French reinsurer SCOR has blamed an 18% fall in gross written premiums for the first-half of 2003 on the cessation of underwriting activity in its Bermudan subsidiary Commercial Risk Partners in January this year.
French reinsurer SCOR has blamed an 18% fall in gross written premiums for the first-half of 2003 on the cessation of underwriting activity in its Bermudan subsidiary Commercial Risk Partners (CRP) in January this year.
Gross written premiums fell to €2,069m (£1,432m), down from €2,510m for the same period in 2002. Net earned premiums fell by 3.6% to €2,083m from €2,160m in the first-half of 2002.
However, chairman and chief executive Denis Kessler said the group's withdrawal from CRP would reduce volatility and its plans to bring other partners into its newly created life reinsurance subsidiary would strengthen its capital base.
Technical operating income for the six-month period rose to €63m from €13m, while operating cash flow increased to €292m from €58m. Technical reserves were virtually unchanged from 31 December 2002, and stood at €10,358m (£7,172m) at 30 June 2003.
The group's results were also affected by the tornadoes in the US in May, with a net cost after retrocession of €37.6m, and by a foreign exchange gain of €86m. In mid-June the group strengthened its asset and liability currency matching.
Kessler said: "First-half results show an improvement in the fundamentals of the SCOR Group. They are confirmation that the corporate turnaround measures taken for the SCOR Group are starting to produce results. SCOR is doing everything possible to restore in a lasting way the group's profitability and to rapidly reinforce solvency levels."
He added that SCOR had introduced prudent underwriting and investment policies and was refocusing on markets and business lines in which it had acknowledged expertise.
SCOR implemented a 'Back on Track' plan in November 2002, focusing on strict and selective underwriting policy centered on risk control. The Group is also focusing on short-tail lines rather than long-tail lines. Short-tail lines represented 52% of P&C reinsurance business for the first-half of 2003, up two percentage points on the first-half of 2002.
The group has also rebalanced its geographical mix of business. North American premiums have declined 42% between the first-half of 2002 and the first-half of 2003.
The negative loss developments in the US for the 1998, 1999 and 2000 underwriting years continued to weigh on the results of the group, it said. In addition, it continued to be subject to high retrocession costs.
