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Yahoo
09-05-2025
- Business
- Yahoo
SCOR registers profit of €200m in Q1 2025
SCOR logged net income of €200m for the first quarter of 2025 (Q1 2025), a 1.7% increase from €196m reported in the same period the previous year. The company attributed the growth to contributions from all business segments. Its earnings per share saw a marginal rise to €1.12 for the quarter, up from €1.10 in Q1 2024. The French reinsurer's operating results also improved, with a 10.6% increase to €317m in Q1 2025 from €287m a year earlier. Overall insurance revenue decreased by 1.2%, reaching €4bn in Q1 2025 from €4.1bn in the prior year's quarter. The property and casualty (P&C) insurance segment contributed €1.8bn to total revenues, up by 1.2% at current exchange rates, while the life and health (L&H) segment added €2.2bn, a 3.1% decline. The company's gross written premiums (GWP) for the quarter dipped to €4.9bn. Within this figure, P&C GWP accounted for €2.5bn, and L&H GWP made up €2.4bn. The P&C segment's combined ratio was reported at 85% for Q1 2025, largely attributed to a low rate of attritional losses. Natural catastrophe claims, influenced by the LA wildfires, represented a ratio of 12.5%. SCOR CEO Thierry Léger said: 'I am satisfied with the first quarter results. All business activities contribute to a strong consolidated Group net income. The P&C performance continues to be excellent with a combined ratio of 85%, after absorbing elevated Nat Cat events during the quarter and allowing for an additional level of prudence building. 'L&H improves its insurance service results with a neutral experience variance. In Investments, SCOR benefits from an elevated return on invested assets. Overall, we are starting the year with a high ROE [return on investment] of 18.7% and an improved solvency ratio of 212%, supported by positive net operating capital generation.' Last month, French authorities commenced an investigation into the actions of SCOR's former chairman regarding Covéa group's acquisition of PartnerRe. Denis Kessler, who had been at the helm of SCOR for more than 20 years, died in 2023. SCOR has denied any direct or indirect involvement and responsibility in the matter. "SCOR registers profit of €200m in Q1 2025 " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Business Upturn
07-05-2025
- Business
- Business Upturn
First quarter 2025 results: EUR 200 million net income in Q1 2025
By GlobeNewswire Published on May 7, 2025, 10:21 IST Press release 07 May 2025 – N° 10 First quarter 2025 results EUR 200 million net income in Q1 2025 Group net income of EUR 200 million in Q1 2025 driven by all business activities (EUR 195 million adjusted 1 ) P&C combined ratio of 85.0%, despite LA wildfires and buffer building L&H insurance service result 2 of EUR 118 million Investments regular income yield of 3.5% of EUR 200 million in Q1 2025 driven by all business activities (EUR 195 million adjusted ) IFRS 17 Group Economic Value 3 of EUR 9.0 billion as of 31 March 2025, up +6.8% at constant economics 3, 4 . The Economic Value per share stands at EUR 51 (vs. EUR 48 as of 31 December 2024) of EUR 9.0 billion as of 31 March 2025, up +6.8% at constant economics . The (vs. EUR 48 as of 31 December 2024) Estimated Group solvency ratio of 212% 5 as of 31 March 2025, up 2 points from FY 2024 of 212% as of 31 March 2025, up 2 points from FY 2024 Annualized Return on Equity of 18.7% (18.3% adjusted1) in Q1 2025 SCOR SE's Board of Directors met on 6 May 2025, under the chair of Fabrice Brégier, to approve the Group's Q1 2025 financial statements. Thierry Léger, Chief Executive Officer of SCOR, comments: 'I am satisfied with the first quarter results. All business activities contribute to a strong consolidated Group net income. The P&C performance continues to be excellent with a combined ratio of 85%, after absorbing elevated Nat Cat events during the quarter and allowing for an additional level of prudence building. L&H improves its insurance service results with a neutral experience variance. In Investments, SCOR benefits from an elevated return on invested