SCOR rating affirmed with negative outlook

Rating agency A.M. Best has affirmed the A- (excellent) rating of Paris-based SCOR and its subsidiaries, including SCOR Canada Reinsurance Co. However, the rating comes with a negative outlook.
The affirmation follows a move by most rating agencies to place SCOR on watch, and a downgrade of the company by Moody’s which saw SCOR lose its “A” rating.
A.M. Best also downgraded SCOR from A to A- late last year following news that the company expected to post a yearend loss of EUR400 million (Cdn$625 million).
However, Best is affirming the rating based on a successful rights issue, which saw the company raise EUR381 million (Cdn$620 million). The affirmation also reflects SCOR’s “conservative” underwriting plans for this year and its reserve boost in third quarter 2002, specifically aimed at its U.S. reinsurance, Bermuda commercial risk and credit businesses.
The company’s “risk profile” has benefited from the decision to cut written premiums by EUR350 million (Cdn$570 million) in 2003, including reducing its exposure in the U.S. market.
SCOR’s yearend results have yet to be released, and A.M. Best notes that should the loss tally be higher than the EUR400 million prediction, a ratings downgrade could ensue. However, a stronger performance in 2003 is expected nonetheless.