PARIS, May 24, 2002 (PRIMEZONE) -- SCOR (NYSE:SCO):
"Confirming the positive trends we reported at the start of the year, SCOR registered strong business growth and a return to profit in the first quarter of 2002. We are confident of achieving our growth and earnings objectives, in light of these developments. In recent months, SCOR has embarked on several complementary initiatives to reduce its risk profile and reallocate a portion of its resources. The Group is now poised to benefit fully from the return to highly favorable market conditions."
Jacques Blondeau, Chairman and CEO
First quarter figures cannot be extrapolated to the full year due to time lags in certain writings and to features of quarterly accounting specific to reinsurance.
Premium Income Rises Steeply: + 28 %
Q1 2002 premium income rose 28% to EUR 1 434 million, against EUR 1 124 million for the corresponding period last year. These figures are in line with Group objectives, which target growth of 20% in business volumes for 2002.
in EUR million 03/31/02 03/31/01 Change 12/31/01 Property & Casualty Reinsurance 677 405 + 67% 1 876 Life and A&H Reinsurance 403 378 + 7% 1 503 Specialty Reinsurance 353 341 + 4% 1 511 Consolidated premium Income 1 434 1 124 + 28% 4 890
Property & Casualty reinsurance premium income surged 67% due to price increases across all sectors and markets, consolidation of Sorema's portfolio, integrated in July 2001, and thanks to strong business developments with Group clients.
Premium income for this business segment totaled EUR 677 million at end-March 2002, compared with EUR 405 million one year earlier.
Property & Casualty reinsurance is expected to grow by approximately 30% for full-year 2002, as forecast at the beginning of the year.
Life, A&H reinsurance premium income totaled EUR 403 million at end-March 2002 compared with EUR 378 million in Q1 2001, a rise of 7%. This apparently modest increase is due to seasonal booking of income over the year from certain large contracts.
Forecast growth for this sector remains in line with Group objectives at around 20% for 2002.
Premium income in Specialty reinsurance grew by 4% to EUR 353 million for the first quarter of 2002, against EUR 341 million for the corresponding period last year.
This apparent stability in fact obscures a sharp increase, + 79%, in Large Corporate Accounts, chiefly due to rate increases and significant market share gains, especially in energy and property classes.
The rapid growth in Large Corporate Accounts business witnessed in Q1 will be confirmed over 2001 as a whole.
Alternative Risk Transfer registered a decline of 54% in Q1 2002, as anticipated. Full-year premium income for this sector is expected to decrease by around 20% relative to 2001, in line with the Group's strategy of reining-in this activity in response to technical and financial conditions in the United States.
Credit & Surety business was down 38% following SCOR's selective withdrawal from the Surety market in the U.S. and the drastic cut back in Group exposure to Credit Derivatives.
A Sharply-Improved Combined Ratio
The combined ratio for all business on SCOR's books for Q1 2002 still partly reflects business written in earlier years. It is steadily improving and currently stands at 108.4%, compared with 113.5% for the same period last year and 124% for 2001 as a whole. The combined ratio expected on business written since January 1, 2002 works out to less than 100%, confirming the return to very favorable market conditions.
This ratio is expected to go on improving over the coming quarters.
Operating Income is Positive, Rising EUR 74 Million Compared with Q1 2001
Operating income (before tax and goodwill depreciation) improved very sharply to EUR 19 million in the first quarter of 2002, compared with a loss of EUR 55 million for Q1 2001.
Q1 2002 Group net income totaled EUR 7 million, against a loss of EUR 24 million for the same period in 2001.
in EUR million 03/31/02 03/31/01 Change 12/31/01 Gross written premiums 1 434 1 124 +28% 4 890 Net written premiums 1 205 949 +27% 4 122 Operating income 19 (55) ns (461) Group net income after tax 7 (24) ns (278) Investments (marked to market) 9 862 8 302 +19% 9 605 Net technical reserves (excluding liquidity reserve) 10 568 8 585 +23% 10 398 Group shareholder's equity 1 321 1 307 ns 1 318 In EUR Earnings per share 0.19 (0.76) ns (8.18) Earnings per share, fully diluted 0.20 (0.63) ns (7.13) Significant Increase in Cash-Flow from Operations: + 21% Compared to 1st Quarter 2001
Cash-flow from operations amounted to EUR 125 million at end-March 2002, against EUR 103 million for the corresponding period in 2001, and EUR 10 millions for the full year 2001. This positive evolution of the cash situation, brought about by the strong business growth, should continue over the next quarters.
Actively Managed Financial Resources
The Group continued to strengthen its capital, a policy inaugurated in the second half of 2001, and, in recent months, successfully concluded several operations i.e.:
-- the creation of Irish Reinsurance Partners, which boosted Group
shareholders' equity;
-- the issue of a USD 150 million Cat Bond (Atlas Re II) and the
placing of a EUR 130 million cover (Horizon) for the Group's
Credit reinsurance business, which clearly enhanced SCOR's risk
profile;
-- the disposal of its interest in Coface and the sale of Fulcrum's
business, to be effective during the course of 2002, which will
allow the Group to concentrate further on core business areas.
SCOR thus has the means to pursue its rapid growth.
-- Very positive prospects ahead
SCOR's decisions to shift its business toward the most profitable sectors, combined with the distinctly improved underwriting terms already recorded in these classes, should enable the Group, excluding special events, to reach a satisfactory level of profitability over the next few years.
With 30 offices around the world, serving clients in over 150 countries, SCOR is France's largest reinsurer and one of the industry world leaders. Thanks to its ability to provide innovative technical and service support, the SCOR Group has built up a well balanced portfolio of Property and Casualty, Life, Accident & Health and Specialty reinsurance products and services. The Group's ratings, which include AA- from Fitch, A (Excellent) from AM Best and A+ from Standard & Poor's, reflect its financial strength and underwriting expertise. SCOR shares, which belong to the SBF 120, Bloomberg European Insurance, NEXT 150 and Dow Jones STOXX indexes, are listed in Paris and New York. SCOR has a widely diversified international shareholder base, with more than 20,000 shareholders in 64 countries.
Certain statements contained in this press release are forward-looking statements that are based on risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements. Additional information regarding risks and uncertainties is set forth in the current annual report of the company.