SCOR BUYS EX GERLING GLOBAL RE LIFE REINSURANCE DIVISION

French reinsurer Scor is to buy Cologne-based Revios, once the life reinsurance division of Gerling Global Re, for 605m euro. The new division will be called Scor Global Life and, Scor said, would be the fourth-largest life reinsurer in the world. The company anticipates annual premium volume of about 2.25bn euro. It will offer services in 80 countries via offices in 19 countries. The three main business units will be in Paris, Cologne and the US. The purchase will be retroactive to January 1, 2006 and a positive impact on earnings per share is expected from next year. Cost savings of 12m euro a year are expected from 2008 on. To fund the acquisition, Scor will offer a rights issue of 300m euro and will undertake a subordinated debt issue of 350m euro. The move will shift Scor further from its mainly non-life past, with its portfolio becoming 60% life reinsurance and 40% non-life reinsurance. Revios has developed autonomously from Gerling Global Re since 2002. Last year it underwrote premium volume of 1.24bn euro in 42 countries, compared with Scor’s life and non-life combined premiums of 2.41bn euro. Revios has 277 staff. Scor said that the synergies, which will lower the cost ratio by one percentage point, would be generated by “consolidation in those countries where Scor Vie and Revios both have offices, the combination of IT systems and optimised retrocession costs”.