assets. Overall, we are starting the year with a high ROE of 18.7% and an improved solvency ratio of 212%, supported by positive net operating capital generation.' Group performance and context SCOR records EUR 200 million net income (EUR 195 million adjusted1) in Q1 2025, supported by all business activities: In P&C, the combined ratio of 85.0% in Q1 2025 is primarily driven by a low attritional loss and commission ratio of 74.7% reflecting an excellent underlying performance and allowing for buffer building. The natural catastrophe claims ratio stands at 12.5% mainly driven by losses related to the LA wildfires. In L&H, the insurance service result 2 stands at EUR 118 million in Q1 2025, driven by a level of CSM amortization and risk adjustment release in line with expectations, and a neutral experience variance. stands at EUR 118 million in Q1 2025, driven by a level of CSM amortization and risk adjustment release in line with expectations, and a neutral experience variance. In Investments, SCOR benefits from an elevated regular income yield of 3.5% in Q1 2025 along with continued attractive reinvestment rates. The effective tax rate stands at 29.7% for Q1 2025. The annualized Return on Equity stands at 18.7% (18.3% adjusted1) in Q1 2025 and the Group Economic Value increases by 6.8% at constant economics3,4. SCOR's Solvency ratio is estimated at 212% at the end of Q1 2025, up 2 points versus FY 2024, from positive net operating capital generation. April P&C reinsurance treaty renewals During the April 2025 renewals, SCOR continues to grow strategically in its preferred lines, maintaining its underwriting discipline in a softening market context. EGPI increases by +1.5% on the business up for renewal in April, with significant growth of the Alternative Solutions book (EGPI +33.0%) while Specialty Lines increase by +3.8%, driven by Marine. Exposure to US Casualty is further reduced. As a reminder, premiums renewed in April represent c. 12% of total P&C reinsurance premiums. In a more competitive environment for the April renewals, net technical profitability on the renewed business is expected to deteriorate by 1 point. On a year-to-date basis, the net technical profitability is expected to deteriorate by less than 0.5 point. SCOR is successfully weathering a softening market thanks to its strategy of growing in a profitable and diversified way. For the upcoming renewals in 2025, SCOR expects pricing to be competitive on loss-free programs. Nevertheless, the overall profitability of SCOR's business mix should remain very attractive. On-going excellent P&C underlying performance In Q1 2025, P&C insurance revenue stands at EUR 1,858 million, down -0.7% at constant exchange rates (up +1.2% at current exchange rates) compared to Q1 2024. Strong growth in the Reinsurance segment from preferred lines is mostly offset by reduced business in US Casualty reinsurance and in SCOR Business Solutions. New business CSM in Q1 2025 stands at EUR 710 million, up +9.0% at current exchange rates, supported by growth stemming from business renewed in January. P&C (re)insurance key figures: In EUR million (at current exchange rates) Q1 2025 Q1 2024 Variation P&C insurance revenue 1,858 1,837 1.2% P&C insurance service result 205 181 13.3% Combined ratio 85.0% 87.1% -2.1pts P&C new business CSM 710 651 9.0% The P&C combined ratio stands at 85.0% in Q1 2025, compared to 87.1% in Q1 2024. It includes: A Nat Cat ratio of 12.5%, mainly impacted by the losses related to the LA wildfires (10.8 pts). An attritional loss and commission ratio of 74.7%, reflecting a very satisfactory underlying performance and continued buffer building. A discount effect of -9.3%, reflecting the higher locked-in rates relating to a large share of US claims including the LA wildfire losses. An attributable expense ratio of 7.8%. The P&C insurance service result of EUR 205 million is driven by a CSM amortization of EUR 255 million, a risk adjustment release of EUR 40 million, a negative experience variance of EUR -95 million, and an onerous contract impact of EUR 6 million. The negative experience variance reflects mainly higher-than-expected