French Reinsurer SCOR Posts Quarterly Net Profit
NU Online News Service, May 18, 3:43 p.m. EDT?The French reinsurance giant SCOR reported 31.8 million euros ($37.8 million) for its first-quarter consolidated net income, compared with 31.4 million euros ($37.4 million) posted for the period in 2003.[@@]
Operating income for the quarter dropped substantially, to 29.4 million euros ($35 million), down from 60.9 million euros ($72.5 million) reported one year ago.
The Paris-headquartered SCOR's gross premiums written for the first quarter also declined, to 716 million euros ($852 million), down 43 percent from 1.26 billion euros ($1.50 billion) reported during the year-ago period.
This quarterly decrease in gross premiums written, the company stated, was largely caused by the expected cutback in premiums issued by the large-corporate-accounts branch during the first quarter, as well as by the non-renewal of a major life reinsurance policy booked in the 2003 first quarter.
SCOR's reported business lines consist of non-life reinsurance (property-casualty, large corporate accounts, and credit and surety), life & accident reinsurance (individual life and group life, health and long term care, finance, accidents, disability, unemployment) and alternative risk transfer (commercial risk partners).
For its non-life reinsurance business, the company reported gross premium income of 388 million euros ($461 million) in the first quarter, down 48 percent from one year ago.
Meanwhile, the net combined ratio showed a significant improvement at 98.8 for the first quarter, compared with 100.1 reported during the 2003 first quarter.
Commenting on the falling premium volume, Chief Executive Officer Denis Kessler said that SCOR has made profitability?not premium volume?"an essential condition for underwriting new policies" and that the company has chosen to withdraw from markets and activities considered unprofitable.
"This redeployment toward SCOR's core business and markets where the group has an acknowledged expertise is reflected in declining gross premium income," Mr. Kessler said.
Mr. Kessler also noted that SCOR?which has suffered a number of adverse ratings actions during the past year?has since been "re-reserved, recapitalized, resized and repositioned." He assured that SCOR now has the resources needed to restore profitability and solvency.
"The results recorded in the first quarter of 2004 confirm the turnaround that began in the fourth quarter of 2003," Mr. Kessler said.
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