Intrinsic Value SCOR Se (SCR.SW)

• Previous Close: CHF25.90
• Intrinsic Value: CHF12.11
• Upside potential: -53%

Stock Valuation Context

Business Model And Market Position

SCOR SE is a leading global reinsurer operating in both life and non-life segments, serving diverse markets across Europe, the Middle East, Africa, the Americas, and Asia Pacific. The company’s SCOR Global P&C segment specializes in property, casualty, and specialty reinsurance, including niche areas like cyber risk and environmental liability, while its SCOR Global Life segment focuses on mortality, morbidity, and longevity solutions, alongside financial and distribution services. SCOR’s diversified portfolio and strong underwriting expertise position it as a key player in the reinsurance industry, balancing traditional risk transfer with innovative financial solutions. The firm’s global footprint and deep sector knowledge allow it to navigate complex risks, such as catastrophes and longevity trends, while maintaining competitive pricing and client-centric offerings. Its asset management activities further complement its core operations, enhancing capital efficiency and supporting long-term stability.

Revenue Profitability And Efficiency

SCOR reported revenue of CHF 1.57 billion for the period, with a net income of CHF 4 million, reflecting modest profitability amid challenging market conditions. The diluted EPS of CHF 0.0223 indicates subdued earnings power, though operating cash flow of CHF 903 million demonstrates robust liquidity generation. Capital expenditures were minimal at CHF -28 million, suggesting disciplined investment in maintaining operational efficiency.

Earnings Power And Capital Efficiency

The company’s earnings are tempered by macroeconomic and underwriting pressures, as seen in its thin net income margin. However, its strong operating cash flow highlights effective premium collection and claims management. SCOR’s capital efficiency is supported by its asset management division, which optimizes returns on invested reserves and aligns with its risk-adjusted capital framework.

Balance Sheet And Financial Health

SCOR maintains a solid balance sheet with CHF 2.11 billion in cash and equivalents, providing liquidity to absorb volatility. Total debt of CHF 3.55 billion is manageable given its reinsurance business model, which relies on leverage for underwriting capacity. The firm’s financial health is further underpinned by its regulatory capital adequacy and diversified risk portfolio.

Growth Trends And Dividend Policy

Growth is likely driven by demand for specialty reinsurance and longevity solutions, though near-term profitability remains constrained. The dividend payout of CHF 1.6828 per share reflects a commitment to shareholder returns, albeit with cautious alignment to earnings performance. SCOR’s long-term growth hinges on expanding its high-margin specialty lines and optimizing life reinsurance offerings.

Valuation And Market Expectations

With a market cap of CHF 4.25 billion and a beta of 0.855, SCOR is viewed as a relatively stable player in the reinsurance sector. Investors likely expect gradual recovery in underwriting margins and earnings, balanced against persistent macroeconomic and catastrophic risks. The valuation reflects cautious optimism about its niche expertise and global diversification.

Strategic Advantages And Outlook

SCOR’s strategic strengths lie in its global reach, underwriting discipline, and innovative product suite, particularly in longevity and specialty risks. The outlook remains mixed, with opportunities in emerging markets and cyber reinsurance offset by competitive pressures and climate-related volatility. Execution on pricing discipline and capital allocation will be critical to sustaining long-term value.

Sources

Company filings, market data