Nat Cat experience, lower-than-expected insurance revenue and buffer building. Delivering a L&H insurance service result of EUR 118 million In Q1 2025, L&H insurance revenue stands at EUR 2,205 million, down -5.8% at constant exchange rates (-3.1% at current exchange rates) compared to Q1 2024. L&H New Business CSM6 generation of EUR 76 million in Q1 reflects the updated L&H new business strategy and the implementation of higher return thresholds. The L&H insurance service result2 amounts to EUR 118 million in Q1 2025. It includes: A CSM amortization of EUR 86 million. A Risk Adjustment release of EUR 32 million. An experience variance of EUR 2 million, including a neutral experience variance in the US. A negative impact of onerous contracts of EUR -6 million. L&H reinsurance key figures: In EUR million (at current exchange rates) Q1 2025 Q1 2024 Variation L&H insurance revenue 2,205 2,276 -3.1% L&H insurance service result2 118 72 64.9% L&H new business CSM7 76 112 -32.5% Investments delivering a return on invested assets of 3.8% As of 31 March 2025, total invested assets amount to EUR 24.3 billion. SCOR's asset mix is optimized, with 79% of the portfolio invested in fixed income. SCOR has a high-quality fixed income portfolio with an average rating of A+, and a duration of 3.9 years. Investments key figures: In EUR million (at current exchange rates) Q1 2025 Q1 2024 Variation Total invested assets 24,330 22,962 6.0% Regular income yield(*) 3.5% 3.5% 0.0pt Return on invested assets(*),(**) 3.8% 3.4% 0.4pts (*) Annualized; (**) Fair value through income on invested assets excludes EUR 7 million in Q1 2025 related to the pre-tax mark to market impact of the fair value of the option on own shares granted to SCOR. Total investment income on invested assets stands at EUR 2267 million in Q1 2025. The return on invested assets stands at 3.8%7 (vs. 3.3% in Q4 2024) and the regular income yield at 3.5% (vs. 3.6% in Q4 2024). The reinvestment rate stands at 4.3%8 as of 31 March 2025, compared to 4.5% as of 31 December 2024. The invested assets portfolio remains highly liquid and financial cash flows of EUR 9.0 billion are expected over the next 24 months9, enabling SCOR to benefit from elevated reinvestment rates. * * * APPENDIX 1 – SCOR Group Q1 2025 key financial details In EUR million (at current exchange rates) Q1 2025 Q1 2024 Variation Insurance revenue 4,063 4,113 -1.2% Gross written premiums1 4,908 4,953 -0.9% Insurance Service Result2 324 253 +27.9% Management expenses -301 -294 -2.4% Annualized ROE3 18.7% 17.3% +1.4pts Annualized ROE excluding the mark to market impact of the option on own shares 18.3% 15.5% +2.8pts Net income3,4 200 196 +1.7% Net income4 excluding the mark to market impact of the option on own shares 195 176 +10.5% Economic value5,6 9,035 9,639 -6.3% Shareholders' equity 4,582 4,958 -7.6% Contractual Service Margin (CSM)6 4,453 4,681 -4.9% 1: GWP is not a metric defined under the IFRS 17 accounting framework (non-GAAP metric); 2: Including revenues on financial contracts reported under IFRS 9; 3: Taking into account the mark to market impact of the option on own shares. Q1 2025 impact of EUR 7 million before tax; 4: Consolidated net income, Group share; 5. Defined as the sum of the shareholders' equity and the Contractual Service Margin (CSM); 6: Net of tax. A notional tax rate of 25% is applied to the CSM. 2 – P&L key figures Q1 2025 In EUR million (at current exchange rates) Q1 2025 Q1 2024 Variation Insurance revenue 4,063 4,113 -1.2% 1,858 1,837 +1.2% 2,205 2,276 -3.1% Gross written premiums1 4,908 4,953 -0.9% P&C gross written premiums 2,509 2,427 +3.4% L&H gross written premiums 2,399 2,526 -5.0% Investment income on invested assets 226 193 +17.3% Operating results 317 287 +10.6% Net income2,3 200 196 +1.7% Net income2 excluding the mark to market impact of the option on own shares 195 176 +10.5% Earnings per share3 (EUR) 1.12 1.10 +1.8% Earnings per share (EUR) excluding the mark to market impact of the option on own shares 1.09 0.98 +10.7% Operating cash flow 150 151 -0.7% 1: GWP is not a metric defined under the IFRS 17 accounting framework (non-GAAP metric); 