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4.4 Legal risk - Scor

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See “Appendix B – II. Internal control and <strong>risk</strong> management procedures, C. Principal activities and participants of <strong>risk</strong><br />

control” for further information on <strong>risk</strong> mitigation actions.<br />

4.5 Other <strong>risk</strong><br />

4.5.1 SCOR’S ORDINARY SHARES PRICE COULD BE VOLATILE AND COULD DROP UNEXPECTEDLY AND<br />

INVESTORS MAY NOT BE ABLE TO SELL THEIR ORDINARY SHARES AT OR ABOVE THE PRICE THEY PAID<br />

The price at which SCOR’s Ordinary Shares will trade may be influenced by a large number of factors, some of which<br />

will be specific to the Group and its operations and some of which will be related to the insurance industry and equity<br />

markets generally. As a result of these factors, investors may not be able to resell their Ordinary Shares at or above the<br />

prices which they paid for them. In particular, the following factors, in addition to other <strong>risk</strong> factors described in this<br />

section, may have a significant impact on the market price of Ordinary Shares:<br />

• a degrade or rumored degrade of SCOR’s solvency, credit or financial strength ratings, including placement on<br />

credit watch;<br />

• potential litigation involving the Group or the insurance or reinsurance industry generally;<br />

• changes in financial estimates and recommendations by securities research analysts;<br />

• fluctuations in foreign exchange rates and interest rates;<br />

• the performance of other companies in the insurance or reinsurance sector;<br />

• regulatory and legal developments in the principal markets in which SCOR operates;<br />

• international political and economic conditions, including the effects of terrorism attacks, military operations<br />

and other developments stemming from such events and the uncertainty related to these developments;<br />

• investor perception of SCOR, including actual or anticipated variations in its revenues or operating results;<br />

• SCOR’s announcements of acquisitions, disposals or financings or speculation about such acquisitions,<br />

disposals or financings;<br />

• changes in dividend policy, which could result from changes in SCOR’s cash flow and capital position;<br />

• sales of blocks of SCOR’s shares by shareholders; and<br />

• general economic and market conditions.<br />

4.6 Insurance of specific operational <strong>risk</strong>s (excluding<br />

reinsurance activity) (1)<br />

SCOR is exposed to specific operational <strong>risk</strong>s. See “Section 4.1.11 – Operational <strong>risk</strong>s, including human errors or<br />

computer system failure, are inherent in SCOR’s business.”, some of which are transferred in whole or in part to direct<br />

insurers as follows:<br />

• The properties and other assets of SCOR and its subsidiaries are covered locally through property and fire<br />

damage as well as IT <strong>risk</strong> policies.<br />

• Liability <strong>risk</strong>s are mostly covered at Group level and include civil liability <strong>risk</strong>s related to the operation of the<br />

company caused by employees and real estate, professional liability <strong>risk</strong>s and civil liability <strong>risk</strong>s of directors<br />

and officers.<br />

Nevertheless, these insurance covers could prove to be insufficient. In case of a loss, the insurance companies could<br />

also possibly contest their liability towards SCOR. This could have a material adverse impact on SCOR’s business,<br />

present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.<br />

4.7 Risk and litigation: Provisioning methods<br />

Refer to “Section 20.1.6 – Notes to the financial statements, Note 1 – Accounting principles and methods.”<br />

(1) Generally speaking, the insurance covers mentioned in this section illustrate the Group policy of transferring some of its own <strong>risk</strong>s.However ,these insurance covers<br />

remain subject to the provisions of corresponding contracts, specifically those regarding possible sub-limits of cover, particular deductibles, geographic scope of cover<br />

and/or particular exclusions.<br />

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