SCOR 1st Half Net Increases by 18% to $90 Million

September 2, 2005

France’s SCOR Group made more out of less for the first six months of 2005. Although the Paris-based reinsurer’s gross written premiums declined by 12 percent to 1.184 billion euros ($1.485 billion), net income rose 18 percent to 72.2 million euros ($90.5 million) compared to 61 million euros ($76.5 million) in the first half of 2004.

Other first half highlights included:
• Operating income: 140 million euros [$175.6 million] (+12 percent compared to the first half of 2004)
• Net income per share: 9 euro cents (+12 percent compared to the first half of 2004)
• Group equity at 30 June 2005: 1.705 billion [$2.14 billion] (+29 percent compared to 30 June 2004)
• Combined ratio for Non-Life business: 97.2 percent excluding CRP (99.7 percent including CRP)
• Margin on net earned premiums for Life business: 5.8 percent
• Investment income net of expenses and excluding borrowing costs: 197 million euros [$247 million] (+16 percent compared to the first half of 2004)

The report also noted that SCOR had carried out 547 million euros ($686 million) worth of commutation agreements, had maintained a “strict underwriting policy” in a more competitive environment, and that Standard & Poor’s had upgraded SCOR’s ratings to ‘A-‘ with a stable outlook.”

It also indicated that SCOR had dodged several potential liabilities, noting that “due to the local Pool Re system in England, which covers damage resulting from terrorist attacks, the Group is not exposed with regard to the attacks in London. Moreover with regard to the recent air disasters, SCOR is not active in the aviation sector.” Hurricane Katrina, however, could cost the Group between 25 and 35 million euros ($31.3 and $44 million) according to its preliminary estimates. SCOR’s exposure to U.S. catastrophe risks, however, is not large, and the costs of Katrina are not expected to unduly impact the Group’s financial condition.

SCOR stressed that it “will actively manage the cycle and will adapt its underwriting volume to market conditions. The drop in premiums is also due to the decreased business volume in Life reinsurance, which is penalized by the rating level in a less favorable environment.”

Chairman and CEO Denis Kessler issued the following statement: “During the course of this first half, SCOR managed to repurchase the minority interests of its Irish subsidiary IRP by refinancing itself under favorable conditions. At 30 June 2005, SCOR had an equity level of EUR 1,705 million [$2.14 billion], which confirms the Group’s high level of solvency. SCOR is, moreover, continuing to apply its rigorous underwriting policy as demonstrated by the improvement of the combined ratio. The Group has conducted an active investment policy and has recorded an increase of 16% in investment income.

“SCOR is delighted by Standard & Poor’s decision of 1 August 2005 to upgrade its financial solidity rating to “A-, stable outlook”, which is the result of more than two and a half years of an active Group recovery program. In June 2005, SCOR launched the “New SCOR” program, which is designed to improve its cost ratio. All the necessary conditions are now in place for the SCOR Group to prepare for the 2006 renewals as advantageously as possible.”

The full report and further comments may be obtained on the Group’s Website at:

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