2: Consolidated net income, Group share; 3: Taking into account the mark to market impact of the option on own shares. Q1 2025 impact of EUR 7 million before tax. 3 – P&L key ratios Q1 2025 Q1 2025 Q1 2024 Variation Return on invested assets1,2 3.8% 3.4% +0.4pts P&C combined ratio3 85.0% 87.1% -2.1pts Annualized ROE4 18.7% 17.3% +1.4pts Annualized ROE excluding the mark to market impact of the option on own shares 18.3% 15.5% +2.8pts Economic Value growth5 6.8% 4.1% +2.7pts 1: Annualized; 2: In Q1 2025, fair value through income on invested assets excludes EUR 7 million pre-tax mark to market impact of the fair value of the option on own shares granted to SCOR; 3: The combined ratio is the sum of the total claims, the total variables commissions, and the P&C attributable management expenses, divided by the net insurance revenue for P&C business; 4: Taking into account the mark to market impact of the option on own shares. Q1 2025 impact of EUR 7 million before tax; 5: Not annualized. Growth at constant economic assumptions and excluding the mark to market impact of the option on own shares. The starting point is adjusted for the dividend of EUR 1.8 per share (EUR 322 million in total) for the fiscal year 2024, paid on 6 May 2025. Economic Value defined as the sum of the shareholders' equity and the Contractual Service Margin (CSM), net of tax. A notional tax rate of 25% is applied to the CSM. 4 – Balance sheet key figures as of 31 March 2025 In EUR million (at current exchange rates) As of 31 March 2025 As of 31 December 2024 Variation Total invested assets1 24,330 24,155 +0.7% Shareholders' equity 4,582 4,524 +1.3% Book value per share (EUR) 25.63 25.22 +1.6% Economic Value2 9,035 8,615 +4.9% Economic Value per share (EUR)3 50.53 48.03 +5.2% Financial leverage ratio4 23.6% 24.5% -0.9pts Total liquidity5 2,210 2,466 -10.4% 1: Excluding third-party net insurance business investments; 2: The Economic Value (defined as the sum of the shareholders' equity and the Contractual Service Margin (CSM), net of tax) includes minority interests; 3: The Economic Value per share excludes minority interests; 4: The leverage ratio is calculated as the percentage of subordinated debt compared to the sum of Economic Value and subordinated debt in IFRS 17; 5: Including cash and cash equivalents and short-term investments. * * * SCOR, a leading global reinsurer As a leading global reinsurer, SCOR offers its clients a diversified and innovative range of reinsurance and insurance solutions and services to control and manage risk. Applying 'The Art & Science of Risk', SCOR uses its industry-recognized expertise and cutting-edge financial solutions to serve its clients and contribute to the welfare and resilience of society. The Group generated premiums of EUR 20.1 billion in 2024 and serves clients in more than 150 countries from its 37 offices worldwide. For more information, visit: Media Relations Alexandre Garcia [email protected] Investor RelationsThomas Fossard [email protected] Follow us on LinkedIn All content published by the SCOR group since January 1, 2024, is certified with Wiztrust. You can check the authenticity of this content at General Numbers presented throughout this press release may not add up precisely to the totals in the tables and text. Percentages and percent changes are calculated on complete figures (including decimals); therefore, this press release might contain immaterial differences in sums and percentages due to rounding. Unless otherwise specified, the sources for the business ranking and market positions are internal. This press release does not constitute an offer to sell, or a solicitation of an offer to buy SCOR securities in any jurisdiction. Forward-looking statements This press release includes forward-looking statements, assumptions, and information about SCOR's financial condition, results, business, strategy, plans and objectives, including in relation to SCOR's current or future projects. These statements are sometimes identified by the use of the future tense or conditional mode, or terms such as 'estimate', 'believe', 'anticipate', 'expect', 'have the objective', 