Moody's upgrades SCOR from A1 to Aa3, with a stable outlook

Press Release

23 September 2016 - N° 22

Moody's upgrades SCOR from A1 to Aa3, with a stable outlook

Moody's Investors Service (Moody's) has today upgraded SCOR SE's insurance financial strength rating to Aa3 from A1, and its subordinated debt rating to A2(hyb) from A3(hyb). The outlook is stable. Moody's also upgraded the ratings of various SCOR SE subsidiaries.

This follows Moody's decision in December 2015 to raise SCOR's outlook to "positive" from "stable"^[1].

Moody's highlights that this upgrade reflects (i) SCOR's improved franchise, (ii) its diversified business profile and lower exposure than peers to the segments currently under the most pricing pressure, (iii) the high stability of its profits and (iv) its strong and stable capitalisation.

Over the course of SCOR's new strategic plan, "Vision in Action", Moody's expects SCOR to "continue to gradually strengthen the group's franchise and diversification without significantly increasing the group's risk profile". With regard to the Group's targets, Moody's comments that SCOR's "targeted level of profitability (800 bps over the risk-free rate) and of capital (Solvency II ratio in the 185%-220% range) will contribute to maintain an overall credit profile commensurate with a Aa3 insurance financial strength rating".

In terms of franchise, Moody's believes that "SCOR is one of the reinsurers which has and will benefit the most from the structural changes in ceding companies' behaviour". Moody's also values SCOR's diversified business model which "positively differentiates it from A1 reinsurers and is also a key strength of the group's credit profile". The rating agency stresses that "this diversification, together with a relatively lower exposure to the most volatile reinsurance segments (e.g., natural catastrophes) than peers, translates into a high level of stability in earnings".

Regarding the current environment, Moody's expects "the impact of pricing pressures on SCOR's profits to remain moderate, thanks to relatively low exposure to the segments under most pricing pressure currently and a high weight of proportional reinsurance and of primary insurance businesses".

Denis Kessler, Chairman and CEO of SCOR, comments: "This decision highlights the relevance of SCOR's strategy and business model. The reasons given by Moody's for this upgrade are fully consistent with the profitability and solvency targets of SCOR's new strategic plan "Vision in Action", launched on 7 September 2016".

Moody's press release is available on the agency's homepage at the following address: 
https://www.moodys.com/

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Contact details

Marie-Laurence Bouchon
Group Head of Communications
+33 (0)1 58 44 76 10
mbouchon@scor.com

Bertrand Bougon
Head of Investor Relations
& Rating Agencies
+33 (0)1 58 44 71 68
bbougon@scor.com

http://www.scor.com/

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Forward-looking statements

SCOR does not communicate "profit forecasts" in the sense of Article 2 of (EC) Regulation n°809/2004 of the European Commission. Thus, any forward-.looking statements contained in this communication should not be held as corresponding to such profit forecasts. Information in this communication may include "forward-looking statements", including but not limited to statements that are predictions of or indicate future events, trends, plans or objectives, based on certain assumptions and include any statement which does not directly relate to a historical fact or current fact. Forward-looking statements are typically identified by words or phrases such as, without limitation, "anticipate", "assume", "believe", "continue", "estimate", "expect", "foresee", "intend", "may increase" and "may fluctuate" and similar expressions or by future or conditional verbs such as, without limitations, "will", "should", "would" and "could." Undue reliance should not be placed on such statements, because, by their nature, they are subject to known and unknown risks, uncertainties and other factors, which may cause actual results, on the one hand, to differ from any results expressed or implied by the present communication, on the other hand.
Please refer to the 2015 reference document filed on 4 March 2016 under number D.16-0108 with the French Autorité des marchés financiers (AMF) posted on SCOR's website www.scor.com (the "Document de Référence"), for a description of certain important factors, risks and uncertainties that may affect the business of the SCOR Group. As a result of the extreme and unprecedented volatility and disruption of the current global financial crisis, SCOR is exposed to significant financial, capital market and other risks, including movements in interest rates, credit spreads, equity prices, and currency movements, changes in rating agency policies or practices, and the lowering or loss of financial strength or other ratings.
The Group's financial information is prepared on the basis of IFRS and interpretations issued and approved by the European Union. This financial information does not constitute a set of financial statements for an interim period as defined by IAS 34 "Interim Financial Reporting".The Group's financial information is prepared on the basis of IFRS and interpretations issued and approved by the European Union. This financial information does not constitute a set of financial statements for an interim period as defined by IAS 34 "Interim Financial Reporting".