Fitch Ratings has today affirmed SCOR’s Long-term Issuer Default Ratings (IDRs) and Insurer Financial Strength (IFS) ratings at ‘A’, respectively. Fitch has simultaneously affirmed SCOR’s junior subordinated debt at ‘BBB+’, whilst affirming its Short-term IDR and commercial paper at ‘F1’, respectively. The Outlook on the IDR and IFS remains Positive. A full rating breakdown is provided at the end of this comment.
The affirmations follow SCOR’s announcement that it intends to acquire the mortality business of Transamerica for a cash consideration of USD912.5m. The transaction is expected to close in Q311. Fitch believes the announced transaction would significantly strengthen the SCOR group business position in the US life reinsurance market, by far the largest of its kind on a global basis, where its existing presence is modest. In addition, Fitch considers capital adequacy would not be materially affected by the transaction, although SCOR’s debt leverage will increase from its current low level while remaining in line with the agency’s expectations for the current rating.
Key rating drivers that could lead to an upgrade of SCOR include increased profitability in both the life and non-life reinsurance segments and the successful integration of the acquired operations. Conversely, deterioration in capital adequacy, profitability or the emergence of execution risks in the integration of the mortality business of Transamerica could possibly result in a revision of the Positive Outlook, or a downgrade.
Source : Fitch Press Release