Canadian Underwriter

Scor rating affirmed on narrower loss

April 5, 2004   by Canadian Underwriter

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After reporting a narrower loss for 2003, French reinsurer SCOR Group saw its rating from A.M. Best affirmed at “B++” (very good) with a stable outlook, and the company has been removed from the review it was placed under last September.
For 2003, SCOR’s loss was EUR 314 million (Cdn$495 million), down from EUR 455 million (Cdn$717 million) in 2002. And, in the last quarter of 2003, the company was able to post a positive result, with net income of EUR 35 million (Cdn$55 million), after a EUR 10 million (Cdn$16 million) reserve addition.
The company has been implementing a recovery plan since November 2002 to turnaround its financial results. Despite the loss posted for 2003, both of the last two years have seen the company produce an underwriting profit, posting a combined ratio of 96% on its non-life book. Premium income for 2003 was down 26% as the company continues to focus on profitable business. At the same time, operating costs dropped 13% last year, and investment income rose 82%.
Commenting on the ratings affirmation, A.M. Best says: “The rating reflects SCOR’s very good prospective capitalization, improving trends in underlying performance, actions taken to mitigate the risks associated with Commercial Risks Partners Limited (CRP) and the company’s credit derivatives portfolio, as well as strong support from its core clients in continental European markets. Offsetting factors are recent volatility in reserves and the impact that the company’s recent performance has had on its profile in certain markets [i.e. the U.K. and U.S.].”

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