4.4 Legal risk - Scor

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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”. 90
In 2011, gross written premiums have increased by 8.8% at current exchange rate to EUR 3,982 million versus EUR 3,659 million in 2010. SCOR Global P&C strong January, April and July 2011 renewals confirmed SCOR’s excellent position in the reinsurance industry, as well as the validity of its hypotheses on the evolution of the reinsurance environment released in September 2010 in Monte Carlo, in anticipation of the renewal season. The evolution in gross written premiums in 2011 confirms a stable expected technical profitability and return on capital, in line with the objectives of the “Strong Momentum” plan, due to dynamic management of the portfolio. In 2010, gross written premiums have increased by 12.2% at current exchange rate to EUR 3,659 million versus EUR 3,261 million in 2009. Due to its improved standing in the industry and its continued momentum, SCOR Global P&C delivered strong January, April and July renewals confirming the strength and depth of SCOR 's business franchise. Combined ratio SCOR Global P&C achieved a net combined ratio (1) of 94.1 % in 2012 against 104.5 % in 2011 and 98.7 % in 2010 (2) . The improvement of the combined ratio was in line with expectations in spite of the main events in 2012 mostly hurricane Sandy, Costa Concordia shipwreck, worldwide climate disturbances impacting agriculture in the United States and Brazil, and developments on the floods in Thailand. Natural catastrophes had a 7.6% impact on the Group net combined ratio for year end 2012 compared to a 18.5% impact in 2011. In 2011, the deterioration of the net combined ratio was attributable to the exceptional impact of natural catastrophes particularly the first half and last quarter of 2011. Impact of natural catastrophes The following table highlights losses due to catastrophes for the years 2012, 2011, and 2010: At 31 December 2012 2011 2010 Number of catastrophes occurred during the financial year (1) 10 (7) 15 (5) 17 (4) In EUR million Losses and loss adjustment expenses due to catastrophes, gross 355 (8) 949 346 Losses due to catastrophes, net of retrocession (3) 307 (8) 636 317 Group net loss ratio (2) 65.5% (8) 76.6% (6) 71.2% Group net loss ratio excluding catastrophes 57.9% (8) 58.1% (6) 61.6% (1) SCOR defines a catastrophe as a natural event involving several <strong>risk</strong>s and causing pre-tax losses, net of retrocession, totaling EUR 3 million or more (2) Loss ratios are calculated on the basis of Non-Life claims, expressed as a percentage of Non-Life premiums earned (3) Net of recoveries and reinstatement premiums (assumed and retrocession) (4) Earthquakes in Chile, Haïti and New Zealand, floods in Saudi Arabia, Eastern Europe, China, Pakistan, Poland, Germany and Australia, storm Xynthia, Typhoon Kompasu, Melbourne hailstorm in Australia, East coast USA, Catalonia (Spain) and Scandinavian snow storms, rainfalls in Denmark, storm in Brazil (5) Earthquakes in Japan and New Zealand, floods in Australia, Denmark, Thailand and Montana (USA), cyclone Yasi (Australia), hurricane Irene (USA), Tornadoes and storms in the USA, forest and wildfires in Canada and Texas (USA) (6) The 2011 Combined ratio includes a EUR 47 million (pre-tax) positive effect (1.4 % pts) related to settlement of the subrogation action undertaken by World Trade Center Property insurers against the Aviation insurers (7) Excluding floods in Thailand (2011 event) and including : Hurricane Sandy, Dagmar Storm, Oklahoma Tornadoes, Tornadoes in Southern United States, May Earthquakes (20 & 29/05/2012) in Italy, Montreal Rainstorm, Alberta Hail Storm, Typhoon Bolaven, Costa Rica Earthquake (8) Thailand floods 2011 event’s development impact is included in 2012 cat ratio In 2012, SCOR was affected by the following catastrophes which resulted in net estimated losses greater than EUR 10 million as at 31 December 2012: Cat losses Date of loss Estimated losses as at 31 December 2012 Earthquake in Italy 20 May 2012 26 Earthquake in Italy 29 May 2012 21 Dagmar Storm (Norway ) Late December 2011 11 Alberta Hail Storm (Canada) August 2012 12 Hurricane Sandy (USA) October 2012 137 Other (less than EUR 10 million) 2012 25 (1) Refer to “Paragraph 9.2.6 – Calculation of financial ratios”. (2) The net combined ratio published in the 2010 Registration Document was 98.9 %. The difference is due to the creation of a new cost center unit (see Section 20.1.6.2 – Segment information). 91
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NOTICE Certain statements contained
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1 Person responsible 8 1.1 Name and
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13 Profit forecasts or estimates 11
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8 PERSON RESPONSIBLE
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1 PERSON RESPONSIBLE 1.1 Name and t
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2.1 Auditors 13 2.2 Resignation or
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14 SELECTED FINANCIAL INFORMATION
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3 GROUP KEY FIGURES (UNDER CURRENT
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4.1 Risk related to the business en
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claims or surrenders of policies th
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B. Life reinsurance The main catego
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statutory reserve requirements or h
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B. SCOR is exposed to Guaranteed Mi
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4.1.9 FINANCIAL RATINGS PLAY AN IMP
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and amortization expenses related t
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F. Deposits with custodians As part
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4.2.2 SCOR FACES RISKS RELATED TO I
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Details of intangible assets, relat
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4.4.2 INCONSISTENT APPLICATION OF E
Page 40 and 41: See “Appendix B - II. Internal co
Page 42 and 43: 5.1 History and development of the
Page 44 and 45: proportion of the voting rights hel
Page 46 and 47: Gerling Global Re Group, which deve
Page 48 and 49: 5.2 Investments 5.2.1 PRINCIPAL INV
Page 50 and 51: 6.1 Primary activities 53 6.2 Princ
Page 52 and 53: The targets of the strategic plan a
Page 54 and 55: B. Proportional and non-proportiona
Page 56 and 57: payment of commercial debts. Surety
Page 58 and 59: Long-Term Care Long-Term Care (“L
Page 60 and 61: with local lines of business and po
Page 62 and 63: transfer solutions (e.g., catastrop
Page 64 and 65: Retrocession procedures are central
Page 66 and 67: The portion invested in fixed incom
Page 68 and 69: 6.2 Principal markets SCOR is chara
Page 70 and 71: On 6 March 2010, STOXX announced SC
Page 72 and 73: The premiums up for renewal, which
