SCOR Reports $70 Million Nine-Month Earnings

French reinsurer SCOR Group recently approved the company’s financial results for the nine months ended Sep. 30, 2004. SCOR has been through some rough times, but the results, which included 54.3 million euro ($70 million) in consolidated net income, compared to a 349 million euro ($447.5 million) loss for the comparable period in 2003, have bolstered its position. SCOR said that its “business in the first nine months of 2004 is in line with forecasts.”

Other Highlights of the report included:
— Gross premiums written were 1.978 billion euros ($2.536 billion), a 35 percent decrease compared to the first nine months of 2003.
— Operating income was 65 million euros ($83.4 million), compared to a 283 million euro ($363 million) loss for the first nine months of 2003.
— Combined ratio for the Non-Life business was 102.5 percent, versus 123.1 percent for the first nine months of 2003.
— Exceptional climatic events that occurred during the third quarter of 2004 had a cost of 35.5 million euros ($45.6 million). “Excluding the impact of these exceptional climatic events, the combined ratio for the Non-Life business is 99.2 percent for the first nine months of 2004.”
— Group shareholders’ equity was 1.463 billion euros ($1.876 billion) at September 30, 2004, an 84 percent increase from September 30th, 2003.
— Income before tax, goodwill amortization and minority interests amounted to 113 million euros ($145 million) for the first nine months of 2004, compared to a 214 million euro ($275 million) loss for the first nine months of 2003.

The bulletin noted, however, that SCOR’s operating cash flow for the first nine months of 2004 is minus 183 million euros ($235 million). The company said: “This reflects the negative operating cash flows registered in the wake of the significant reduction of underwriting in the United States and the cessation of underwriting in Bermuda.” In addition it noted that a 65 million euro ($83.4 million) commutation, finalized in the third quarter in the U.S., “as well as the commutations which took place in the second quarter at CRP (Commercial Risk Partners) weighed upon the cash flow of the first nine months of 2004. Nevertheless, the operating cash flow remains positive for the Life reinsurance business and the Non-Life reinsurance business in Europe and Asia.”

Discussing the Group’s Non-Life Reinsurance business (Property and Casualty, Large Corporate Accounts and Credit and Surety), SCOR said the sector “generated gross premium income of 1.032 billion ($1.324 billion) in the first nine months of 2004, down 45 percent relative to the first nine months of 2003.

“The underwriting result (operating income before overhead expenses and investment income) came to 58.8 million euros ($75.4 million) for the first nine months of 2004, a strong improvement compared to the first nine months of 2003 (a 318 million euro [$408 million] loss). It has nevertheless been impacted by an amount of 30.5 million euros [$39.2 million] for the cost of the climatic catastrophes that occurred during the third quarter of 2004.”

At the end of the Board meeting, Denis Kessler, Chairman and CEO, stated: “The results for the first nine months of 2004 confirm the quality of SCOR’s underwritings in Life as well as in Non-Life reinsurance. The relative cost for the Group of the serious climatic events in the United States, the Caribbean and in Asia, shows the risk control of recent underwritings, most notably in the United States. The Group undertakes this renewal period with confidence, notably for Non-Life treaties, thanks to the loyalty manifested by its clients. SCOR resolutely undertakes the implementation of the Moving Forward plan, which aims to restore a lasting profitability and an A-level of solvency to its clients.”