4.4 Legal risk - Scor

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organization, training sessions targeted for underwriters, claims and accounting staff were also held during 2012 in all Hubs and other locations. Setting of objectives SCOR has implemented and formalized for several years 3 year strategic plans. The strategic plan, “Strong Momentum” (SMV1.0) covering the years 2010 to 2013 was approved by the Board in July 2010. It has been updated and publicly presented on the 7 September 2011 following the acquisition of Transamerica Re and the sale of our U.S. equity indexed annuity business. The updated strategic plan reaffirms the three objectives set out in the initial version of the plan SMV1.0, i.e.: the optimization of the Group’s risk profile, a “AA” level of financial security and a profitability target of 1,000 basis points above the risk free-rate over the cycle. “For the new initiatives set in the initial plan, SCOR has reinforced its ERM through the development of specific indicators reported on a quarterly basis to the Group Risk Committee and the Board Risk Committee of the Company in order to enable them to benefit from an overall overview of the development of these initiatives. As mentioned here before, the COMEX defines the procedures for implementing the strategy and reviews the consistency of the operational plans or policies (e.g. underwriting, finance, retrocession, information technology) with the strategic plan. The COMEX also ensures that there is an optimal risk-based allocation of capital and diversification. Under the responsibility of the Group Chief Risk Officer, the Capital Shield Strategy sets risk limits to ensure a protection of the Group’s capital in line with the strategic plan’s objectives. The Capital Shield Strategy is approved and monitored by the Group Risk Committee and the Board Risk Committee. The clarity and precision of strategic objectives and their implementation within the Group ease the identification, evaluation and control of risks, whatever their nature (e.g. underwriting risk, market risk, and operational risk), possibly caused by these objectives. (B) IDENTIFICATION AND ASSESSMENT OF RISKS Several processes for identifying and assessing risks have been implemented to approach risk from different angles and to deal with them in an exhaustive manner. These include: • A risk information process : every quarter, the Group Risk Committee reviews the "Group Risk Dashboard" which describes and assesses the major risks the Group is exposed to. This report assembles various risk assessments from different identification and assessment processes for all risk categories. • A Risk Enquiry process: the methodology of this process is based on interviews carried out by members of the risk functions at divisional and hub levels with senior management and subject matter experts. The risks identified during the interviews are described, assessed and assigned to risk owners. In addition, existing and planned actions mitigating the risks are documented. The Risk Enquiry can take on various forms depending on local specificities. • An Emerging Risks process: emerging risks are subject to a specific process of identification and analysis. A dedicated collaborative site has been created on the Group’s intranet allowing designated observers, who are experts in their field, to collate market information, articles or studies on topics that might constitute emerging risks. In addition, a special email address allows all Group employees to submit information. This information is processed by a Committee administered by the Group Risk Management Department and composed of members of the risk management function in the Division (SCOR Global P&C, SCOR Global Life, SCOR Global Investments) and of the Group actuarial function, Group Legal Department and Group Competitive Intelligence unit which is hosted by the Information Systems Department. • An Extreme Scenarios process: this process aims to review and assess the potential impact of selected extreme scenarios. Subject specific working groups constituted of experts across the Group, coordinated by the Group Risk Management Department with the support of the divisional chief risk officer of SCOR Global P&C and SCOR Global Life, then perform quantitative studies which are summarized in specific reports. The Group Chief Risk Officer presents any major scenario, if any, which exceeds the Group’s risk tolerance to the Group Risk Committee and to the Board Risk Committee of the Company. (C) PRINCIPAL ACTIVITIES AND PARTICIPANTS OF RISK CONTROL Because of its activities, SCOR SE is exposed to many risks: reinsurance related risks, market risks and other risks (e.g. liquidity, rating). These risks are detailed in the part 4 – Risk Factors of the Registration Document. This report does not detail these risks, but aims at summarizing the principal activities and participants of Risk Control for the following important areas. • activities related to reinsurance, • asset management, • accounting management, • Central functions. 380
The control activities described below are considered as the principal activities for controlling risks specific to those areas. In accordance with SCOR’s internal control concept, these control activities are performed on group or company level, on core business and investment process level, or on supporting process level. The formalization is being revised in accordance with the new Group standards. i) Activities related to reinsurance SCOR uses an internal model for determining economic capital managed by the Group Financial Analysis & Risk Modeling Department of the Group Risk Control Department, necessary to implement its underwriting and asset management policies and guidelines. Economic capital is allocated to SCOR Global P&C, SCOR Global Life and to the asset management, and constitutes the reference for deciding and verifying the profitability expected from each of them; The operating and control procedures concerning underwriting, pricing, administration of reinsurance contracts and claims management are validated by SCOR Global P&C and SCOR Global Life and are applied to all underwriting segments of the company in question, regardless of location. For SCOR Global P&C: • Most of the business underwritten is renewed on agreed dates. This situation enables SCOR to establish annual underwriting plans, both qualitative (description of the environment) and quantitative (activity budget). These plans are approved by the COMEX. ; • A quarterly review of technical results is performed by business area (Property and Casualty Treaties, Specialty Lines, Business Solutions (Facultative), joint ventures and partnerships) and region (EMEA (Europe, Middle East & Africa), Americas, Asia-Pacific). The review enables to analyze technical results by underwriting year, by nature and by line of business; • Underwriting and pricing guidelines, defined by SCOR Global P&C, specify the underwriting capacities delegated to each underwriter in each entity, as well as the underwriting rules and principles to be complied with. They follow update and approval processes as well as a formalism. • Business opportunities going beyond the stipulations of the guidelines thus defined are subject to special referral procedures at two key levels: (1) by its Underwriting Management and Retrocession Department; and if need be by the Group Legal Department, (2) and for cases which may have a significant impact on the balance sheet (thresholds and/or conditions defined in a procedure or specific guidelines) by the Group Risk Management Department; • Concerning claims management, the definition of a global claims and commutations management policy for all Treaty, Facultative and Specialty business of SCOR Global P&C is carried out by the Claims & Commutations Department; this department manages major, serial, contentious and latent claims. In addition, audits of the clients’ claim departments are conducted by claim experts from the principal entities of SCOR in order to review important files and to provide technical support to these cedants; • Cross reviews are