Page 75 and 76: 75 ORGANIZATIONAL STRUCTURE
Page 77: E U R O P E 7 ORGANIZATIONAL STRUCT
Page 80 and 81: 7.1.1.2 Project "New SCOR" In conne
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Page 86 and 87: 86 OPERATING AND FINANCIAL REVIEW
Page 88 and 89: 9 OPERATING AND FINANCIAL REVIEW Th
Page 92 and 93: In 2011, SCOR was affected by the f
Page 94 and 95: 31 March 2014. This transaction suc
Page 96 and 97: Net investment income and investmen
Page 98 and 99: IFRS classification In EUR million
Page 100 and 101: Combined ratio For detailed calcula
Page 102 and 103: 10.1 Capital 103 10.2 Cash flow 103
Page 104 and 105: FINANCIAL LEVERAGE As at 31 Decembe
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Page 108 and 109: studies and publications produced o
Page 110 and 111: 12.1 Most significant trends in pro
Page 112 and 113: SCOR Global Life expects business o
Page 114 and 115: 114 PROFIT FORECASTS OR ESTIMATES
Page 116 and 117: 116 ADMINISTRATIVE AND MANAGEMENT B
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Page 120 and 121: Name Date of Birth Other principal
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Page 130 and 131: Name Age Current Position Executive
Page 132 and 133: of Alea Europe from 1999 to 2006, w
Page 134 and 135: 134 REMUNERATION AND BENEFITS
Page 136 and 137: 15 REMUNERATION AND BENEFITS 15.1 A
Page 138 and 139: and analysts; deepening of the empl
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Subscription and share purchase opt
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Year 2011 Year 2010 Premium/ Gross
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144 BOARD PRATICES
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16 BOARD PRATICES 16.1 Date of expi
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148 EMPLOYEES
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17 EMPLOYEES 17.1 Number of employe
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17.2.2 STOCK OPTIONS HELD BY THE ME
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Options exercised Number of stock o
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Plan Share award rights Price per s
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180 of the Commercial Code, options
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(5) Absolute appliance of Group’s
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The following table shows the free
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Shareholders meeting and Company's
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and, for the not tax resident of Fr
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17.4.2 DEFINED BENEFITS PENSION SCH
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18.1 Significant shareholders known
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Distribution of capital (number of
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On 4 July 2012, Alecta Pensionsför
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19.1 Related party transactions 177
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Amendment #7 to the retrocession ag
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The Board of Directors of SCOR SE,
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absorption of its wholly owned subs
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to the Facility Agreement granted/w
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adjusted on the date of departure b
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188 FINANCIAL INFORMATION CONCERNIN
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20 FINANCIAL INFORMATION CONCERNING
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LIABILITIES AS AT 31 DECEMBER In EU
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20.1.3 CONSOLIDATED STATEMENTS OF C
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20.1.5 CONSOLIDATED STATEMENTS OF C
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20.1.6 NOTES TO THE CONSOLIDATED FI
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• Amendments to IAS 19 - Employee
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Intangible assets The cost of intan
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(e) Cash and cash equivalents Cash
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Impairment of financial assets At e
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available and the reserves are adju
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Shadow accounting For the measureme
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together with actuarial assumptions
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The following table sets forth the
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CASH FLOWS BY SEGMENT The cash flow
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SCOR recognised the redemption rece
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PRO FORMA STATEMENT OF INCOME 2011
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2009 In EUR million (1) Provisional
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The Group conducted its annual asse
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20.1.6.6 NOTE 6 - INSURANCE BUSINES
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(B) MOVEMENTS IN LEVEL 3 FINANCIAL
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Financial lease contracts The Group
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At 31 December 2012 and 2011, the u
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MORTALITY SWAPS On 1 January 2008,
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20.1.6.10 NOTE 10 - ASSUMED AND CED
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Issued share capital The number of
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CAPITAL MANAGEMENT POLICY, OBJECTIV
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Share-based payments The caption
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SCOR has entered into a cross-curre
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SCOR Global P&C The table below sho
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The table below is a reconciliation
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(C) SHARE OF RETROCESSIONAIRES IN C
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(c) Defined benefits pension cost 2
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The following table summarizes the
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The table below presents the change
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The performance conditions will be
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In 2010 the tax rate change impact
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Applying the deferred tax netting m
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These expenses are further allocate
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In the event of termination of the
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SIGNIFICANT SUBSIDIARIES, INVESTMEN
