for the L&H insurance service result (ISR) is expected at about a negative 0.4 billion euros, "driven notably by updates on reserves, and continued negative experience variance, partly offset by the positive effect of portfolio actions," Scor said.

"Final assumption updates in H2 2024 could potentially lead to additional negative adjustments to the L&H ISR of up to EUR -0.1 billion by year-end 2024. As a result, the L&H ISR in 2024 is expected to be significantly less than the EUR 500 million indicated during the Q1 2024 results presentation," the company added.

The Q2 2024 pre-tax L&H contractual service margin (CSM) at current yield curves is adjusted by about negative 0.9 billion euros, driven mainly by reserving assumption changes in anticipation of the year-end review. Final updates in the second half of 2024 could potentially lead to additional negative adjustments to the pretax CSM at current yield curves of up to a negative 0.4 billion by year-end 2024.

The Q2 2024 group economic value (EV) is expected at 8.3-8.5 billion euros or at 46-47 euros per share. As a result, the group EV growth target of 9% per annum at constant economics is unlikely to be met in FY 2024.

"All these adjustments have no impact on the group liquidity position at year-end 2024," it added.

The group Solvency II ratio is expected to be above 200% at in the second quarter, it added. Scor "remains confident that it will maintain the solvency ratio in the optimal range of 185%-220% at year-end 2024," adding that its capital management framework, including the dividend policy, is unchanged.

"These adjustments aim to strengthen the robustness of cash flow projections and reduce the risk of future earnings volatility," it added.

AAA-Web

(RADIOCOR) 16-07-24 09:40:21 (0199) 5 NNNN