SCOR's S&P Ratings Put On CreditWatch
NU Online News Service, June 18, 10:36 a.m. EDT?Standard & Poor's Ratings Services said it has placed all its long-term ratings for Paris-headquartered reinsurer SCOR and its subsidiaries on "CreditWatch" with negative implications.
The ratings involved include the reinsurers risk of default, "A-Minus" counterparty credit and insurer financial strength ratings.
Marcus Rivaldi, credit analyst at New York-based S&P, pointed to SCOR's "disappointing" 2003 first-quarter results, which, he said, further indicate a "weakened although still strong" business position.
SCOR in 2002 reported a wider-than-expected loss as it increased reserves by more than $55 million to cover unprofitable policies underwritten in the late 1990s.
In 2002, the company reported a full-year loss of 455 million euros ($494.6 million), which is bigger than the 278 million euro loss ($302.2 million) from its previous year as well as the company's earlier loss estimate.
Mr. Rivaldi added that S&P is also concerned with a potential for further reserve strengthening and its material effect on the reinsurer's capital.
S&P is planning to meet soon with SCOR group management to resolve its CreditWatch status. The rating agency added that if it decides to lower ratings on SCOR and its subsidiaries, the downgrades won't be for more than "one or two notches."
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