SCOR Issues Statement on S&P Downgrade

July 7, 2003

Standard & Poor’s rating service has reportedly downgraded French reinsurer SCOR Group. The decision, which an S&P spokesman said would be made public soon, brought a statement from SCOR management that it “regrets” the decision.

“This decision does not reflect the improvement in the Group’s financial condition following reserves booked and recapitalization at the end of 2002,” said the company announcement. “Nor does it reflect the impact of the recovery measures introduced since that time. The ‘Back on Track’ plan adopted in November 2002 is being implemented rigorously and is starting to bear fruit.”

S&P lowered SCOR’s ratings last October to ‘A’ with a stable outlook, but until the latest bulletin from the ratings agency appears, it is not possible to cite the reasons for this latest downgrade.

The company’s press release, however, does allude to the decision to close CRP, it’s Bermuda-based operation that underwrites alternative risk transfer reinsurance, to new business, and the current negotiation to sell it to unidentified buyer (See IJ Website July 1). It also refers to SCOR’s credit derivatives business. The bulletin said it wanted to make it “clear that SCOR intends to maintain its prudent underwriting policy and to strengthen its balance sheet in order to ensure optimum security for its customers.”

In a separate announcement SCOR said it “has decided to spin off its life reinsurance operations and to transfer its entire existing life reinsurance business worldwide and corresponding assets to a separate entity.” The new entity “may be opened up to outside partners.”

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