Fitch has upgraded the financial strength rating of Paris-based reinsurer Scor to A+ from A, with a stable outlook, on “strong solvency and moderate debt,” as well as significant business and risk diversification.
The rating agency said on Thursday the French group had improved its capital adequacy over the past three years “as a result of well-controlled underwriting practices and a cautious investment policy.”
Fitch also mentioned Scor’s ability to conduct external growth and “swiftly integrate acquired operations.”
”As a consequence, business position and diversification have significantly improved over the past five years,” Fitch wrote in a press release. “In addition, prices paid for acquisitions have usually been conservative, resulting in a manageable amount of intangible assets on the group’s balance sheet.”
However, the agency also noted the reinsurer’s profitability had been under pressure in recent years, particularly in non-life, as a result of significant natural catastrophes.
Fitch added it expected Scor to “promptly adjust policies terms and conditions in order to restore profitability,” and pointed out the company’s intention to cut costs had “yet to deliver its full benefit.”
Fitch said a further rating upgrade was unlikely in the near future, but could be “triggered by a material and sustainable recovery of profitability, especially in the non-life segment.”