4.4 Legal risk - Scor

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2009 In EUR million (1) Provisional Assets 2010 Adjustment 2010 Final VOBA 20 17 37 Investments 35 - 35 Share of retrocessionaires in contract liabilities 7 - 7 Other assets 10 - 10 Cash and cash equivalents 6 - 6 TOTAL ASSETS 78 17 95 Liabilities Contract liabilities 27 5 32 Other liabilities 6 12 18 TOTAL LIABILITIES 33 17 50 Fair value of net assets 45 - 45 Consideration (31) - (31) Gain from bargain purchase 14 - 14 (1) Based on EUR/USD exchange rate at the date of acquisition Value of business acquired The value of business acquired (“VOBA”) for the acquisition of XL Life America Inc. has been estimated as EUR 37 million based on an estimate of expected future income and using a discount rate including an appropriate risk premium. This intangible asset is amortized over the lifetime of the underlying treaties, in line with expected emergence of income. 20.1.6.4 NOTE 4 – INTANGIBLE ASSETS In EUR million Goodwill Value of business acquired Other Total Gross value at 31 December 2010 969 867 169 2,005 Foreign exchange rate movements - 54 1 55 Additions - - 24 24 Disposals - - - - Change in scope of consolidation - 540 - 540 Gross value at 31 December 2011 969 1,461 194 2,624 Foreign exchange rate movements - 2 2 4 Additions - - 30 30 Disposals - - (16) (16) Change in scope of consolidation - - - - Gross value at 31 December 2012 969 1,463 210 2,642 Cumulative amortization and impairment at 31 December 2010 (181) (346) (74) (601) Amortization for the period - (47) (8) (55) Impairment for the period - - - - “Shadow accounting” - 1 - 1 Cumulative amortization and impairment at 31 December 2011 (181) (392) (82) (655) Amortization for the period - (42) 9 (1) (33) Impairment for the period - - (15) (15) “Shadow accounting” - 2 - 2 Cumulative amortization and impairment at 31 December 2012 (181) (432) (88) (701) Carrying value as at 31 December 2010 788 521 95 1,404 Carrying value as at 31 December 2011 788 1,069 112 1,969 Carrying value as at 31 December 2012 788 1,031 122 1,941 (1) Including EUR 16 million reversal of amortization due to intangible assets disposals. The disclosure of intangible assets split between the Group’s operational segments SCOR Global P&C and SCOR Global Life has been presented within Note 2 – Segment Information. 222
GOODWILL Goodwill, which represents the excess of the cost of each business combination over SCOR’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired, was EUR 788 million as at 31 December 2012 and EUR 788 million as at 31 December 2011. The net book value of goodwill allocated to SCOR Global P&C and SCOR Global Life is disclosed in Note 2 – Segment information. For the purposes of impairment testing, goodwill acquired in a business combination is allocated by SCOR to the groups of cash generating units (CGUs) that are expected to benefit from the profitability and synergies of the business combination. SCOR groups its CGUs by its operating segments, SCOR Global P&C and SCOR Global Life. This is consistent with the way that SCOR manages and monitors its business and cash flows. In order to estimate the fair value of SCOR Global P&C for the purpose of impairment testing, SCOR uses a discounted cash flow model comprised of an earnings model, which considers forecasted earnings and other financial ratios of the reportable segment over a five year period. The first three years are based on Board approved business plans and the last two are extrapolated using an approach based on past experience. Business plans include assessments of gross and net premium expectations, expected loss ratios and expected expense ratios together with actuarial assumptions such as the coefficient of variation on ultimate net reserves together with assumptions as to the mean time to payment of existing reserves and future business. Cash-flows beyond this period are extrapolated using a growth rate of 5%. SCOR uses risk free interest rates per currency and the estimated SCOR Group cost of capital 7.92% as derived from the Capital Asset Pricing Model (CAPM) for discounting purposes. For SCOR Global Life, goodwill is tested for impairment with reference to the inputs and methodology that SCOR applies in calculating the embedded value of the segment. Market Consistent Embedded Value (MCEV) is a measure of the consolidated value of shareholders’ interests in the covered business. The MCEV represents the present value of shareholders’ interests in the earnings distributable from assets allocated to the covered business after sufficient allowance for the aggregate risks in the covered business. The allowance for risk is calibrated to match the market price for risk where reliably observable. The MCEV consists of the Shareholder Net Worth (market value basis of equity), and value of in-force covered business (VIF). The VIF is composed of Present Value of Future Profits, projected over the life of the portfolio and based on contractual cash-flows. Key assumptions are morbidity, mortality and lapse rates. Mortality/morbidity are based on external tables, adjusted based on internal past experience. Lapses are also based on internal past experience. SCOR calculates and publishes a Market Consistent Embedded Value in line with the principles of the CFO Forum. For the 2012 embedded value discount rates used were based on risk free swap rates ranging between 0.29% and 8.15% depending on the currency and the duration. Management believes that any reasonably possible change in the key assumptions on which SCOR Global P&C and SCOR Global Life recoverable amounts are based would not cause their carrying amount to exceed their recoverable amount. As part of the impairment testing, SCOR assesses whether the recoverable amount of operating units is at least equal to the total carrying value of operating units (including goodwill). If it is determined that an impairment exists, the total carrying value is