PARIS, Nov 10 (Reuters) - Scor <SCOR.PA> shares jumped on Wednesday after influential debt rating agency Standard & Poor's lifted its outlook on the French reinsurer to "positive" -- raising hopes a rating upgrade badly needed to do business.
Scor is battling to return to an "A"-level financial strength rating to keep clients and win new ones who want proof of their reinsurer's long-term solidity. It needs this rating by January when it must renegotiate client contracts.
Scor stock rose 6.1 percent to 1.40 euros by 0858 GMT. CA Cheuvreux also upgraded Scor to "outperform" from "underperform."
"It's very positive," said an analyst who follows the insurance industry. "I assume Standard & Poor's will wait for the fourth quarter but Scor survived the third quarter pretty well, which was one of the worst quarters for catastrophes."
"If the fourth quarter is good I would expect somewhere at the beginning of January Scor would have its rating upgrade, which would give credibility to its recovery," the analyst said.
Standard & Poor's, which cut Scor's "A-" rating in July 2003, said on Tuesday it raised its outlook on Scor to positive from stable and affirmed its 'BBB+' long-term counterparty credit and insurer financial strength ratings on the reinsurer.
The positive outlook reflected Standard & Poor's belief that within a two-year rating horizon Scor's management would show it had the skills to generate consistent undewriting profits throughout the underwriting cycle, Standard & Poor's said.
Standard & Poor's also said Scor's capital would be sufficient to move into the 'A' range.
Scor on Nov. 4 posted a nine month profit versus a year ago loss as more careful underwriting, fewer reserves and cost cuts offset American and Asian storm claims.
Over the past two years the reinsurer, which assumes insurers' risks, has ditched riskier policies and raised capital to strengthen its books and return to an 'A' level rating.
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