French reinsurer SCOR this week announced net income of nearly $46 million for the first half of the year but expressed disappointment in its volume of business claiming its results were negatively impacted by the troubles of its Bermuda subsidiary Commercial Risk Partners.

In its earnings report released on Wednesday, Paris-based SCOR - reputed to be the eighth largest reinsurer in the world - said its results for the first half of the year showed an 18 percent decline over the same period last year, a development it attributed "in large part due to the cessation of underwriting activity in the Bermudian subsidiary CRP".

In total, the company said its business had fallen from 2.5 billion euros ($2.72 billion) in gross premiums written in the first six months of 2002 to 2 billion euros ($2.17 billion) during the same period this year.

SCOR chairman Denis Kessler reportedly told company directors on Tuesday that CRP's results had clouded what could have been a bright period of performance for SCOR.

"This revenue decrease is explained mainly by CPR, the group's Bermuda-based alternative risk transfer subsidiary, which ceased writing business in January 2003.

"Excluding CRP, gross written premiums for the first half of 2003, at constant exchange rates, would have been down just two percent as compared to the first half of 2002," he said.

SCOR announced its intent to sell off Bermuda-based CRP in late January, but so far no deal has been inked and the French reinsurance giant earlier this year cast doubt on whether it would be successful in finding a buyer, at least at a good price, for the alternative risk unit.

And this week Mr. Kessler announced that at least part of CRP's business could be taken off SCOR's books through a commutation agreement.

Mr. Kessler told the SCOR board that the company continued to try and find a buyer for CRP "which is now in the midst of both a commutation programme as well as negotiations for its sale," he said.

A commutation agreement could effectively terminate any obligation from SCOR on certain reinsurance contracts held by CRP and would most likely include a final cash settlement.

In May, Mr. Kessler had said SCOR was close to closing on a sale for its Bermuda company but in the end the deal fell through. At that time, the company reported that CRP's losses during the first quarter had widened to 21 million euros compared to a 9 million euro loss in the same quarter of 2001. SCOR said the poor result could put a sale of the business in jeopardy, adding that CRP's loss was "bad news" because it would cut the potential sale price for the unit. SCOR's decision to discontinue writing business through CRP came after what it called a long review process. In tandem with that decision, the company reduced overall exposure to US-based business and some analysts have speculated that the company wished to get back to its French roots. Former CRP head and Bermuda market insurance veteran Graham Pewter resigned from the helm of Commercial Risk Partners Limited in January after SCOR said the unit was "non-strategic" and would be put up for sale.

Mr. Pewter, with more than 20 years of experience in the local insurance market, was then hired to head new start-up Catlin Insurance Company Ltd.