SCOR Back In Black, Announces WTC Loss Reserve

By Michael Ha

NU Online News Service, March 24, 4:27 p.m. EST?France's largest reinsurer, SCOR, said it returned to profitability in 2004 following a year-earlier loss and it will bolster reserves by 20 million euros ($25.9 million).[@@]

The company said the reserve was taken for reinsurance it wrote for Allianz Global Risks, a carrier that received an unfavorable verdict in the World Trade Center insurance claim trial.

If upheld, the verdict against Allianz could exceed $800 million. SCOR did not say how much coverage was involved in its treaty with Allianz.

The reinsurer announced that its net income rose to 68.7 million euros, or about $89 million, in contrast to a 2003 loss of 314 million euros, or about $406 million.

For its 2004 non-life reinsurance operations?which include property-casualty, large corporate accounts and credit and surety treaties?SCOR posted operating income of 88 million euros, (about $114 million in the current exchange rate).

That result improves from the operation's loss of 211 million euros ($273 million) reported during 2003. The non-life gross written premiums were 1.321 billion euros ($1.709 billion), and the combined ratio was 100.1 percent, compared with 121.3 percent in 2003.

"SCOR was back in profit in 2004. This return to profitability was achieved despite a year marked by the exceptionally high number of natural events and claims in North America and Asia," stated Chairman and Chief Executive Officer Denis Kessler. The reinsurer said exceptional climatic events in 2004 amounted to 76 million euros ($98.4 million).

"We are pleased that the group's results are based on a significant gross and net technical surplus in non-life reinsurance," Mr. Kessler said. He said the results include additional reserves following the "unfavorable legal decision" on the World Trade Center claim last December.

The reinsurer said that following the verdict returned on Dec. 6, 2004 by a New York jury in the second phase of the WTC insurance proceedings, it decided to establish additional reserves of 20 million euros, ($26 million) net of retrocession, in the 2004 accounts.

SCOR wrote property reinsurance for Allianz Global Risks. Allianz's per-occurrence WTC property coverage exposure was $432.6 million, but the company was found to be liable for two occurrences during the second phase of the insurance coverage trial. Separate appraisal proceedings are currently underway to establish the amount of indemnification due from the insurers.

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SCOR Back In Black, Announces WTC Loss Reserve

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