4.4 Legal risk - Scor

year ended 31 December 2012 down from 5.5% in 2011 and 2010 (1) . The total expense base for the years ended 31
December 2012, 31 December 2011 and 31 December 2010 was EUR 589 million, EUR 468 million and EUR 421 million
respectively, on a comparative basis.
Operating income
Operating income for the year ended 31 December 2012 amounted to EUR 645 million as compared to EUR 323 million in
2011 and EUR 490 million in 2010. The 2012 operating income has benefitted from the strong technical performance of
SCOR Global Life, the robust profitability of SCOR Global P&C even though impacted by higher than expected natural
catastrophes losses, particularly in the fourth quarter of 2012 and the solid performance of SCOR Global investments, in
spite of a low-yield environment.
The 2011 operating income has been affected by the high frequency and severity of natural catastrophes especially in the
first and last quarters of 2011, partially offset by the active SCOR Global Investment asset portfolio management, the
positive technical developments of SCOR Global Life and by SCOR Global P&C low attritional loss level of 57.6%.
The 2010 operating income has been positively influenced by the active SCOR Global Investment asset portfolio
management, the positive technical developments on SCOR Global Life and on SCOR Global P&C low attritional loss level,
which more than compensated for the high frequency and severity of natural catastrophes, especially in the first quarter of
2010.
Net income
SCOR generated a net income of EUR 418 million in 2012, compared to EUR 330 million and EUR 419 million respectively
for the years ended 31 December 2011 and 2010. Although 2012 was impacted by higher than expected natural
catastrophes (Earthquakes in Italy and Hurricane Sandy) especially in the last quarter of the year, the net income was
positively influenced by the strong underlying technical performances both SCOR Global Life and SCOR Global P&C and
the prudent asset management policy of SCOR Global Investments which safeguarded shareholders’ interests whilst
delivering solid returns. In 2012, the effective tax rate was 20.4%. This results from a positive geographical rate mix partially
offset by a negative EUR 12 million impact from the additional contribution to the 2010 exit tax on the capitalization reserve
in France.
The 2011 net income was affected by an extraordinary series of natural catastrophes, especially in the first and final
quarters of the year, while benefiting from a positive underlying performance of SCOR Global P&C and SCOR Global Life, a
prudent asset management policy and a gain from bargain purchase related to the acquisition of the mortality business of
Transamerica Re of EUR 127 million. In 2010, the Group benefited from the favorable tax law change in France regarding
the taxation of the statutory capitalization reserve resulting in a positive impact of EUR 42 million as well as from the
reactivation of deferred tax assets of the Non-Life entities in the US.
Return on equity (2) was 9.1%, 7.7% and 10.2% for the years ended 31 December 2012, 2011 and 2010 respectively. Basic
earnings per share were EUR 2.27, EUR 1.80 and EUR 2.32 for the years ended 31 December 2012, 2011 and 2010.
9.2.2 SCOR GLOBAL P&C
SCOR Global P&C is a leading P&C reinsurer with a focus on European markets and a strong position in Latin America, the
Asian markets and the Middle East.
The business comprises traditional reinsurance business; Treaty, Business Solutions, and Specialty Lines. SCOR Global
P&C capitalizes on a long-standing franchise, experience, and an extensive data base comprising multi-line expertise.
In 2012, SCOR Global P&C continued to actively execute its P&C treaty business portfolio management strategy by further
expanding property proportional, natural catastrophes and casualty businesses and by improving geographic diversification
towards Asia and the Americas.
In 2011, SCOR Global P&C continued to actively execute its P&C treaty business portfolio management strategy by further
expanding Non-proportional business and improving geographic diversification towards Asia and the Americas.
The increase in SCOR Global P&C premium in 2010 is consistent with expected growth and reflects successful renewals
achieved throughout the year and across the targeted portfolio.
Gross written premiums
In 2012, gross premium written increased by 17% compared to 2011, of which 6% points were linked to foreign exchange
impact (particularly due to the appreciation of the US Dollar). At constant exchange rate the growth was 11%, above the 9%-
10% gross written premium increase announced in Strong Momentum. The growth was mainly driven by the improved
performances of lines of business in P&C treaties and natural catastrophes and by improved geographical diversification
towards Asia and the Americas.
(1) The Group cost ratio published in the 2010 Registration Document was 5.6 % as at 31 December 2010. The total expense base previously published was EUR
404 million in 2010. The difference is due to the creation of a new cost center unit (see “Paragraph 20.1.6.2 – Segment information”).
(2) Refer to “Paragraph 9.2.6 – Calculation of financial ratios”.
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