Scor at a crossroads

Left in a sorry state by its previous chief executive, Denis Kessler, Scor has had little opportunity to cash in on the providential backdrop in the reinsurance sector in recent years.

The good news is that, under the steady and talented Thierry Léger, a former Swiss Re executive, the group based on Avenue Kléber does appear to have well and truly turned the page on the disastrous Kessler era.

Having died in 2023, the man in question - who over two decades in office brazenly trampled every principle of ethics and good governance, drawing the ire of an activist campaign along the way - will unfortunately not be able to answer in court for his outlandish, opaque collusions with Jean-Claude Seys at the height of the Scor-Covéa drama.

All of that now belongs to the past. Despite lower volumes and a life segment that is treading water, Scor has delivered its best year in twenty years, with earnings per share of 4.7 euros and a return on equity of 19%. The reinsurer can therefore raise its sacrosanct dividend to 1.9 euro per share, from 1.8 euro last year.

Scor is forecasting - with commendable transparency - a markedly lower return for 2026, inevitable after a genuine period of euphoria in the reinsurance sector. In these same columns, we argued as early as the summer of 2024 that such a trend was hardly sustainable.

Shareholders will also welcome Thierry Léger's pragmatic management: he has surrounded himself with respected figures, and is managing to steer a reduction in the group's cost base in an environment that is nonetheless highly inflationary.

That said, speaking of inflation, it is now on the question of growth that the French reinsurer will be expected to deliver, because over ten years, in constant euros, its dividend has barely moved, while its equity has fallen by a quarter.

Pragmatic as well, the market has re-rated Scor to a multiple above the value of its equity - whereas the group remained structurally discounted during the Kessler era - and at a level consistent with a cleaned-up dividend yield. It is, however, still a long way from granting it the same favour as Hannover Re or Munich Re, amongst others.

Getting the house back in order was a major challenge, and it has now been met. Reconnecting with growth will be another, no less colossal, and it is now time to shift into gear. Unless, of course, Scor gives in to the siren call of a potential buyer - which would likely not happen without stirring up a few ripples...