initiated by SCOR Global P&C's Risk Management to evaluate the quality of underwriting, pricing and claims handling of particular business units or certain lines of business, to identify and assess risks, to evaluate the appropriateness and effectiveness of controls and to propose risk-management measures, including mitigating actions; • The Risk Modeling & Global Natural Hazards Department is in charge of monitoring accumulations. A “Cat” committee meets regularly to review the accumulation reporting package and decide or arbitrate the allocation of Cat capacities by country. Earthquake and storm risks are managed by market models (AIR and RMS) in the regions considered to be the most exposed; • Risks specific to the administration of contracts are subject to controls performed at the level of the subsidiaries and branches. SCOR’s Group Information System includes multiple automatic controls and additional control tools; • SCOR Global P&C Underwriting Management and Retrocession Department establishes and implements the external retrocession plan for P&C activities. This department is responsible for its proper application, for monitoring the solvency of the retrocessionaires, the related counterparty risks and, when necessary, for the collection of balances due; • In order to ensure an adequate and efficient control of the reserves, a report is established on a yearly basis by the Group Actuarial Department, where the Group Chief Actuary gives his opinion on year end booked reserves‘ adequacy. The main objective of this report is to provide the Executive committee as well as the Board Audit Committee an overall opinion on the reserving adequacy of the P&C division but also to highlight the inherent uncertainties surrounding this assessment. The control of the reserves by the Group Actuarial Department is articulated around three axis: - a quarterly follow up of the claims evolution for each segment through adequate actuarial reporting procedures; 381
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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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Distribution of capital (number of
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On 4 July 2012, Alecta Pensionsför
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19.1 Related party transactions 177
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Amendment #7 to the retrocession ag
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The Board of Directors of SCOR SE,
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absorption of its wholly owned subs
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to the Facility Agreement granted/w
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adjusted on the date of departure b
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188 FINANCIAL INFORMATION CONCERNIN
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20 FINANCIAL INFORMATION CONCERNING
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LIABILITIES AS AT 31 DECEMBER In EU
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20.1.3 CONSOLIDATED STATEMENTS OF C
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20.1.5 CONSOLIDATED STATEMENTS OF C
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20.1.6 NOTES TO THE CONSOLIDATED FI
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• Amendments to IAS 19 - Employee
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Intangible assets The cost of intan
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(e) Cash and cash equivalents Cash
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Impairment of financial assets At e
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available and the reserves are adju
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Shadow accounting For the measureme
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together with actuarial assumptions
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The following table sets forth the
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CASH FLOWS BY SEGMENT The cash flow
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SCOR recognised the redemption rece
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PRO FORMA STATEMENT OF INCOME 2011
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2009 In EUR million (1) Provisional
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The Group conducted its annual asse
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20.1.6.6 NOTE 6 - INSURANCE BUSINES
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(B) MOVEMENTS IN LEVEL 3 FINANCIAL
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Financial lease contracts The Group
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At 31 December 2012 and 2011, the u
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MORTALITY SWAPS On 1 January 2008,
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20.1.6.10 NOTE 10 - ASSUMED AND CED
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Issued share capital The number of
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CAPITAL MANAGEMENT POLICY, OBJECTIV
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Share-based payments The caption
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SCOR has entered into a cross-curre
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SCOR Global P&C The table below sho
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The table below is a reconciliation
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(C) SHARE OF RETROCESSIONAIRES IN C
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(c) Defined benefits pension cost 2
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The following table summarizes the
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The table below presents the change
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The performance conditions will be
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In 2010 the tax rate change impact
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Applying the deferred tax netting m
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These expenses are further allocate
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In the event of termination of the
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SIGNIFICANT SUBSIDIARIES, INVESTMEN
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20.1.6.25 NOTE 25 - COMMITMENTS REC
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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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Page 362 and 363: 362 APPENDIX B: REPORT OF THE CHAIR
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Page 366 and 367: Pursuant to the Internal Charter, t
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Page 384 and 385: (D) INFORMATION AND COMMUNICATION
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Page 388 and 389: Other information We confirm that t
Page 390 and 391: APPENDIX C: GLOSSARY* *This glossar
Page 392 and 393: D DECENNIAL INSURANCE Decennial ins
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Page 398 and 399: elevant at the date of acquisition.
Page 400 and 401: 1 Operating and financial review of
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Page 404 and 405: 3.2 Group social indicators 3.2.1 D
Page 406 and 407: As a global company organised into
Page 408 and 409: 3.2.10 Distribution by age Indicato
Page 410 and 411: in cooperation with the company doc
Page 412 and 413: - The items pertain to the entire G
Page 414 and 415: • Two approaches have been develo
Page 416 and 417: POLLUTION AND WASTE MANAGEMENT Info
Page 418 and 419: BIODIVERSITY PROTECTION formation r
Page 420 and 421: The Group’s French subsidiaries a
Page 422 and 423: 5.5 OTHER ACTIONS TAKEN IN SUPPORT
Page 424 and 425: 7 STATUTORY AUDITORS’REPORT ON TH
Page 426 and 427: 426 APPENDIX E: CROSS REFERENCE TAB
Page 428: European Company With a share capit
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4.4 Legal risk - Scor

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