French reinsurer’s financial strength rating boosted to A

Rating agency AM Best has upgraded French reinsurer SCOR’s financial strength rating to A from A- and revised the outlook to stable from positive.

The upgrade reflects the continuing resilience of SCOR’s risk-adjusted capitalisation, consistent operating performance and quality of its enterprise risk management, the rating agency said.

AM Best said SCOR’s risk-adjusted capitalisation had improved beyond its expectations and praised its even balance between life and non-life business and relatively low investment risk exposure. The agency does not expect SCOR’s balance sheet strength to be affected by its expansion initiatives in new markets and lines of business.

In 2010, AM Best expects SCOR’s underwriting performance to remain positive despite the effect of first-half natural catastrophes on its non-life result, with a projected combined ratio marginally below 100%. It also expects the technical result for SCOR’s life business to benefit from a more favourable investment environment.

As a result, AM Best estimates that SCOR’s pre-tax earnings for 2010 will be above the €324m it made in 2009, depending on catastrophe experience for the rest of the year.