4.4 Legal risk - Scor

The premiums up for renewal, which represented around 11% of the total annual volume of treaty premiums, were
distributed between treaties (69%) and Specialty treaties (31%) in three geographic areas: Asia (70%), Americas (22%)
and EMEA (8%).
On a business line level, the main developments of the 1 April 2012 renewals were as follows:
• In Non-Life Treaties: premiums were up by 16% and recorded a pricing increase of around 10%, with no
increase in exposure. This increase in the volumes underwritten and in prices was mainly linked to renewals in
Asia, and more specifically in Japan and India. These two countries represented three quarters of the treaty
premiums renewed at 1 April 2012, and each recorded growth of 25%. Premiums underwritten in Asia
benefited from sharp price increases and significant improvements to coverage conditions, in both direct
insurance and reinsurance.
In the Americas, the volume of premiums underwritten was down by 9%. This change was due to contrasting
trends, between strong growth in Latin America (+16%) and a significant decline in the United States (- 23%,
although this related to a limited premium volume of EUR 31 million), where SGPC reduced its exposure in
certain lines of business that no longer offer the levels of profitability expected.
Finally, SCOR achieved growth of 26% in EMEA, benefiting from pricing conditions up by 3.8% and expanding
its business franchise with new cedants.
• In Specialty Treaties: SGPC chose not to renew certain contracts, concentrating instead on improving the
profitability of its portfolio, which remained stable in terms of volume and price. The fall in volumes in both
Credit & Surety (- 6%) and in Agriculture was due to a small number of treaties. The Marine and Construction
business lines, which benefited from more satisfactory pricing conditions, recorded growth of 17.1% and 13.2%
respectively.
On 24 July 2012, SCOR announced that during the June-July renewals, SCOR Global P&C (SGP&C) delivered a strong
24% premium increase at constant exchange rates to EUR 462 million. Prices were up 3% compared to 2011 and
conditions met expectations, thereby helping to improve year-to-date expected technical profitability, which was in line
with the objectives of Strong Momentum V1.1.
Around 12% of the annual P&C treaty premiums were up for renewal at June-July 2012. The EUR 372 million premiums
up for renewal were mainly from Latin America (27% of the total), the US (24%), China (14%) and Australia (10%), split
evenly between Specialty Lines (53%) and Treaties (47%).
These renewals benefitted from the Group’s excellent franchise and market positions, which were reinforced by the
recent rating upgrades. On a year-to-date basis, prices were up 3%, and the expected operational performance from
renewed and newly underwritten business met all internal profitability targets.
P&C Treaties: premiums were up by 26% to EUR 220 million, with prices increasing by around 3% on average. This was
a testimony to the fact that the Group was continuing to broaden and further deepen its franchise on a global scale. The
portfolio continued to be actively managed, with around 12% of treaties having been either cancelled or restructured.
• The June-July renewals were particularly important for the Latin American & Caribbean region, with close to
half of the area’s business up for renewal. This region witnessed growth of nearly 14%, with improving
expected returns thanks to a focused underwriting approach.
• A significant part of Australia and New-Zealand premiums were up for renewal at 1st July, representing 20% of
P&C Treaty premiums for the period. SGPC’s Australian book was down by 17%, mainly due to some large
treaties shifting from Proportional to Non-Proportional, but overall prices were up by close to 8% in Asia-
Pacific, and the expected underwriting ratio improved by 3 percentage points.
• Many other areas, which typically do not represent a large proportion of the June-July renewals (Europe, South
Africa, Near & Middle East) witnessed strong growth, concentrated on a few selected large treaties, and
benefiting from the recent upgrades to “A+”.
Specialty Line Treaties: premiums were up by 23% to EUR 242 million, with prices increasing on average by around 2%.
Key drivers of this growth were:
• Credit & Surety, with premium growth of 28%, led by a significant treaty in China, and positive development in
Brazil.
• US CAT, with premium growth of 25%, on the back of price increases of +6%. SGPC continued to re-profile its
overall CAT portfolio towards more US exposures for better balance and diversification, and its US CAT book
towards large regional and national companies.
• Agriculture business represented a significant part of the June-July renewals, much of it from Latin America.
Trends witnessed so far on the book have been favorable.
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