4.4 Legal risk - Scor

12 TREND INFORMATION
12.1 Most significant trends in production, sales,
inventory, costs, and selling prices since the end of
the last financial year
12.1.1 NON-LIFE
SCOR Global P&C announced on the 7 February 2013, that during the January 2013 renewals it recorded a 9% increase in
gross written premiums (to EUR 2.507 billion) with an expected 1.3% improvement in technical profitability for total contracts
renewed and a price rise of 1.9% net of general inflation.
SCOR Global P&C continued to strengthen its competitive position during these renewals, both with its existing clients and
with new cedants. The rating upgrades to “A+” which happened in the course of 2012 recognised this business franchise
and its constant reinforcement, as well as provided a catalyst for new opportunities that strengthen SCOR Global P&C’s
position at the very forefront of the reinsurance industry.
These renewals constituted one of the final steps before the conclusion of the strategic plan “Strong Momentum v1.1”, and
satisfied its profitability objectives and premium income growth assumptions. They confirmed the evolution of premium
income, which is trending towards the EUR 5 billion level.
EUR 2.3 billion of premiums were up for renewal in January 2013, i.e. around half of SCOR Global P&C’s premiums. This
proportion was particularly significant for Non-Life treaty business (71%), and represented more than half of specialty treaty
business (55%).
During these renewals, SCOR Global P&C continued to improve the expected technical performance of its business thanks
to the active management of its portfolio. Its position as one of the leaders on a number of segments, along with the longterm
relationships it has established with cedants, enabled it to negotiate satisfactory pricing conditions that were higher
than those recorded by the rest of the market. Price increases in the Americas notably reached 5.1 %, with P&C prices
increasing overall by 1.5% and 3.0% respectively for proportional and non-proportional contracts.
Treaty P&C renewals
The total volume of premiums renewed at 1 January 2013 increased by 9% to EUR 1,890 million, of which 6 points related
to a quota share treaty for an Asian cedant. SCOR Global P&C’s ability to seize this opportunity bore witness its benchmark
role in this region of the world. Moreover, the emerging countries recorded particularly strong growth overall (+48% in Asia,
+16% in Latin America, and +12% in Africa & the Middle East). This growth accompanied active portfolio management:
more than 8% of business was cancelled and restructured, while new clients represented three additional growth points.
This growth took place in favourable pricing conditions, which were up by more than 2%.
Specialty Treaty
Gross written premiums increased by 9% to EUR 617, driven by a good performance in the Marine branch (+11 %). This
branch benefited from a significant improvement in pricing conditions (notably +14.5% for non-proportional contracts, of
which the portfolio share increased), following a year marked by exceptional losses in 2012. The year opened with the
shipwreck of the Costa Concordia, and closed on Hurricane Sandy, which had a considerable impact on the Marine branch.
Moreover, prices for specialty treaties rose by more than 1% overall, showing strong resilience in branches sensitive to the
economic cycle such as credit reinsurance and construction reinsurance, where rates remained stable (+0.7% and +0.4%
respectively). Moreover, while conditions remained difficult for the Aviation reinsurance market, SCOR Global P&C
managed to maintain stable price levels and premium volume.
12.1.2 LIFE
The life reinsurance market is characterized by long-term contractual relationship, which is the case for the majority of
SCOR Global Life reinsurance portfolios. Only in selected markets like in Spain and Italy for certain products such as Health
and Group Life reinsurance, the life reinsurance industry follows the practice of annual renewals.
SCOR Global Life continues to offer traditional life and health reinsurance products in all markets based on proportional risk
sharing models applying SCOR’s pricing assumptions to meet the company’s capital and margin targets.
Over all markets SCOR Global Life negotiates with its business partner on sophisticated business solution transactions with
different motivations such as portfolio risk diversification.
The majority of SCOR Global Life’s portfolio consists of pure death cover, exposed to mortality risk.
Moreover, SCOR Global Life does not currently underwrite variable annuities and exposure to unemployment risk is
minimal. Consequently, SCOR’s Life portfolio is largely immunized against the effects of economic slowdown.
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