Scor Shs Prov Regpt

Good morning, ladies and gentlemen, and welcome to the SCORE Quarter 1 2024 Result Conference Call. Today's call is being recorded. There will be an opportunity to ask questions after the presentation. In order to give all participants a chance to ask questions, we kindly ask you to limit the number of your questions to two. At this time, I would like to hand the call over to Mr. Thomas Fawcett. Please go ahead, sir.

Good morning and welcome to this core Q1 2024 results conference call. My name is Thomas Fossard, Head of Investor Relations. I'm joined on the call today by François de Varennes, Deputy CEO and Group CFO, Jean-Paul Konechente, PNC CEO, as well as other COMEX members. Can I please ask you to consider the disclaimer on page two for the presentation? And now I would like to hand over to François de Varenne. François, over to you.

Thank you. Thank you very much, Thomas. And good morning, everyone. I'm very pleased to present this Q1 result today. As usual, I will focus on figures, excluding the mark-to-market impact of the option on scores on shares. I have four key messages for you today. First one, strong performance from two out of three engines. We continue to deliver strong earnings this quarter with an adjusted net income of $176 million, translating into a return on equity of 15.5%. This performance is achieved thanks to our PNC and investment activities, while our life and health business faces adverse experience variance this quarter. Second key message, acceleration of the result build-up in PNC. With this strong set of results, we have been able to accelerate the reserve buffer buildup in PNC, both on short and longer tail lines, in line with our commitment taken in Q2 last year. This is a choice of the management to accelerate the reserve bid up in the combined ratio this quarter. Third message, strong net capital generation from our PNC business. We improve our capital position to a level of 215% at the end of Q1, up by six points compared to the end of last year, while our economic value is up 4.1% at Constant Economics. The solvency ratio improvement reflects our strong level of capital generation after capital deployment and dividend accrual. This capital generation is mostly coming from our P&C activities, On the economic value growth, we believe that we are on the right track to deliver our 9% full-year target. Fourth message, key message this morning, very satisfactory April renewal, confirming the 1.5 point improvement in the non-writing ratio. We are very satisfied with the 17% growth in PNC premium during the April renewals achieved with still attractive margin. Jean-Paul will provide more color on this later in the presentation. Let's focus first on P&C. P&C delivers very strong results over the quarter. The new business CSM stands at a high level of 651 million, supporting by strong January renewals with attractive margins. Please note that last year, the new business ESM was negatively impacted by the cost of a multi-year contract, a retrocession contract, which was front-loaded in Q1 2023. Looking at the P&C insurance revenue, it is up 3.8% at constant FX. We continue to see here the effect of the portfolio right sizing that we performed in 2023. However, its weight will gradually decrease quarter after quarter. Hence, The P&C insurance revenue growth rate is expected to normalize over time when the share of the 2024 premiums in the business mix will increase. Let's now look at the combined ratio. It stands at 87.1, in line with our expectation, and is supported by a low NADCAT ratio of 7.2%, well below our 10% budget. This NatCat ratio includes the impact of an upward revision of the Italian airstorm market loss. I tell you, we are very satisfied with our attritional ratio of 78.8%, which incorporates a significant level of reserve buffer in addition. Part of that buffer is included in a conservative loss estimate on the Baltimore Bridge event. For this complex loss, we have taken a prudent view in our estimate in line with the conservative approach adopted for the French Riot and Yuri Kenyan. Corrected from these management choices, so buffer on short tail line and on long tail line, we therefore confirm the positive trend in our attritional loss performance. Let's now comment on the discount impact. Over Q1, we observe a discount impact of 6.3%, which includes the one-off effect of a large commutation on a PNC contract for 3.3 points. Without this large commutation, the discount impact would have been at minus 9.6 points. For 2024, we have revised our discount effect expectation between minus 7.5 and minus 8.5, following an update of the yield curve, while maintaining our combined ratio assumption of below 87. This will allow for more flexibility in our reserve bidder strategy in 2024. Let's now focus on life and health. The life and health business generates a satisfactory new business ESM of 112 million in Q1 without any large transaction. This compares to a very strong Q1 new business ESM last year, which was supported by an exceptionally large deal. You know that large deals can be lumpy by nature. And for the rest of 2024, we remain confident on the new business CSM as we have a decent pipeline of large deals. Life and Health generates an insurance service result of $72 million in Q1, lower than we had expected. The CSM amortization reaches $93 million and the risk adjustment $27 million, broadly in line with our expectations. However, we record mortality claims in the U.S., which are visible in the experience variants this quarter. There can be volatility in experience across quarters and claim reporting effects. We are carefully monitoring our U.S. mortality portfolio and its underlying assumptions constantly. We are working on improving the profitability of the enforced business. In respect of Onero's contract, we have this quarter the opposite effect compared to Q4. We have a positive impact of 20 million. Similar to the last few quarters, it is driven by changes in risk adjustments rather than by movement in expected claims on the business, but with a positive outcome this quarter. After PNC and Life and Health, let's now move on to investment. We continue to benefit from an excellent performance on the investment side, with a regular income yield reaching 3.5% this quarter and a reinvestment rate at 4.7%, in line with our guidance communicated during the full year 23 results. The relatively short duration of our book enables us to benefit faster from still elevated interest rate environments. Let's move to the economic value. Over Q1, the economic value is up 4.1% at Constant Economics, reaching 9.6 billion. We are on track to achieve an expected growth of 9% for the full year. There is a bit of seasonality in this economic value growth as we historically generate a large part of the PNC new business in Q1. Our economic value increases to 54 euros per share at the end of Q1. Our economic financial leverage ratio has reduced this quarter compared to Q4 thanks to the economic value growth, and it is now closer to 20%. With that, I'll hand over to Jean-Paul, who will provide more insight into our strong April annuals.