'intend to', 'plan', 'result in', 'should', and other similar expressions. It should be noted that the achievement of these objectives, forward-looking statements, assumptions and information is dependent on circumstances and facts that may or may not arise in the future. No guarantee can be given regarding the achievement of these forward-looking statements, assumptions and information. These forward-looking statements, assumptions and information are not guarantees of future performance. Forward-looking statements, assumptions and information (including on objectives) may be impacted by known or unknown risks, identified or unidentified uncertainties and other factors that may significantly alter the future results, performance and accomplishments planned or expected by SCOR. In particular, it should be noted that the full impact of economic, financial and geopolitical risks on SCOR's business and results cannot be accurately assessed. Therefore, any assessments, any assumptions and, more generally, any figures presented in this press release will necessarily be estimates based on evolving analyses, and encompass a wide range of theoretical hypotheses, which are highly evolutive. Information regarding risks and uncertainties that may affect SCOR's business is set forth in the 2024 Universal Registration Document filed on March 20, 2025, under number n°D.25-0124 with the French Autorité des marchés financiers (AMF) posted on SCOR's website and on the website of the AMF In addition, such forward-looking statements, assumptions and information are not 'profit forecasts' within the meaning of Article 1 of Commission Delegated Regulation (EU) 2019/980. SCOR has no intention and does not undertake to complete, update, revise or change these forward-looking statements, assumptions and information, whether as a result of new information, future events or otherwise. Financial information The Group's financial information contained in this press release is prepared on the basis of IFRS and interpretations issued and approved by the European Union. Unless otherwise specified, prior-year balance sheet, income statement items and ratios have not been reclassified. The calculation of financial ratios (such as return on invested assets, regular income yield, return on equity and combined ratio) is detailed in the Appendices of the presentation related to the financial results of Q1 2025. The financial results for the first quarter 2025 included in this press release have not been audited by SCOR's statutory auditors. Unless otherwise specified, all figures are presented in Euros. Any figures or financial results for a period subsequent to March 31, 2025 should not be taken as a forecast of the expected financials for these periods 1 Adjusted by excluding the mark to market impact of the option on own shares. 2 Includes revenues on financial contracts reported under IFRS 9. 3 Defined as the sum of the shareholders' equity and the Contractual Service Margin (CSM), net of tax. 25% notional tax rate applied on CSM. 4 Growth at constant economic assumptions as of 31 December 2024, excluding the mark to market impact of the option on own shares. 5 Solvency ratio estimated after taking into account the accrual for the first three months based on the dividend paid for the fiscal year 2024 (EUR 1.8 per share). 6 Includes the CSM on new treaties and change in CSM on existing treaties due to new business (i.e. new business on existing contracts). 7 Excluding the mark to market impact of the option on own shares. Q1 2025 impact of EUR 7 million before tax. 8 Reinvestment rate is based on Q1 2025 asset allocation of yielding asset classes (i.e. fixed income, loans and real estate), according to current reinvestment duration assumptions. Yield curves & spreads as of 31/03/2025. 9 As of 31 March 2025. Including current cash balances and future coupons and redemptions. Attachment Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. Business Upturn takes no editorial responsibility for the same. GlobeNewswire provides press release distribution services globally, with substantial operations in North America and Europe.
