French Reinsurer SCOR Posts Quarterly Net Profit

NU Online News Service, May 18, 3:43 p.m.EDT?The French reinsurance giant SCOR reported 31.8million euros ($37.8 million) for its first-quarter consolidatednet income, compared with 31.4 million euros ($37.4 million) postedfor the period in 2003.[@@]

Operating income for the quarter dropped substantially, to 29.4million euros ($35 million), down from 60.9 million euros ($72.5million) reported one year ago.

The Paris-headquartered SCOR's gross premiums written for thefirst quarter also declined, to 716 million euros ($852 million),down 43 percent from 1.26 billion euros ($1.50 billion) reportedduring the year-ago period.

This quarterly decrease in gross premiums written, the companystated, was largely caused by the expected cutback in premiumsissued by the large-corporate-accounts branch during the firstquarter, as well as by the non-renewal of a major life reinsurancepolicy booked in the 2003 first quarter.

SCOR's reported business lines consist of non-life reinsurance(property-casualty, large corporate accounts, and credit andsurety), life & accident reinsurance (individual life and grouplife, health and long term care, finance, accidents, disability,unemployment) and alternative risk transfer (commercial riskpartners).

For its non-life reinsurance business, the company reportedgross premium income of 388 million euros ($461 million) in thefirst quarter, down 48 percent from one year ago.

Meanwhile, the net combined ratio showed a significantimprovement at 98.8 for the first quarter, compared with 100.1reported during the 2003 first quarter.

Commenting on the falling premium volume, Chief ExecutiveOfficer Denis Kessler said that SCOR has made profitability?notpremium volume?"an essential condition for underwriting newpolicies" and that the company has chosen to withdraw from marketsand activities considered unprofitable.

"This redeployment toward SCOR's core business and markets wherethe group has an acknowledged expertise is reflected in declininggross premium income," Mr. Kessler said.

Mr. Kessler also noted that SCOR?which has suffered a number ofadverse ratings actions during the past year?has since been"re-reserved, recapitalized, resized and repositioned." He assuredthat SCOR now has the resources needed to restore profitability andsolvency.

"The results recorded in the first quarter of 2004 confirm theturnaround that began in the fourth quarter of 2003," Mr. Kesslersaid.