adjusted to current fair value. Any impairment charge is recorded in income in the period in which it is determined. The annual goodwill impairment tests conducted for both SCOR Global P&C and SCOR Global Life segments show a fair value in excess of the total carrying value. Consequently, the result of the goodwill impairment tests is that no goodwill impairment charges were recognized for the years ended 31 December 2012, 2011 and 2010 respectively. VALUE OF BUSINESS ACQUIRED The IFRS 4 liability adequacy testing which includes VOBA recoverability, showed no indicators of impairment for the years ended 31 December 2012 or 2011. OTHER INTANGIBLE ASSETS Other intangible assets at 31 December 2012 were EUR 122 million compared with EUR 112 million at 31 December 2011. Other intangible assets with finite useful lives at 31 December 2012 were EUR 92 million compared with EUR 82 million at 31 December 2011. A component of this balance relates to the joint-venture agreement with the Medical Defense Union (MDU), acquired through the Converium business combination. During and subsequent to the financial year end, SCOR received indications that this agreement would be terminated. As a result management decided to impair the intangible to its recoverable value of EUR 6 million. The Group amortizes its other intangibles with a finite life over a 2 to 10 year period dependent on the specific circumstances of each arrangement. The additions during the year ended 31 December 2012 of EUR 30 million comprise mainly software development cost capitalized relating to the Group’s general ledger, technical accounting system and internal model of the Group. 223
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NOTICE Certain statements contained
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1 Person responsible 8 1.1 Name and
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13 Profit forecasts or estimates 11
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8 PERSON RESPONSIBLE
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1 PERSON RESPONSIBLE 1.1 Name and t
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2.1 Auditors 13 2.2 Resignation or
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14 SELECTED FINANCIAL INFORMATION
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3 GROUP KEY FIGURES (UNDER CURRENT
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4.1 Risk related to the business en
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claims or surrenders of policies th
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B. Life reinsurance The main catego
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statutory reserve requirements or h
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B. SCOR is exposed to Guaranteed Mi
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4.1.9 FINANCIAL RATINGS PLAY AN IMP
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and amortization expenses related t
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F. Deposits with custodians As part
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4.2.2 SCOR FACES RISKS RELATED TO I
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Details of intangible assets, relat
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4.4.2 INCONSISTENT APPLICATION OF E
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See “Appendix B - II. Internal co
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5.1 History and development of the
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proportion of the voting rights hel
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Gerling Global Re Group, which deve
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5.2 Investments 5.2.1 PRINCIPAL INV
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6.1 Primary activities 53 6.2 Princ
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The targets of the strategic plan a
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B. Proportional and non-proportiona
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payment of commercial debts. Surety
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Long-Term Care Long-Term Care (“L
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with local lines of business and po
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transfer solutions (e.g., catastrop
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Retrocession procedures are central
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The portion invested in fixed incom
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6.2 Principal markets SCOR is chara
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On 6 March 2010, STOXX announced SC
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The premiums up for renewal, which
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75 ORGANIZATIONAL STRUCTURE
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E U R O P E 7 ORGANIZATIONAL STRUCT
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7.1.1.2 Project "New SCOR" In conne
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7.2 List of issuer’s significant
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8.1 Major existing or planned prope
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86 OPERATING AND FINANCIAL REVIEW
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9 OPERATING AND FINANCIAL REVIEW Th
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year ended 31 December 2012 down fr
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In 2011, SCOR was affected by the f
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31 March 2014. This transaction suc
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Net investment income and investmen
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IFRS classification In EUR million
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Combined ratio For detailed calcula
