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2006 Annual Results*:
- Gross written premiums: EUR 2,935 million (+ 22% compared to 2005)**
- Non-Life gross written premiums: EUR 1,754 million (+27%)
- Life gross written premiums before taking into account pro rata Revios business*: EUR 1,040 million (+2%)
- Life gross written premiums after taking into account pro rata Revios business*: EUR 1,181 million (+15%)
- Operating income: EUR 409 million (+ 69%)
- Net income after tax before “badwill” linked to the acquisition of Revios: EUR 252 million (+ 92%)
- “Badwill” (the difference between the acquisition price of Revios and its corrected net book assets): EUR 54 million
- Net income after tax and “badwill” linked to the acquisition of Revios: EUR 306 million (+ 134%)
- Shareholders’ equity at 31 December 2006: EUR 2,253 million (+ 31%)
- Return on Weighted Average Equity (RoE) for 2006: 14.1% before “badwill” linked to the acquisition of Revios, 16.9% after “badwill” linked to the acquisition of Revios, compared to 8.6% in 2005
- Proposed dividend of EUR 0.8 per share, subject to approval by the General Shareholders’ Meeting, representing a dividend distribution rate before “badwill” linked to the acquisition of Revios of 37.5% (36.5%)
- Net income per new share: EUR 2.59 (+ 73%) before “badwill” linked to the acquisition of Revios and EUR 3.17 (+ 114%) after “badwill” linked to the acquisition of Revios
- Book value per new share: EUR 19.42 (+ 8%)
Results by line of business:
- Combined ratio for Non-Life reinsurance business of 96.4% (106.5%)
- Margin on net earned premiums for Life reinsurance: 7.5% before taking into account the pro rata Revios results* (8.2%), and 7.5% after taking into account the pro rata Revios results*, excluding Revios restructuring costs
- Investment income: EUR 498 million (+8%)
- Return on Investment (RoI): 4.6% in 2006 (4.3%)
Significant events:
- The Group had an excellent year in 2006. The Group’s 2006 annual results have exceeded EUR 300 million and the Return on Equity for the year has reached 16.9%. All of the Group’s business units have contributed to these results, thanks to their operational performance.
- The acquisition of Revios on 21 November 2006 for EUR 605 million and the creation of SCOR Global Life, 5th largest reinsurer in the world.
- The success of the EUR 350 million subordinated debt issue of 19 July 2006 and the success of the EUR 377 million capital increase of 12 December 2006 (subscription rate of 348%) as part of the acquisition of Revios.
Denis Kessler, Chairman and Chief Executive Officer, said: “The Group had an excellent year in 2006. The Group’s 2006 annual results have exceeded EUR 300 million and Return on Equity has reached 16.9%. All of the Group’s business units have contributed to these results, thanks to their operational performance. Non-Life reinsurance has seen a year marked by strong growth in underwriting (+27%) and a combined ratio of 96.4%, demonstrated both the quality of the underwriting involved and the mildness of the year in natural catastrophe terms. Life reinsurance has seen significant growth outside the United States of around 4%, but has decreased in the United States due to the late revision of our rating. Life reinsurance business shows a global increased profit on utilised capital, with the margin on net earned premiums reaching 7.5%. Finally, the acquisition of Revios – which took effect on 21 November 2006 – has resulted in “badwill” net of taxes in the sum of EUR 54 million.
The SCOR group, which has been refocused, restructured and reinvigorated, has fulfilled all of the objectives set in 2004 as part of the Moving Forward plan, in terms of both solvency and profitability. It has demonstrated the pertinence of its strategic choices, proved the depth of its business franchise, illustrated the importance it places on the active management of the risks it carries, strengthened the level of security it offers to its clients, controlled its costs and improved its operating performance.
The combination of SCOR and Converium rests on the conviction that such a project represents a unique strategic opportunity to create the fifth largest multi-line reinsurer in the world. This combination is based on very solid industrial, economic and financial foundations, working in the best interests of the shareholders, clients and employees of the two companies. This project will be pursued with determination and a spirit of openness. A new plan covering the period from mid 2007 to mid 2010, called “Dynamic Lift”, has been launched. This plan demonstrates the full commitment of SCOR’s management, supported by the Board of Directors, to create more shareholder value whilst strictly adhering to the prudent principles used in both Group underwriting and asset management”.
(*): these results take account of the acquisition of Revios on 21 November 2006, which is notably demonstrated by the following:
- Difference between the acquisition price of Revios and its corrected net book assets (“badwill”) of + EUR 54 million.
- Integration of the pro rata Revios results as of 21 November 2006
- Integration of the entire Revios balance sheet at 31 December 2006
(**): all comparisons in parentheses are to 2005
