French powerhouse Scor saw gross written premiums climb to Eur1.72bn ($1.92bn) in its P&C division in the first quarter of the year – up 16.1 percent at current exchange rates – driven by a “very positive” January renewal period and portfolio growth, particularly in the US.

The P&C unit reported a stable operating result in the first quarter of Eur161mn compared to Eur162mn in the same three-month period of 2018.

The division reported a net combined ratio of 94.6 percent for the quarter, a 2.8 percentage point deterioration from the same quarter in the prior year.

Scor said the combined ratio deterioration was driven by a cat ratio of 6.5 percent –  below Scor’s 7 percent cat budget – and mainly impacted by significant upward market revisions to its loss estimates for the Japanese Typhoons that took place in Q3 2018.

The reinsurer has upped its loss estimates for Typhoons Jebi and Trami by Eur36mn and Eur17mn respectively and expects smaller natural events that occurred in Q1 2019 to total Eur27mn.

Scor said excluding the market revisions of the Japanese typhoons, the combined ratio would have been 90.7 percent.

The French carrier said it expects P&C growth for the whole of 2019 to normalize to the upper range of its planned growth assumption range of 5-8 percent.

Scor confirmed the 1.6 percent headline rate increase experienced at April renewals, but said the increase is mostly offset by model and experience changes with little impact to its combined ratio.

The reinsurer grew its P&C US book by 27 percent and Japanese book by 15 percent in April but pulled back 6 percent in India from reducing agriculture.

Japanese cat excess of loss (Cat XL) business saw 15 percent rate increases, with 20-30 percent on loss affected wind business. However, quake exposure remained flat with US Cat XL rates up 2-3 percent.

At group level, the operating resulting slipped nearly 11 percent down to Eur 216mn in the quarter compared to to the first three months of 2018.

The carrier posted an uptick of 5 percent in gross written premium, which climbed to Eur3.99bn.

Denis Kessler, chairman and chief executive officer of Scor, said: “The strong start to 2019 bears witness to the depth of Scor’s franchise and the relevance of the Group’s strategy.

“The Group’s technical profitability is highly satisfactory, as demonstrated respectively by the P&C combined ratio and the life technical margin,” he continued.

“Scor continues to create long-term value and provides its shareholders with attractive returns, raising the dividend per share to EUR 1.75 subject to approval by today’s Annual General Meeting.”

Commenting on Scor’s April renewal experience, KB&W analyst William Hawkins said: “From this detail here our high level conclusions are (1) strong rate increases are seen in heavily loss-affected lines; (2) otherwise, the market remains competitive; (3) even “real” rate increases are being largely absorbed by higher loss picks and only time will tell whether these are too conservative; (4) capacity is plentiful and hence a cap on reinsurance pricing power.

“This is probably a bit better than we feared a year ago but of little material impact on our combined ratio outlooks (which are generally flat short term and rising longer term in the absence of further catastrophe shocks).”