SCOR SE: A Strategic Reinsurance Play in a Cyclical Recovery

The insurance and reinsurance industry is entering a pivotal phase of its cyclical journey. After years of soft markets and underwriting pressure, we are witnessing a hardening of conditions, driven by inflation, climate-related risks, and a shift toward disciplined capital allocation. In this environment, companies that combine strong capital discipline, proactive risk management, and underwriting expertise are poised to outperform. SCOR SE (SCOR), a global reinsurer with a long history of resilience, fits this mold perfectly. With a 22.6% ROE in H1 2025, a robust solvency ratio of 210%, and a Forward 2026 strategic plan focused on disciplined growth, SCOR is emerging as a compelling value play in a maturing insurance cycle.

Capital Discipline: A Foundation for Long-Term Resilience

SCOR's capital discipline is one of its most defining strengths. As of June 2025, its solvency ratio remains at 210%, firmly within its optimal range of 185–220%. This level of capital strength is critical in a hardening market, where the ability to absorb large losses and maintain investor confidence becomes paramount. The 210% ratio reflects not just the company's strong balance sheet but also its proactive capital management framework, which prioritizes maintaining solvency while distributing value to shareholders.

The company's ROE, a key metric for evaluating capital efficiency, has surged to 22.6% in H1 2025, far exceeding its target of >12% for 2025–2026. This performance is underpinned by disciplined underwriting, cost efficiencies, and a strategic shift toward higher-margin lines. Notably, SCOR's ability to generate such a high ROE in a volatile industry highlights its operational excellence and its capacity to convert capital into outsized returns.

Risk Management: Navigating a Complex Landscape

Reinsurance is a business of managing risk, and SCOR has consistently demonstrated its ability to navigate macroeconomic and geopolitical uncertainties. Its Forward 2026 strategic plan emphasizes a dual focus: growing economic value at 9% annually (at constant economics) while maintaining a solvency ratio in the optimal range. This balance between growth and risk mitigation is a hallmark of SCOR's approach.

In the Property & Casualty (P&C) segment, SCOR has leveraged the current hard market to expand into selected lines of business with attractive risk-return profiles. Its combined ratio of 82.5% in Q2 2025 (below its target of <87%) underscores its underwriting discipline. The company is also accelerating its development in Alternative Solutions, aiming to triple its premiums in this area by 2026 compared to 2023 levels. This strategic pivot reflects an understanding of the evolving reinsurance landscape, where alternative risk-transfer solutions are gaining traction.

Meanwhile, SCOR's Life & Health (L&H) segment is undergoing a transformation to enhance profitability. A three-step plan—shifting toward higher-margin products, strengthening in-force management, and cutting costs—has already yielded EUR 30 million in savings. These initiatives, combined with a new business CSM of EUR 0.4 billion annually, position the L&H segment to contribute meaningfully to SCOR's ROE growth.

Underwriting Strength: A Competitive Edge in a Hardening Market

SCOR's underwriting strength is another pillar of its strategic advantage. In a maturing insurance cycle, where pricing power is on the rise, SCOR's focus on selected, profitable lines—such as treaty business and alternative solutions—ensures it is capturing value where others may overextend. The company's cautious approach to climate-exposed and US casualty lines further mitigates long-term volatility.

The P&C segment's attritional loss performance and low natural catastrophe ratio in Q2 2025 highlight SCOR's ability to execute its underwriting strategy. Additionally, the company's investment strategy, with a regular income yield of 3.5% in Q2 2025, reinforces its capacity to generate stable returns even in a low-yield environment.

Forward 2026: A Blueprint for Outperformance

SCOR's Forward 2026 plan is more than a set of targets—it's a roadmap for outperforming in a tightening market. The plan's emphasis on economic value growth, profitability, and sustainability aligns with the industry's shift toward quality over quantity. By accelerating cost savings (EUR 150 million by 2025) and reinvesting in high-margin lines, SCOR is creating a flywheel effect: stronger underwriting margins, improved capital efficiency, and enhanced shareholder returns.

Moreover, SCOR's commitment to sustainability—such as offsetting 100% of its GHG emissions and reducing carbon intensity—adds a layer of resilience in an era where ESG factors are increasingly material to investors. This holistic approach to risk management and value creation is rare in the reinsurance sector.

Investment Case: A Top-Tier Value Play

For investors, SCOR represents a rare combination of defensive qualities and growth potential. Its 22.6% ROE and 210% solvency ratio are among the strongest in the sector, while its strategic initiatives—portfolio reshaping, cost discipline, and a focus on high-margin lines—position it to capitalize on the current hard market. The company's capital management framework, which prioritizes resilient dividends and shareholder returns, further enhances its appeal.

In a cyclical recovery, SCOR's ability to generate consistent returns while maintaining a strong balance sheet is a compelling argument for inclusion in a diversified portfolio. With its Forward 2026 plan already delivering ahead of schedule and its risk management framework intact, SCOR is well-positioned to outperform as the reinsurance industry navigates a new era of disciplined growth.

Final Thoughts
SCOR SE is not a speculative play—it's a well-capitalized, strategically agile reinsurer with a proven track record of navigating cycles. For investors seeking exposure to a sector poised for recovery, SCOR offers a rare blend of defensive strength and offensive potential. As the insurance cycle matures, SCOR's focus on capital discipline, risk management, and underwriting excellence will likely drive outsized returns for those who recognize its value early.