S&P Assigns SCOR Global ‘A-‘ Ratings; Affirms Group Ratings

May 3, 2006

Standard & Poor’s Ratings Services announced several rating actions concerning French reinsurer SCOR. S&P said it has assigned an indicative “A-” long-term insurer financial strength rating to proposed Paris-based non-life reinsurer SCOR Global P&C S.A. At the same time, S&P affirmed its “A-” long-term counterparty credit and insurer financial strength ratings on SCOR S.A. (SCOR or the group) and its guaranteed subsidiaries. The outlook on all entities is stable.

“The rating on SCOR Global P&C is subject to confirmation pending the completion of its legal incorporation, which is expected before the end of May 2006,” said S&P. “The rating is underpinned by a parental guarantee, and is consequently driven by the ratings on SCOR.”

“SCOR Global P&C is a product of SCOR’s initiative to enhance its efficiency by streamlining its legal structure,” explained S&P credit analyst Peter Grant. It’s expected to be incorporated with approximately €550 million ($695 million) of capital and surplus, and will become the hub for the group’s non-life business going forward.

“SCOR Global P&C will accept all of the business that is currently written directly by SCOR and, going forward, is expected to consolidate all of the business that is currently underwritten by SCOR’s three existing non-life operating subsidiaries in the U.K., Germany, and Italy,” S&P explained. “As part of the reorganization, these subsidiaries will be converted into branches of SCOR Global P&C. SCOR Global P&C is expected to be a candidate to attain core status, under Standard & Poor’s group ratings methodology, in due course.”

“The affirmation of the ratings on SCOR reflects the fact that it will retain its credentials as an operating company subsequent to the completion of the reorganization. SCOR’s status as an operating company is underpinned by the fact it will be the recipient, on an ongoing basis, of an intragroup proportional retrocession agreement from both SCOR Vie (A-/Stable) and SCOR Global P&C, of not less than 35 percent of the total premium volume that those two companies underwrite. In addition, SCOR’s policyholders and debtholders will be the beneficiaries of an upstream guarantee to be provided by SCOR Global P&C.”

S&P also said it “expects both SCOR and SCOR Global P&C to ensure that all valid claims made by policyholders and/or debtholders are honored. Consequently, the ratings on these entities will move in tandem going forward. The ratings on SCOR reflect its strong competitive position, appropriate corporate strategy, strong prospective capital adequacy, and strong financial flexibility. These positive factors are partially offset by the low barriers to entry that characterize the non-life reinsurance industry, dampened life and accident embedded value growth, and less strong quality of capital.”

S&P indicated that the stable outlook reflects its “expectation that SCOR will be able to achieve and maintain significant improvements in the level of its operating performance within the non-life segment, underpinned by proactive cycle management. Consequently, capital adequacy is expected to move comfortably into the ‘A’ (strong) range, offsetting concerns surrounding the quality of the group’s capital.”

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