SCOR Reports Q3 Net Income of $255 Million; Gains on Transamerica Sale

French reinsurer SCOR Group announced net income for the third quarter of 2011 of €188 million [$255 million], a 70.1 percent increase from the same period last year, as gross written premiums topped €2 billion [$2.71 billion] during the period, up 15 percent.

The earnings bulletin stressed that the group had come through the major shocks in the 3rd quarter, notably the ongoing financial turmoil in Europe and the “exceptional natural catastrophes in the first part of the year.” It also noted that the 3rd quarter took into account the completion of the acquisition of Transamerica Re, which was finalized on the 9th of August.

Gross written premiums in Q3 were €2.021 billion [$2.74 billion], up 14.7 percent compared to the 3rd quarter 2010, and 20.0 percent at constant exchange rates. SCOR Global P&C recorded gross written premiums of €1.037 billion [$1.405 billion], a 2.9 percent increase.

The unit’s net combined ratio stands at 94.8 percent, down by only 0.1 percent compared to Q3 2010. The figure included “5.9 points from new natural catastrophes (notably the floods in Denmark and hurricane Irene), but with no deterioration of the net losses of Q1 and Q2 2011 events thanks to SCOR’s strong capital shield program,” the announcement said.

SCOR Global Life gross written premiums were €984 million [$1.333 billion], up 30.5 percent compared to the 3rd quarter 2010, with the Transamerica Re business contributing €256 million [$346.9 million] since August 9 2011. SCOR said the life reinsurance operating margin stands at 6.4 percent, supported by improved technical profitability and despite lower financial results due to a deliberately high level of liquid assets.

SCOR described the Q3 results as “solid performances.” It also noted the “contribution of €108 million [$146.34 million] related to Transamerica Re, which it explained was “composed of a gain on purchase of €101 million [$136.85 million] and an operating performance net of tax for the period from 9 August to 30 September 2011 of €7 million [$9.5 million].

For the first nine months of 2011 SCOR’s premium income was €5.421 billion [$7.345 billion], up 8.0 percent compared to the first nine months of 2010. It also said that “on a pro-forma basis, premium income stands at €6.405 billion [$8.68 billion].

Gross written premiums for SCOR Global P&C were €2.981 billion [$4.042 billion], up 7.5 percent compared to the same period in 2010. The net combined ratio is 106.6 percent, up 6.9 points compared to the first nine months of 2010, but well below the 135.2 percent in Q1 2011 and 113.1 percent in H1 2011. 18.7 points are related to natural catastrophes (10.5 points in the first nine months of 2010).

Net income for the 9 month period was €228 million [$309 million], compared to €267 million [$361.8 million] in the same period of 2010, with SCOR noted, “total net pre-tax cost of €476 million [$645 million] for natural catastrophes occurring in the first nine months of the year. Net income stands at €266 million [$360 million] on a pro-forma basis. Return on invested assets (excluding funds withheld by cedants) stands at 3.8 percent, compared to 4.0 percent for the same period in 2010.”

Chairman and CEO Denis Kessler, commented: “In the 3rd quarter 2011, SCOR has once again successfully combined profitability, growth and solvency. Having demonstrated its capacity to absorb a series of exceptionally intense natural catastrophes in the first half of 2011, SCOR has demonstrated considerable resilience this quarter in the face of a very fragile economic and financial environment.

“Since the beginning of the financial crisis in 2007, the effectiveness of SCOR’s risk anticipation and management policy has enabled the Group to limit the impact of this environment on its shareholders, for instance by having no exposure to sovereign debt in peripheral European countries.

The finalisation of the Transamerica Re mortality portfolio acquisition in the 3rd quarter, which gives the Group a new dimension in the Life Reinsurance market, has helped SCOR to accelerate towards the implementation of its strategic plan for the period 2011-2013, “Strong Momentum”, version “V1.1″ of which was presented at the beginning of September.”

Source: SCOR Group