Yahoo
02-05-2025
- Business
- Yahoo
Eye of the Storm: Mitigating Financial Risks of Extreme Weather on Renewable Energy Systems
Extreme weather events have increased in frequency and intensity, but renewable energy projects can maintain financial stability through sound technical and financial risk mitigation strategies. Extreme weather events are on the rise. Climate changes over the last several decades have caused more heatwaves, floods, and droughts across the world, and resulted in increased risk to property, the environment, and human health. The development of renewable energy has been a cornerstone of efforts to reduce dependence on fossil fuels and limit global warming. But even for renewable project owners at the forefront of accelerating the energy transition, increasing extreme weather presents operational risk and the potential for major financial losses. This paradox within the energy transition presents an urgent challenge that must be overcome through measures such as technical hardening, accurate loss estimations, and innovative risk transfer instruments. While all renewable energy assets face increased risk from extreme weather events, solar photovoltaic (PV) projects (Figure 1) have proven to be the most susceptible. Industry experts attribute 80% of financial losses at solar farms to extreme weather, emphasizing the need for enhanced mitigation strategies in design, construction, and operational practices in hazardous regions. 1. Investors have poured money into solar photovoltaic (PV) projects in recent years. But in today's world, the risks to those investments from extreme weather events are a growing concern. Owners should consider risk mitigation solutions and risk transfer options to protect themselves. Source: Envato Elements Since 2018, severe weather conditions and associated damage in regions such as the northeastern U.S., California, and Texas have led to a surge in insurance claims. As a result, insurers of solar projects have imposed tighter terms and conditions—premiums have risen by as much as 400%, deductibles have increased to $1 million or 15% of the physical damage limit, and damage coverage is typically capped between $15 million and $40 million even for assets valued at several hundred million dollars. In addition, natural catastrophe (NatCat) coverage often excludes potential issues such as microcracking in PV modules, thereby shifting risk to project owners. To ensure the long-term financial viability of solar projects, the industry needs a multi-faceted response to hail and extreme weather risk. Improvements are needed in accurately assessing risk of occurrence, quantifying expected damage, implementing technical and operational protections, and adopting financial risk hedging mechanisms. Dramatic changes to the insurance landscape have left large-scale projects with substantial financial exposure. At particular risk are projects located in areas where hailstones exceed three inches in diameter, such as in the central U.S., often referred to as 'tornado alley.' Texas alone has experienced hail-related losses surpassing $600 million since 2018. Major incidents like the May 2019 hailstorm at the Midway project that damaged 58% of solar modules highlight the potentially severe consequences of these events. Experience has shown that even best-practice mitigation strategies, including automated tracker hail stow capabilities and successful one-inch hail resistance testing for modules, can fail to protect PV projects against the occurrence of larger hail. Hurricanes and high-speed wind gusts from severe storms also present a significant threat to PV systems, particularly those improperly designed for high wind loads. Category 3 and 4 hurricanes can loosen bolts, tear modules from their racks, and collapse racking systems. The destructive potential of hurricanes increases exponentially with wind speed. For example, the doubling of wind speeds from 75 miles per hour (mph) to 150 mph can increase damage potential by more than 256 times. The vulnerability of solar projects to high wind loads was highlighted during hurricanes Irma, Maria, and Harvey in 2017, and Ida in 2021, all of which inflicted significant damage on solar projects across the Caribbean, Puerto Rico, Texas, and Louisiana. Remediation costs varied, but in some cases exceeded 100% of initial project costs, underscoring the need for robust engineering and proactive risk management during the design and installation phases of project development. In the last five years, hurricane-prone areas like Texas, Florida, and the northeastern U.S. have seen an influx in solar investment. Enhanced protective measures, such as full-tilt wind stow strategies for trackers, reinforced piles, vibration-resistant module connections, adequate support structures under the modules, and site-specific windstorm studies in accordance with American Society of Civil Engineers (ASCE) 7 standards, have been integrated into the design and operation of many projects to mitigate the risk of wind damage. Initial signs suggest these technical hardening measures have improved project resiliency. For example, in 2022, when Hurricane Ian made landfall in Florida as a Category 4 storm with wind speeds as high as 150 mph, few newer-generation facilities reported significant losses and damage. While the effectiveness of advanced technical mitigation measures suggests a promising path forward, the financial risks from hurricanes remain significant, and insurers have applied strict sub-caps and high deductibles to storm-related coverages. By continuing to implement cutting-edge technologies and innovative risk transfer instruments, the solar industry can enhance project resilience, reduce wind-related risk, and better ensure financial viability. Accurate estimation of losses from severe weather events is