4.4 Legal risk - Scor

CAPITAL (CONTINGENT)
Funds that would be available under a pre-negotiated agreement if a specific contingency (such as a natural disaster)
occurs.
CAPITAL (SHIELD POLICY)
Framework that protects SCOR shareholders, ensuring that they do not become SCOR’s retrocessionaires. The capital
shield is made up of three main pillars: capital buffer, risk appetite framework and hedging (retrocession, ILS, contingent
capital etc.).
CASUALTY INSURANCE
Insurance primarily concerned with the losses caused by injuries to third parties by the policyholder and the legal liability
imposed on the insured resulting there from.
CATASTROPHE (CAT)
SCOR defines a natural catastrophe as events involving several natural risks including but not limited to flood,
windstorm, earthquake, hurricane, tsunami, that give rise to an insurable loss. For reporting purposes, the Group
separately considers catastrophes as events causing pre-tax losses, net of retrocession, totaling EUR 3 million.
CATASTROPHE (OR CAT) BOND
A high performance bond which is generally issued by an insurance or reinsurance company. If a predefined occurrence
takes place (such as an earthquake, tsunami, hurricane etc.), the bondholder loses all or part of his investment in the
bond.
This type of insurance-linked security allows insurance and reinsurance companies to transfer peak risks (such as those
arising from natural catastrophes) to capital markets, thereby reducing their own risks.
CREDIT DEFAULT SWAP
The most conventional form of credit derivatives, allows one side to buy the protection against the default of its
counterparty by regularly paying a third part a premium and receiving from it the pre-determined amount in the event of
default.
CEDING COMPANY (ALSO CALLED CEDANT))
Insurance company, mutual society or provident insurance provider that transfers (or “cedes”) a part of the risk it has
underwritten to a reinsurer.
CESSION OR CEDED BUSINESS
Transaction whereby an insurer (cedent or ceding company) either mandatorily or facultative transfers part of its risk to
the reinsurer against the payment of premium. The opposite of ceded business is assumed business.
CLAIMS AND CLAIMS EXPENSE
Amount relating to actual or estimated claims made by an insured for an indemnity under an insurance contract for loss
events that occurred in the accounting year.
CLAIMS RATIO
The ratio of the sum of claims paid, the change in the provisions for unpaid claims and claim adjustment expenses in
relation to earned premium.
CLASS OF BUSINESS
A homogeneous category of insurance. Since 1985, French reinsurers have used a uniform presentation that
distinguishes between life, fire, crop hail, credit and surety, other risks, third party liability, motor, marine and aviation
classes. The last eight of these form the general class of Non-Life business. English-speaking markets generally
distinguish between Property (damage to goods) and Casualty (liability insurance and industrial injury), and Life
business.
COMBINED RATIO
Sum of the non-life claims ratio and the expense ratio.
COMMUTATION
A transaction through which insurers or reinsurance surrender all rights and are relieved from all obligations under the
insurance or reinsurance contract in exchange for a single current payment.
CREDIT AND SURETY INSURANCE
Credit insurance provides insurance coverage against loss to a supplier caused by customer failure to pay for goods or
services supplied. Surety insurance relates to sureties and guarantees issued to third parties for the fulfillment of
contractual liabilities.
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