SCOR Reports Net Income Increased 123% In 3Q

French insurer SCOR reported net income increased 123 percent in the third quarter of this year primarily because of several acquisitions, including Converium Holding Ltd.

The third-quarter results showed net income increased EUR65 million (U.S. $95 million at the current exchange rate), from EUR53 million ($79 million), or EUR0.57 (84 cents) a share, to EUR118 million ($173 million), or EUR0.74 ($1.10) a share.

The results were on gross written premium of EUR1.26 billion ($1.85 billion) in the quarter, up 75 percent, or EUR538 million ($789 million), from EUR719 million ($1.06 billion) for the same period last year.

The company's property-casualty gross written premium increased 50 percent, or EUR220 million ($323 million), to EUR661 million ($971 million) from EUR441 million ($648 million) for the third quarter last year.

The p-c combined ratio stood at 93.6, a 1.5 point improvement from 95.1 for the third quarter of 2006.

The company is also a writer of life insurance.

SCOR said that net income from Converium contributed EUR45 million ($66 million) to the company's net income. Without that contribution, the company's net income in the quarter would have risen only 38 percent, or EUR20 million ($29 million).

For the first nine months of this year, SCOR said net income rose 93 percent, or EUR144 million ($211 million), to EUR299 million ($439 million) from EUR155 million ($228). Earnings per share rose from EUR1.62 ($2.38) a share to EUR2.22 ($3.26) a share.

Gross written premium over the nine months compared with the same period last year increased 62 percent, or EUR1.3 billion ($1.9 billion), to EUR3.4 billion ($5 billion). Property-casualty gross written premium rose 25 percent, or EUR318 million ($467 million), to EUR1.6 billion ($2.4 billion). The combined ratio dropped 0.7 points to 96.4.

Without acquisitions SCOR said its net income for the nine months would have increased only 23 percent, or EUR190 million ($279 million), and its combined ration during the period would have increased 0.7 points to 97.8.

In a statement Dennis Kessler, chairman and chief executive officer of SCOR, called the results "very satisfactory" and said the firm is "confident that the 2008 renewals will confirm the ambitions that we have set for ourselves."

The company revealed that it paid EUR1.87 billion ($2.74 billion) to purchase Converium, a Swiss-based reinsurer, earlier this year in a combined cash and stock deal. The transaction was completed in August.

The company also reported that it has limited subprime exposure in its investment portfolio to the tune of EUR68 million ($100 million), amounting to 0.4 percent of its portfolio.

SCOR also noted it inherited litigation matters in its acquisition of Converium. One involves a securities fraud suit on loss reserves from 2001 to 2004. The other is a Securities and Exchange Commission investigation of transactions. The company said the matters are ongoing and an unfavorable outcome could have material effect.