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10.1 Capital 103 10.2 Cash flow 103
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FINANCIAL LEVERAGE As at 31 Decembe
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11.1 Research and development activ
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studies and publications produced o
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12.1 Most significant trends in pro
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SCOR Global Life expects business o
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114 PROFIT FORECASTS OR ESTIMATES
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116 ADMINISTRATIVE AND MANAGEMENT B
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14 ADMINISTRATIVE AND MANAGEMENT BO
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Name Date of Birth Other principal
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Clariden Leu and from 10 January 20
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Name Age Current Position Executive
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of Alea Europe from 1999 to 2006, w
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134 REMUNERATION AND BENEFITS
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15 REMUNERATION AND BENEFITS 15.1 A
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and analysts; deepening of the empl
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Subscription and share purchase opt
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Year 2011 Year 2010 Premium/ Gross
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144 BOARD PRATICES
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16 BOARD PRATICES 16.1 Date of expi
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148 EMPLOYEES
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17 EMPLOYEES 17.1 Number of employe
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17.2.2 STOCK OPTIONS HELD BY THE ME
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Options exercised Number of stock o
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Plan Share award rights Price per s
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180 of the Commercial Code, options
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(5) Absolute appliance of Group’s
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The following table shows the free
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Shareholders meeting and Company's
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and, for the not tax resident of Fr
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17.4.2 DEFINED BENEFITS PENSION SCH
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18.1 Significant shareholders known
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Page 174 and 175: On 4 July 2012, Alecta Pensionsför
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Page 178 and 179: Amendment #7 to the retrocession ag
Page 180 and 181: The Board of Directors of SCOR SE,
Page 182 and 183: absorption of its wholly owned subs
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Page 186 and 187: adjusted on the date of departure b
Page 188 and 189: 188 FINANCIAL INFORMATION CONCERNIN
Page 190 and 191: 20 FINANCIAL INFORMATION CONCERNING
Page 192 and 193: LIABILITIES AS AT 31 DECEMBER In EU
Page 194 and 195: 20.1.3 CONSOLIDATED STATEMENTS OF C
Page 196 and 197: 20.1.5 CONSOLIDATED STATEMENTS OF C
Page 198 and 199: 20.1.6 NOTES TO THE CONSOLIDATED FI
Page 200 and 201: • Amendments to IAS 19 - Employee
Page 202 and 203: Intangible assets The cost of intan
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Page 208 and 209: available and the reserves are adju
Page 210 and 211: Shadow accounting For the measureme
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Page 214 and 215: The following table sets forth the
Page 216 and 217: CASH FLOWS BY SEGMENT The cash flow
Page 218 and 219: SCOR recognised the redemption rece
Page 220 and 221: PRO FORMA STATEMENT OF INCOME 2011
Page 224 and 225: The Group conducted its annual asse
Page 226 and 227: 20.1.6.6 NOTE 6 - INSURANCE BUSINES
Page 228 and 229: (B) MOVEMENTS IN LEVEL 3 FINANCIAL
Page 230 and 231: Financial lease contracts The Group
Page 232 and 233: At 31 December 2012 and 2011, the u
Page 234 and 235: MORTALITY SWAPS On 1 January 2008,
Page 236 and 237: 20.1.6.10 NOTE 10 - ASSUMED AND CED
Page 238 and 239: Issued share capital The number of
Page 240 and 241: CAPITAL MANAGEMENT POLICY, OBJECTIV
Page 242 and 243: Share-based payments The caption
Page 244 and 245: SCOR has entered into a cross-curre
Page 246 and 247: SCOR Global P&C The table below sho
Page 248 and 249: The table below is a reconciliation
Page 250 and 251: (C) SHARE OF RETROCESSIONAIRES IN C
Page 252 and 253: (c) Defined benefits pension cost 2
Page 254 and 255: The following table summarizes the
Page 256 and 257: The table below presents the change
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and documented before the pricing i
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(iv) Pandemic In Life reinsurance,
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Different types of GMDBs are covere
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(b) Receivables from retrocessionai
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(i) Default of pool members SCOR pa
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Additional information on the timin
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On the other hand, an increase in i
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The market sensitivities of the Gro
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20.2 Auditing of historical consoli
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Other information audited by the le
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21.1 Share capital 293 21.2 Charter