crucial for solar asset owners to assess financial risk, secure appropriate insurance coverage, and ensure project resilience. However, estimating hail- and wind-related financial losses remains a complex challenge. Probable maximum loss (PML) studies, commonly used to evaluate financial risk, have often significantly underestimated actual losses—sometimes by a factor of almost 300 for recent hail events. These miscalculations can arise from underestimating expected maximum hail size, wind conditions, and the effective implementation of mitigation strategies. To address these shortcomings, the industry must enhance PML modeling accuracy and re-evaluate risk management approaches to ensure financial protection against extreme weather events. A recent positive step has been significant efforts within the solar industry since 2023 to share lessons learned from severe hail losses. The prevalence of success stories and null events—instances of hail events without major damage—have also increased but are harder to come by. DNV has worked on at least nine major hail loss cases between 2017 and 2024, seven of which occurred in Texas. DNV understands that seven out of these nine projects had some level of hail stow strategy in place, yet, still experienced significant hail losses, raising concerns about the reliability of these strategies during actual hail events. A persistent concern is whether project operators can consistently receive hail warnings and achieve tracker hail stow before the occurrence of hail. This timing issue could be one of the reasons projects with seemingly appropriate hail stow strategies can still suffer substantial losses. DNV and other technical advisory firms have recently made a concerted effort to improve hail loss quantification for solar projects through improved accuracy of hail occurrence and damage projections. A primary goal of this work is to help developers achieve better coverage costs and terms from insurance providers and thereby reduce the cost of carrying hail risk. More accurate risk quantification also equips developers with a better understanding of the expected costs of solar project ownership, gaps between insurance coverage and expected cost scenarios, and additional financial and risk mitigation strategies that may be required. Finally, a better understanding of hail risk associated with different system designs allows developers to understand the cost-benefit equation related to more resilient equipment. This understanding may result in a market signal to original equipment manufacturers (OEMs) to offer products with greater hail resilience, and for OEMs to assume greater responsibility for potential losses through more robust warranties. When a solar farm sustains hail or wind damage, the financial consequences extend beyond immediate repair costs. Insurance policy deductibles, production losses, increased premiums, and legal disputes all contribute to the economic burden. Additionally, the repair process is labor-intensive and costly, potentially requiring more effort than the initial installation. If damage is not promptly addressed, tax equity investors and credit purchasers may face financial risk due to potential IRS recapture of investment tax credits (ITCs) within five years of the project's service date. While some insurers may offer specialized products to mitigate these risks, inadequate coverage can lead to severe financial instability. To manage financial risks effectively, renewable energy projects should leverage risk transfer instruments designed to shift risk away from project owners to parties more suited to carry these risks. These instruments can include: Parametric Warranties and Insurance Policies. These instruments transfer specific risks to equipment manufacturers or contractors. For example, if a manufacturer certifies modules against two-inch hail, damage within this threshold may be covered under the warranty, thereby reducing insurance costs. Long-Term Service Contracts. These contracts transfer operational risks (such as guaranteed tracker stowing) to service providers. Such structures are common in the wind industry and can be adapted for solar projects. Catastrophe Swaps and Event-Linked Bonds. These instruments diversify risk by enabling project owners to exchange exposure with other parties or raise funds in case of disasters. Resilience Bonds and Insurance-Linked Loan Packages. These tools provide liquidity for recovery efforts following extreme weather events. Examples of catastrophe bonds include the California Earthquake Authority (CEA) and the Florida Hurricane Catastrophe Fund (FHCF). By incorporating these financial mechanisms, solar project owners can better safeguard their investments against natural catastrophes. Despite the increasing frequency of extreme weather events, renewable energy projects can maintain financial stability by implementing robust technical and financial risk mitigation strategies. Key steps are to improve the forecasted probability and impact of severe weather events, and to build resiliency within project equipment and designs. In addition, by implementing risk transfer instruments like parametric warranties, insurance policies, and long-term service contracts, as well as financial derivatives, catastrophe bonds, and contingent products, project owners may be able to efficiently and effectively manage these risks. A comprehensive approach—including reinforced PV modules, smart tracker stow strategies for wind and hail, and financial hedging instruments—will ensure the resilience, sustainability, and profitability of solar assets in high-risk locations. By adopting these strategies, the renewable energy industry can continue to thrive despite the challenges posed by extreme weather. —Hamid Gerami, PE is a risk management consultant for Energy Systems with DNV.
