Earnings fell at Scottish Re Group Ltd. in the first quarter, but the company says a securitization deal and a special-purpose vehicle transaction should put it in a position to grow.
Scottish Re, Hamilton, Bermuda, is reporting $14 million in net income for the latest quarter on $578 million in revenue, compared with $33 million in net income on $557 million in revenue for the first quarter of 2005.
Late reporting of about $7 million in claims and a flurry of 10 large life claims hurt operating results, Scottish Re says.
Usually, Scottish Re receives only 1 large life claim per month, the company says.
But Scottish Re says it has financed its responsibility for a block of 1.7 million policies acquired from a unit of ING Groep N.V., Amsterdam, by selling $2.1 billion in 30-year notes and subordinated notes to investors.
Scottish Re made the deal because new state laws and regulations based on the Regulation XXX model have increased reserve requirements for level-premium term life insurance policies.
The securitization deal is the third Scottish Re has completed, Scottish Re says.