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20.1.6.25 NOTE 25 - COMMITMENTS REC
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and documented before the pricing i
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(iv) Pandemic In Life reinsurance,
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Different types of GMDBs are covere
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(b) Receivables from retrocessionai
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(i) Default of pool members SCOR pa
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Additional information on the timin
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On the other hand, an increase in i
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The market sensitivities of the Gro
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20.2 Auditing of historical consoli
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Other information audited by the le
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21.1 Share capital 293 21.2 Charter
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Directors of SCOR SE decided on 28
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Number initially authorized (date o
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Objective 1. Stimulation of the sec
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21.1.7 HISTORY OF THE COMPANY’S S
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Board of Directors’ borrowing pow
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maintained by BNP on our behalf. Ea
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Proxies may be granted by a shareho
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Shareholders’ Meeting that may ta
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22 MATERIAL CONTRACTS None. 310
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23.1 Expert’s report 313 23.2 Inf
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314 DOCUMENTS ON DISPLAY
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316 INFORMATION ON HOLDINGS
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318 NON FINANCIAL INFORMATION
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320 FEES PAID BY THE GROUP TO THE A
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322 PUBLISHED INFORMATION
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28 PUBLISHED INFORMATION 28.1 Infor
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Date Subject Marchés Financiers 27
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328
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1.1 Significant events of the year
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1.2 Balance sheet 1.2.1 BALANCE SHE
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1.3 Income statement In EUR million
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In EUR million NON-UNDERWRITING ACC
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1.5 NOTES TO THE CORPORATE FINANCIA
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1.7 RECORDING OF REINSURANCE TRANSA
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1.12 FINANCIAL INSTRUMENTS RECEIVED
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Name Original currency Share capita
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NOTE 4 - TRANSACTIONS WITH SUBSIDIA
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(b) Financial liabilities • Initi
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• EUR 44 million in reserves for
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NOTE 10 - ANALYSIS OF GENERAL EXPEN
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Number of which to Group directors
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NOTE 15 - ANALYSIS OF COMMITMENTS G
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Appeal of Versailles. On the basis
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aforementioned notes is appropriate
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362 APPENDIX B: REPORT OF THE CHAIR
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APPENDIX B: REPORT OF THE CHAIRMAN
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Pursuant to the Internal Charter, t
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Lastly, Directors are required to i
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The Audit Committee is composed of
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Every year, the conditions of remun
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Moreover, the Chairman and Chief Ex
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The Group SCOR consists of the pare
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Within this environment, control re
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organization, training sessions tar
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For SCOR Global Life: - an internal
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(D) INFORMATION AND COMMUNICATION
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• enhanced audit trail. The initi
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Other information We confirm that t
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APPENDIX C: GLOSSARY* *This glossar
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D DECENNIAL INSURANCE Decennial ins
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M MARINE AND AVIATION INSURANCE ALS
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RETROCESSION Transaction in which t
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elevant at the date of acquisition.
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1 Operating and financial review of
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1.2 Operating results of SCOR SE du
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3.2 Group social indicators 3.2.1 D
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As a global company organised into
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3.2.10 Distribution by age Indicato
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in cooperation with the company doc
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- The items pertain to the entire G
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• Two approaches have been develo
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POLLUTION AND WASTE MANAGEMENT Info
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BIODIVERSITY PROTECTION formation r
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The Group’s French subsidiaries a
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5.5 OTHER ACTIONS TAKEN IN SUPPORT
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7 STATUTORY AUDITORS’REPORT ON TH
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426 APPENDIX E: CROSS REFERENCE TAB
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European Company With a share capit
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