Negative Rating Reaction to SCOR Re Purchase

April 17, 2000

Standard & Poor’s announced that it had placed French reinsurer SCOR Group “on credit watch with negative implications,” following the announcement of its plans to purchase PartnerRe Life Insurance Co. of the U.S. from its parent, Bermuda’s PartnerRe.

“Before today’s credit watch announcement, SCOR’s rating had a negative outlook, reflecting concerns that future capitalization and profitability may fall below expectations. SCOR recently published results showing weak profitability owing to an exceptional series of natural catastrophes, including particularly severe windstorms in Europe, as well as overall soft market conditions. As a consequence, the non-life combined ratio reached 119 percent for 1999. These results and any capital strain stemming from the acquisition will adversely affect SCOR’s capital adequacy,” said the announcement.

All SCOR companies were to be affected by the decision. S&P plans to meet with SCOR management to discuss the situation and review prospective earnings and capital adequacy provisions before making any definitive changes in the SCOR’s financial ratings.

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