2nd UPDATE: Scor 4Q Net More Than Doubles; Raises Dividend

Reinsurer Scor SE (SCR.FR) said Wednesday that fourth-quarter net profit more than doubled, comfortably beating analyst forecasts, as lighter impairment charges amid stabler financial markets helped earnings.

The company, based in La Defense near central Paris, raised its dividend by 25% for the full year, but remained cautious about the prospects for 2010.

With governments' towering budget deficits, a risk of inflation returning and uncertainty about regulatory reform, "2010 is going to remain a difficult year for everyone," Chief Executive Officer Denis Kessler said. "We are confident we are going to go through 2010 in a safe way," he said.

The company will set medium-term goals when it announces a new three-year plan in July, Kessler said.

Scor is also taking a wary approach to dealmaking.

"We're not going to make acquisitions for the sake of growing," Chief Financial Officer Paolo De Martin said. Scor has had no contact, even informally, with the management of Natixis SA (KN.FR) over the French bank's credit insurance subsidiary Coface, De Martin said. French press reports had said Scor could bid for Coface.

A string of natural disasters, often costly for insurers and reinsurers, has marked the start of 2010.

The 8.8-magnitude earthquake that hit Chile on Saturday is "a serious event for the reinsurance industry," Kessler said. It is still too early to quantify how much the earthquake will cost reinsurers, he said.

The winter storm, named Xynthia that struck Western Europe last weekend isn't serious problem for Scor, Kessler said.

Xynthia caused damage across several countries, with France suffering the most severe destruction. Since floods did most of the harm in France, state-owned reinsurer CCR, which handles flooding claims, will shoulder the biggest burden, Kessler said.

Scor's net profit for the three months ended Dec. 31 increased to EU92 million from EUR35 million a year earlier, well above an average EUR49.7 million forecast from seven analysts polled by Dow Jones Newswires. The company booked an impairment charge of EUR50 million on its investments compared with EUR137 million a year earlier.

Revenue grew 0.9% to EUR1.5 billion from EUR1.48 billion a year earlier.

For the full year, net profit rose 18% to EUR370 million from EUR315 million in 2008, lifted by lower impairment charges as the company cut risks and financial markets returned to health.

Scor said it plans to pay a dividend of EUR1.00 a share for 2009, up from EUR0.80 a share for 2008. Shareholders will have the choice of receiving the dividend in cash or in the form of Scor shares, the company said.

The earnings were "markedly" above expectations, Nicolas Jacob, an analyst at Oddo Securities, said in a note to investors. Jacob, who has a buy rating on Scor shares, said both net profit and the dividend beat his forecasts.

At 1203 GMT, Scor shares were up EUR0.23, or 1.3%, at EUR18.48, slightly outperforming the Stoxx 600 Europe insurance index. Before Wednesday, the stock had climbed 4.3% since the start of the year, outshining a 1.3% decline in the Stoxx 600 Europe insurance index.

Rival reinsurers Munich Re AG (MUV2.XE) and Swiss Reinsurance Co. (RUKN.VX) both said last month that they plan to raise their dividends. Germany's Hannover Re AG (HNR1.XE) releases its 2009 earnings report March 11.

-By Jethro Mullen, Dow Jones Newswires; 33 1 4017 1738; jethro.mullen@dowjones.com

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