SCOR realises strong net income of EUR 124 million in the First Quarter 2008, up 63% despite a challenging financial environment
SCOR's 2008 first quarter results.
SCOR records strong results, carrying its profitability momentum into 2008. A strong business performance in Non-Life and Life more than offsets a decrease in investment income due to a challenging financial market environment. The quarter also saw the positive resolution of two key legacy matters.
- Strong net income year-to-date of EUR 124 million, up 63% compared to the first three months of 2007 on a published basis. On a pro forma basis, the increase would have been 46%. Annualised return on equity (ROE) reaches 14.6% and earnings per share (EPS) moves up to EUR 0.69.
- Solid underlying business performance: Non-Life combined ratio of 98.8% despite above-average natural catastrophe activity over the quarter. Life business records strong operating margin of 7.9%.
- Sustained profitability in the on-going US P&C business, combined with positive commercial developments, leads to the reactivation of EUR 44 million of deferred tax assets.
- Top-line performance with year-to-date 2008 gross written premiums at EUR 1,353 million, up 30% compared to the first three months of 2007 on a published basis.
- Solid April 2008 P&C renewals in the Asia-Pacific region, successfully aggregating the ex-Converium lines whilst maintaining strict underwriting discipline and optimizing the risk profile of the Group.
- Cautious investment approach reinforced by strong cash position of EUR 2.8 billion, return on net invested assets attains 3% year-to-date impacted by negative EUR 35 million equity market investment result.
- Shareholder equity reaches EUR 3.6 billion at 31 March 2008 including minorities, despite adverse foreign exchange movements. Book value per share stands at EUR 19.84.
- Positive resolution of key legacy matters: agreement to settle Converium class action for EUR 74 million (pre tax and before D&O recoveries), with no expected net impact on current period earnings but only on goodwill, and transactional recovery of the guarantee from Groupama pertaining to the EUR 240 million SOREMA acquisition, whose net negative impact on the First Quarter 2008 accounts of EUR 7 million is compensated by future investment returns.
Denis Kessler, Chairman and Chief Executive Officer of SCOR, comments: “The first three months of 2008 have confirmed the strength of the business platform created by SCOR. Even in a quarter of high natural catastrophe activity and financial market turmoil, SCOR can rely on its twin business engines of Life and Non-Life and its cautious investment practices. The agreements to resolve the pending litigation matters, especially the class action litigation in the United States, allow the Group to fully focus on integration, synergy creation and delivery in line with the strategic ‘Dynamic Lift’ plan”.
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