4.4 Legal risk - Scor

Long-Term Care
Long-Term Care (“LTC”) insurance covers policyholders unable to perform predefined activities of daily living, and as a
result, needing the constant assistance of another person. SCOR Global Life has been pioneering LTC reinsurance
solutions in the French market for approximately twenty years, and has acquired sound practical experience in dealing
with problems related to underwriting and managing LTC risks. The Group believes that one of the main private LTC
insurance markets is France with over two million lives and it believes that SCOR Global Life enjoys a leading position in
the French market. At the forefront of industry development, SCOR Global Life is now expanding its geographical scope
in LTC by introducing its LTC reinsurance coverage to several markets. It already enjoys strong positions in Korea and
Israel.
Critical Illness
Critical Illness (“CI”) insurance pays a lump sum benefit, to be used at discretion, if the insured person suffers a serious
condition and survives a defined period. The use and effectiveness of CI covers varies considerably between countries.
SCOR Global Life is a market leader in reinsurance of CI in the U.K. It leverages experience and expertise from the U.K.
to cross-sell into selected markets, such as Taiwan, Korea and Sweden.
Health
Health represents a small proportion of SCOR Global Life’s portfolio. It is written predominantly in the Middle East with a
book inherited from Converium as well as Asia, and small volumes in markets such as France and Canada. The SCOR
Global Life approach to underwriting of health risks is selective, with a careful market entry strategy.
Annuities
SCOR Global Life was until the sale of this business on 18 July 2011 present in the fixed annuity market in the U.S., as
a reinsurer of IIC, a member of the Group. The products provided either the performance of an index (often the S&P
500) with a zero percent floor, or a fixed interest rate which are credited to the policyholder’s account value. With the
sale of IIC, SCOR no longer actively writes annuities coverage.
Personal Accident
Personal accident is a cover provided by SCOR Global Life. A main source of business is ReMark, which provides direct
global marketing of life insurance products to insurers, financial institutions and affinity partners. ReMark designs and
executes direct marketing programs.
Longevity
Longevity refers to producs with risk of negative deviation from expected results due to the insured or annuitant living
longer than assumed in the pricing of the insurance cover. This activity includes annuity and long-term care covers.
SCOR has exclusively usined in this line of business coming from the UK pension skim market. This portfolio is the most
dynamic part of SCOR’s UK portfolio.
6.1.3 UNDERWRITING, DISTRIBUTION, CATASTROPHE RISK, CLAIMS AND RESERVES
6.1.3.1 Underwriting
Consistent with the Group's strategy of selective market and business division development, SCOR seeks to maintain a
portfolio of business risks that is strategically diversified both geographically and by line and class of business. The
Group's insurance risk exposure is also mitigated by diversification across a large portfolio of reinsurance contracts. The
volatility of risks is also reduced by careful business selection, implementation of underwriting guidelines, the use of
retrocession and other risk transfer arrangements and proactive claims handling as well as underwriting, claims and
administration audits at ceding companies.
SCOR's underwriting covers reinsurance in Non-Life and Life and occasionally insurance in Non-Life. Such underwriting
is conducted through duly authorized subsidiaries and branches of the Group, as well as from the Group’s Lloyds
syndicate (Channel Syndicate 2015).
Underwriting, actuarial, accounting and other support staff are located in the Group’s six Hubs as well as in local
subsidiaries and branches. However, SCOR's overall exposure to particular risks and in particular geographic zones is
centrally monitored thanks to a unique integrated Group IT system.
Non-Life Business
In order to mitigate its property exposure, the Group retrocedes a portion of the risks it underwrites. See “Paragraph
6.1.4 Capital shield policy” below for a description of the use of retrocession. SCOR's Non-Life retrocession mainly deals
with, but is not limited to, natural catastrophes and large corporate risks for which the Group purchases protection
beyond certain levels of severity of losses or impact of events. In particular, it has a global retrocession program, which
is revised annually, and which provides partial coverage for catastrophic events, on an occurrence basis. The
retrocession program includes both traditional retrocession as well as the use of alternative risk transfer solutions (e.g.,
the multi-year securitization of catastrophic risk in the form of ILS and mortality swaps and the issuance of contingent
capital securities). See “Paragraph 6.1.4 Capital shield policy”
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