Canadian Underwriter

A.M. Best downgrades Scor; Employers Re and Allianz on watch

November 25, 2002   by Canadian Underwriter

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Rating agency A.M. Best has downgraded Paris-based reinsurer SCOR in light of news the company is projecting yearend losses of EUR 400 million (Cdn$623 million). Best downgrade of SCOR’s financial strength from A- from A (excellent) follows on the heels of Moody’s withdrawing the reinsurer’s A rating.
A.M. Best is keeping Scor under review pending further assessment and the outcome of a EUR 381 million (Cdn$593 million) rights issue the company announced last week. “Failure to raise additional funds will place the current capitalization under further strain, which could trigger a downgrade.”
SCOR’s senior unsecured debt and five-year convertible bond ratings were also downgraded to “a-” from “a+”. Its subordinated debt has been downgraded to “bbb” from “a-“.
A.M. Best has also placed on watch the ratings of GE Global’s Employers Reinsurance Corp. (ERC) and Allianz.
Last week, ERC’s parent, GE, announced it would sell off life reinsurance operations and was open to buyers on is non-life reinsurance business. However, GE took a charge of US$1.8 billion (Cdn$2.8 billion) to recapitalize ERC.
“The ratings of GE Global will remain under review pending further discussions with management regarding GE Global’s progress towards improving underwriting performance, re-balancing its significant book of excess casualty business, restoring underwriting performance to consistently stronger levels, the disposition of the life reinsurance business and GE’s long-term commitment to GE Global,” states A.M. Best.
Allianz’s A++ (superior) rating is under review following the company’s announcement it expects to lose EUR 2.5 billion (Cdn$3.9 billion) this year. Allianz plans to raise EUR 2 billion (Cdn$3.1 billion) through a new debt issue.

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