SCOR, the global reinsurance company, has launched a new three-year contingent capital facility.
In a statement, SCOR said that the new facility was in the form of a contingent equity line, providing the SCOR group with EUR 300 million coverage in case of extreme natural catastrophe or life events impacting mortality. SCOR explained that the facility would enable the group to protect its solvency in case of catastrophe events and that it was consistent with the "Quantum Leap" strategic plan.
This is the fourth contingent capital facility launched by SCOR; its first was launched on January 1, 2011.
SCOR added that, as part of the authorization granted by the general meeting of SCOR shareholders in April 2019, SCOR arranged a new contingent capital equity line with J.P. Morgan. This equity line facility will replace, as of January 1, 2020, the current contingent capital facility that ends on December 31, 2019.
This protection would be triggered in case of extreme life events impacting mortality, as well as natural catastrophe events.
Under the new facility, a drawdown may result in an aggregate increase in the share capital of SCOR up to EUR 300 million (including issuance premium), in respect of which SCOR has entered into a firm subscription commitment with J.P. Morgan. The issuance of the shares would be triggered when SCOR has experienced total annual aggregated losses or claims from natural catastrophes or extreme events impacting mortality claims above a certain threshold, which has not been made public, between January 1, 2020 and December 31, 2022.
Denis Kessler, chairperson and chief executive officer of SCOR, commented, "Our new strategic plan 'Quantum Leap' sets out ambitious profitability and solvency targets given the current financial and economic environment. This new contingent capital facility is an essential part of the active capital management policy that is at the heart of our strategy. This facility protects SCOR's solvency, at a very low cost for our shareholders, against events such as a global pandemic or a natural catastrophe of historic proportions."
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].