A.M. Best Lowers SCOR Ratings, Removes from Review

January 15, 2002

A.M. Best announced that it has downgraded the financial strength rating of France’s SCOR to A (Excellent) from A+ (Superior) and has removed the rating from under review. The new rating also applies to all of SCOR’s subsidiary companies, as well as to existing debt and commercial paper ratings.

The rating agency indicated that its action “reflects the erosion of SCOR’s consolidated risk-based adjusted capitalization to a level not consistent with an A+ and the deterioration of the group’s financial position, largely owing to severe losses from its commercial book and losses derived from the World Trade Center terrorist attacks.”

Specifically best’s report sited the” fall in the equity markets, severe industrial losses and a further substantial adjustment of reserves for the US and European operations” as having led to “an erosion” of SCOR’s consolidated risk-based capitalization. The largest loss was $150-$200 million from the WTC attacks as well as losses from its industrial portfolio and “a strengthening of the reserve of its European and U.S. book following negative developments which emerged in the third and fourth quarters of 2001.”

The rating also considers “SCOR’s excellent business profile as a global reinsurer and experienced management team,” Best stated. “SCOR enjoys an excellent business profile in the global reinsurance sector with a solid mix of business by product and geographic region. It ranks within the top 10 worldwide reinsurance groups with consolidated premium income of EUR 3.5 billion[$3.12 billion] at year-end 2000.

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