4.4 Legal risk - Scor

Aviation) and a prudent assessment of pricing developments in the business lines most exposed to the
hazards of the economic situation (Credit, Construction All Risks/Erection All Risks, Marine). Contracts linked
to natural catastrophe risks were renewed with coverage and price conditions that took account of recent
experience, particularly in Asia-Pacific (prices up by 29.9%) and on the American continent (+13.2%);
• Technical profitability was stable (measured by the combined ratio and the remuneration of allocated capital),
and rested on prudent projections, particularly for those business lines most exposed to economic
uncertainties;
• Terms and conditions remained largely unchanged, except for contracts and regions impacted by the natural
catastrophes that occurred in 2011;
• There was a higher level of differentiation between cedants within a given market, and the markets themselves
remained fragmented, in accordance with the scenario that SCOR has been putting forward for several years.
These developments were in line with the expectations in terms of pricing evolutions voiced at the 2011 Rendez-Vous
de September in Monte Carlo, and were also in line with the figures set out in the strategic plan “Strong Momentum
V1.1”, which anticipate (1) organic growth of 9% per year, and (2) a combined ratio of 95-96%.
The renewals also enabled the Group to gauge the progress achieved in terms of implementing the various different
initiatives set out in the “Strong Momentum” plan, and more specifically:
• The concretisation of significant private transactions – notably in motor insurance in China and the UK;
• The expansion of the “Business Solutions” platform, with a 27% increase in premium income and a rise in
prices of around 2.8% (For the period from 1 October 2011 to 1 January 2012).
On a business segment level, the main developments were as follows:
In the Non-Life Treaty segment:
• 70% of premiums were up for renewal;
• Written premiums increased by 12% to EUR 1,717 million, compared to EUR 1,528 million up for renewal;
• Private transactions represented 4 percentage points of global premium growth;
• Proportional motor business (notably in the UK, China and the Netherlands) experienced particularly strong
growth;
• The geographical diversification of business increased, with the American continent now representing 21% of
premiums and Asia representing 11%.
In the Specialty Treaty segment:
• 56% of premiums were up for renewal;
• Written premiums increased by 18% to EUR 616 million, compared to EUR 520 million up for renewal;
• The taking up of a strategic position in Aviation insurance resulted in 8 percentage growth points;
• Pricing in lines exposed to economic uncertainties (Credit, Construction/Erection All Risks, Marine) remained
particularly prudent.
In accordance with the “Strong Momentum” plan, the Group continued to re-balance its natural catastrophe portfolio by
increasing its exposure to natural catastrophes in the United States, a market that benefitted from a relatively more
favorable pricing dynamic of around +13.2%, compared to an increase of +4.6% in Europe.
The natural catastrophes that occurred in 2011 mainly impacted the Asia-Pacific region, and the Group recorded price
rises of 29.9% for natural catastrophe business in this region at January 1, 2012. Nevertheless, SCOR chose to leave its
exposure unchanged in the countries affected.
On 26 April 2012, SCOR announced that in fragmented market conditions, SCOR continued to apply the profitability
criteria defined in its strategic plan Strong Momentum V1.1., and pursued its policy of strict underwriting and prudent
pricing in its various lines of business.
SCOR Global P&C (SGPC) recorded growth of 11% at constant exchange rates from the EUR 328 million of premiums
up for renewal at 1 April 2012, with no increase in exposure to natural catastrophes. During these renewals, SGPC
continued to actively manage its risk portfolio, enabling it to achieve an average weighted price increase of 7% whilst
reinforcing the quality of its portfolios: 7% of the business up for renewal were cancelled or restructured.
The global pricing increase of around 7% benefited from the trends observed in natural catastrophes (+17%), particularly
in Asia (+19%) and to a lesser degree in the United States (+ 10%), regions in which most of the nat cat premiums
renewed in April were concentrated. The expected profitability of business renewed in April, measured by projections of
the combined ratio and returns on allocated capital, was up sharply for both Non-life and Specialty treaties, with an
improvement of around 2.5 points on each of the two ratios compared to the same projections made during the renewals
of April 2011.
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