SCOR Premium Income up 25%

March 6, 2006

France’s SCOR Group noted a 25 percent rise in worldwide premium income follwing the January renewal season. Non- life and credit & surety treaties totaled €1.041 billion ($1.256 billion). The reinsurer said it “is benefiting from recent developments in the reinsurance markets.”

The bulletin notes: “The reinsurance market is currently affected by the exceptional climatic events that took place in 2005, as well as by the tightening of the retrocession market. In addition to this, the tendency observed on certain insurance markets over the past few years towards an increased retention by cedants, a higher level of recourse to non proportional coverage and consolidation through mergers and acquisitions, has been confirmed. This has resulted in a reduced volume of reinsurance on the most mature markets.”

SCOR suffered through a series of losses beginning in the fall of 2002, eventually losing its “A” rating and around 25 percent of its business. Denis Kessler replaced Jacques Blondeau as Chairman and CEO in November 2002, and subsequently embarked on a “Back on Track” plan, that raised additional capital and jettisoned some loss making subsidiaries.

The recent bulletin indicates SCOR has concentrated on “regaining shares on treaties already in its portfolio, benefiting from the long-term relationships it has with its clients as well as from the upgrade of its rating to ‘A-‘, stable outlook by Standard & Poor’s.”

SCOR also said it is “redeveloping its client base by regaining 120 cedants and consolidating its relationships with existing clients by accepting new business, whilst developing the technical and financial innovation of its underwriting teams in the face of a more complex market, as well as their responsiveness in a market that only straightened itself out at the end of December.

In addition SCOR acquired the renewal rights of ALEA Europe last December (See IJ Website Dec. 16, 2005). “These rights represented a written premium volume for SCOR of €61 million [$73.62 million] at 1 January 2006,” said the bulletin.

SCOR also reaffirmed its commitment to underwriting discipline. The bulletin notes hat “during the 2006 renewals, the SCOR Group ensured that it stuck to its underwriting policy centered on profitability and on the quality of business underwritten. The Group has refused to underwrite business that does not meet its underwriting criteria, choosing for example to suspend relations with 39 of its Non-Life treaty clients.”

The January renewals involved around 80 percent of SCOR’s P/C business, 30 percent of its “Large Corporate Accounts business and almost the entire Credit & Surety portfolio.”

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