Scor buys Sorema operations

International reinsurer Scor has purchased Groupama’s reinsurance business, Sorema S.A. and Sorema N.A., in a share transaction. The deal, which values the two subsidiaries at EUR 344 million, will make Groupama the largest shareholder in Scor, with a 17% stake.

For Scor Canada, the purchase will mean combining its operations with the Canadian branch of Sorema N.A., which currently works through the U.S. sister company, says Scor Canada CEO Henry Klecan Jr. He explains that the process of assuming Sorema’s Canadian operations will begin immediately. “We expect that by the end of the summer there will be a complete conversion to Scor of the Sorema portfolio.” No decisions on personnel matters have been made as yet.

Klecan says the timing of the deal is fitting given the hardening of the reinsurance market, which should allow Scor to grow the business overall. Groupama benefits as well by transferring control of their reinsurance business to a company focused on that market. “Groupama has decided its focus is on the primary side,” he says.

Scor chairman Jacques Blondeau says the purchase will boost the company’s solvency position (putting its solvency ratio at +10%) and equity (+15%). He also expects a reduction in the cost of certain covers including natural catastrophe and the development of new lines of business such as agricultural covers. The purchase will be submitted for approval later in June at a special Scor shareholders meeting, and does not include Lloyd’s syndicate Broadgate, Simcoe Bay Re of Bermuda or Rampart and Western Continental in the U.S.