SCOR Posts Strong Q1 Gain, $35M Net

May 16, 2003

France’s SCOR Group, the world’s 8th largest reinsurer, continued its earnings recovery with strong first quarter net income of 31 million euros ($35.36 million), compared to 7 million euros ($7.98 million) in the same period last year and a 455 million euro ($519 million) loss in the fourth quarter of 2002.

Other financial figures from the earnings report included the following:
— Gross written premiums for Q1 2003 totaled EUR 1,262 million [$1.44 billion]. At constant exchange rates, the decline works out to 12% relative to Q1 2002. (-2% at constant exchange rates).
— Technical operating income for Q1 2003: EUR 60 million [$68.4 million].
— Income before tax and goodwill amortization for Q1 2003 amounted to EUR 67 million [$76.41 million], compared with EUR 19 million [$21.67 million] for the same period of 2002.
— Operating cash flow for the first quarter totaled EUR 70 million [$79.83 million].

The results were announced at a combined General Meeting of Shareholders and the Board of Directors held yesterday in Paris, chaired by Denis Kessler, SCOR’s Chief Executive. “It approved all of the resolutions submitted to it,” said the company, “and in particular the election of new directors and the authority given to the Board to grant stock options to the senior executives and all other employees of SCOR Group.”

Kessler was confirmed as Chairman and CEO of SCOR. The company also elected, or relected 14 board members – an employee representative is to be elected soon to fill the 15th position – 11 of whom are considered as “independent directors.”

The announcement noted that “key operating data for Q1 2003 reflect stricter risk selection and improved underwriting terms.” SCOR said that “gross written premiums for the first quarter of 2003 were down 12% relative to the same period of 2002, at EUR 1,262 million [$1.44 billion] , versus EUR 1,434 million [$1.635 billion] in 2002. At constant exchange rates, premium income would have been down 2%, in line with the forecast figure at the time of the January/February 2003 renewals.

“Excluding Commercial Risk Partners, which ceased writing business in January 2003, gross written premiums for the first quarter of 2003 increased by 4% (at constant exchange rates) relative to the Q1 2002 figure. Net earned premiums for the first quarter of 2003 amounted to EUR 1,220 million [$1.39 billion], up 8% relative to the comparable figure for Q1 2003 (EUR 1,126 million) [$1.284 billion].”

At the end of the Board meeting Kessler, stated: “SCOR Group is committed to implementing its Back on Track plan aimed at restoring profitability and bolstering solvency. Redeployment of the portfolio toward the most profitable activities on markets with the greatest upside potential is now in progress. SCOR Group has benefited from the ongoing reinsurance market upturn. These figures are early evidence of recovery. Further progress will depend on how far rates continue to reflect risks, on loss experience in 2003, and on the financial environment in general.”

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