Yahoo
26-03-2025
- Business
- Yahoo
HDI Global insurance revenue up 10% in 2024
HDI Global, the Corporate & Specialty Division of Talanx Group, has reported insurance revenue of €10bn for 2024, an increase of 10% compared with the previous year. HDI Global's contribution to the Talanx Group's net income also increased, reaching €501m for the year, compared with €351m in 2023. Meanwhile, Talanx itself reported group net income of €1.9bn in 2024, a 25% surge from the previous year. The insurer's operating profit for the year totalled €702m, compared with €446m a year earlier. It also saw an uplift in return on equity to 17.6%, a rise of 3.3 percentage points. The company's financial success in 2024 has been attributed to the expansion of new business and inflation-related price adjustments on existing contracts. Additionally, the insurer reported a combined ratio of 90% for the year in 2024 as against 91.5% in 2023. The company's insurance service result reached €1bn in 2024 from €770m in 2023, supported by a better loss ratio for frequency losses. Large loss payments rose to €402m from €334m in 2023, but the figures stayed below the projected €468m, primarily due to a reduction in man-made losses. Nevertheless, the budget for natural catastrophe (NatCat) losses was exceeded, the company said. The net insurance financial and investment result before currency effects improved to €83m, driven by 'higher investment volumes' and an uptick in current interest income. HDI Global SE CEO Edgar Puls said: 'Our positive results enable us to act as our clients' and brokers' preferred and reliable Partner in Transformation. For this, we aim to be financially strong for decades to come.' 'These strong figures for 2024 are our basis to continue acting as a leading one-stop shop for all our clients. Strategically, HDI Global's risk diversification is strong, enabling us to be a stable, predictable and reliable partner. I am proud to say that we achieved these full-year results through profitability in all regions of the world.' Commenting on the middle-market expansion, HDI Global Asia-Pacific head and Australia managing director Stefan Feldmann stated: 'For 2025, we see substantial growth opportunities in the Mid-Market space, which we perceive to be under-represented for HDI, but our broker partners show a great interest in working with us as we offer a refreshingly different approach to this segment.' "HDI Global insurance revenue up 10% in 2024 " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
26-03-2025
- Business
- Yahoo
HDI Global insurance revenue up 10% in 2024
HDI Global, the Corporate & Specialty Division of Talanx Group, has reported insurance revenue of €10bn for 2024, an increase of 10% compared with the previous year. HDI Global's contribution to the Talanx Group's net income also increased, reaching €501m for the year, compared with €351m in 2023. Meanwhile, Talanx itself reported group net income of €1.9bn in 2024, a 25% surge from the previous year. The insurer's operating profit for the year totalled €702m, compared with €446m a year earlier. It also saw an uplift in return on equity to 17.6%, a rise of 3.3 percentage points. The company's financial success in 2024 has been attributed to the expansion of new business and inflation-related price adjustments on existing contracts. Additionally, the insurer reported a combined ratio of 90% for the year in 2024 as against 91.5% in 2023. The company's insurance service result reached €1bn in 2024 from €770m in 2023, supported by a better loss ratio for frequency losses. Large loss payments rose to €402m from €334m in 2023, but the figures stayed below the projected €468m, primarily due to a reduction in man-made losses. Nevertheless, the budget for natural catastrophe (NatCat) losses was exceeded, the company said. The net insurance financial and investment result before currency effects improved to €83m, driven by 'higher investment volumes' and an uptick in current interest income. HDI Global SE CEO Edgar Puls said: 'Our positive results enable us to act as our clients' and brokers' preferred and reliable Partner in Transformation. For this, we aim to be financially strong for decades to come.' 'These strong figures for 2024 are our basis to continue acting as a leading one-stop shop for all our clients. Strategically, HDI Global's risk diversification is strong, enabling us to be a stable, predictable and reliable partner. I am proud to say that we achieved these full-year results through profitability in all regions of the world.' Commenting on the middle-market expansion, HDI Global Asia-Pacific head and Australia managing director Stefan Feldmann stated: 'For 2025, we see substantial growth opportunities in the Mid-Market space, which we perceive to be under-represented for HDI, but our broker partners show a great interest in working with us as we offer a refreshingly different approach to this segment.' "HDI Global insurance revenue up 10% in 2024 " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