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Directors of SCOR SE decided on 28
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Number initially authorized (date o
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Objective 1. Stimulation of the sec
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21.1.7 HISTORY OF THE COMPANY’S S
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Board of Directors’ borrowing pow
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maintained by BNP on our behalf. Ea
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Proxies may be granted by a shareho
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Shareholders’ Meeting that may ta
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22 MATERIAL CONTRACTS None. 310
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23.1 Expert’s report 313 23.2 Inf
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314 DOCUMENTS ON DISPLAY
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316 INFORMATION ON HOLDINGS
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318 NON FINANCIAL INFORMATION
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320 FEES PAID BY THE GROUP TO THE A
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322 PUBLISHED INFORMATION
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28 PUBLISHED INFORMATION 28.1 Infor
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Date Subject Marchés Financiers 27
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328
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1.1 Significant events of the year
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1.2 Balance sheet 1.2.1 BALANCE SHE
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1.3 Income statement In EUR million
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In EUR million NON-UNDERWRITING ACC
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1.5 NOTES TO THE CORPORATE FINANCIA
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1.7 RECORDING OF REINSURANCE TRANSA
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1.12 FINANCIAL INSTRUMENTS RECEIVED
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Name Original currency Share capita
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NOTE 4 - TRANSACTIONS WITH SUBSIDIA
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(b) Financial liabilities • Initi
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• EUR 44 million in reserves for
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NOTE 10 - ANALYSIS OF GENERAL EXPEN
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Number of which to Group directors
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NOTE 15 - ANALYSIS OF COMMITMENTS G
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Appeal of Versailles. On the basis
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aforementioned notes is appropriate
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362 APPENDIX B: REPORT OF THE CHAIR
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APPENDIX B: REPORT OF THE CHAIRMAN
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Pursuant to the Internal Charter, t
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Lastly, Directors are required to i
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The Audit Committee is composed of
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Every year, the conditions of remun
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Moreover, the Chairman and Chief Ex
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The Group SCOR consists of the pare
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Within this environment, control re
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organization, training sessions tar
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For SCOR Global Life: - an internal
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(D) INFORMATION AND COMMUNICATION
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• enhanced audit trail. The initi
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Other information We confirm that t
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APPENDIX C: GLOSSARY* *This glossar
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D DECENNIAL INSURANCE Decennial ins
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M MARINE AND AVIATION INSURANCE ALS
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RETROCESSION Transaction in which t
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elevant at the date of acquisition.
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1 Operating and financial review of
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1.2 Operating results of SCOR SE du
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3.2 Group social indicators 3.2.1 D
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As a global company organised into
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3.2.10 Distribution by age Indicato
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in cooperation with the company doc
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- The items pertain to the entire G
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• Two approaches have been develo
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POLLUTION AND WASTE MANAGEMENT Info
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BIODIVERSITY PROTECTION formation r
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The Group’s French subsidiaries a
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5.5 OTHER ACTIONS TAKEN IN SUPPORT
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7 STATUTORY AUDITORS’REPORT ON TH
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426 APPENDIX E: CROSS REFERENCE TAB
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European Company With a share capit
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