France’s SCOR Group posted an impressive 53 percent increase in gross written premiums for the 1st half of 2001 to €2.361 billion ($2.12 billion), while net pre-tax profit rose 5.8 percent to€ 99 million ($89.1 million).
All three of SCOR’s main divisions showed impressive growth. Property & Casualty Reinsurance was characterized by “sharp rate increases,” which boosted premiums by 48 percent.
Accident & health reinsurance increased by 77 percent, mainly due to the underwriting of major new life insurance and financing contracts and the expansion of SCOR Life Re, which was not consolidated in the figures for the 1st half of 2000.
Specialty Reinsurance rose 38 percent as SCOR’s Business Solutions division increased its underwriting of large corporate accounts by 99 percent. Credit and Surety business rose 31 percent and Non-traditional (ART) reinsurance “stabilized (+5%) after five years of vigorous growth.”
In July SCOR shareholders approved the company’s acquisition of Sorema SA and Sorema NA, which will also add to earnings. “Over the current financial year, the Group, based on the current upturn of conditions in the reinsurance market, forecasts a considerable improvement in written premiums and operating income. Return on equity should exceed 10%,” said a company bulletin.
The number of positive 1st half earnings reports seem to indicate that the reinsurance market has in fact turned the corner from the soft market and predatory pricing that prevailed in the 1990’s. Moody’s Investors Services in fact issued an opinion changing its outlook for reinsurers from “negative” to “stable.” It cited the extensive “re-pricing” and “re-underwriting” going on throughout the industry as having an overall positive effect, but warned that losses from the 90’s could still have a negative impact.
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