4.4 Legal risk - Scor

usiness units. This process, and the consolidation of US domestic organisations and activities within one operating unit,
are in line with SGL’s global market structure approach.
Gross written premiums
The gross written premium development is driven by the long-term nature of in-force life reinsurance business and new
business acquired in the reporting year.
In 2012, SCOR Global Life’s gross written premiums increased by 34.4% to EUR 4,864 million compared to EUR 3,620
million in 2011 (EUR 3,035 million in 2010).
SCOR Global Life's business acquisition of the mortality business portfolio of Transamerica Re contributed in 2012 for EUR
1,693 to gross written premiums (compared to EUR 677 million of gross written premiums for the five month period after
acquisition in 2011).
This increase was also accentuated by EUR 264 millions of positive exchange rate impact on premiums.
Furthermore, substantial increase in written premiums was achieved in emerging markets such as Latin America and
Asia/Pacific, and in Eastern Europe, Canada and UK/Ireland. The longevity team created in London in 2011 was a main
contributor to the UK premium growth in 2012, with treaties generated in 2011 and 2012. This growth was partially offset by
a decrease of premiums in the Middle East, where business did not meet SCOR profitability targets.
Business has developed by double-digit growth in critical illness, disability and personal accident. Longevity showed
significant growth.
Life technical margin
Life technical margin (1) in 2012 was 7.7 % compared to 8.1% in 2011 and 5.4% in 2010 on a comparative basis (2) .
The life technical margin excluding GMDB run-off portfolio reserve release for 2012 of 7.4% decreased marginally compared
to the 2011 ratio of 7.5% and is strongly supported by business performance in the European markets, Latin America, and
Asia Pacific.
9.2.4 CAPITAL SHIELD POLICY
As part of its policy of diversifying its capital protection tools, on 1 November 2012 SCOR successfully placed a new
catastrophe bond (“cat bond”), Atlas Reinsurance VII Limited, which provides the Group with twofold protection of USD 60
million (“Class A Notes”) against US hurricanes and earthquakes, and EUR 130 million (“Class B Notes”) against European
windstorms, for a risk period extending from 1 January 2013 to 31 December 2015.
Atlas Reinsurance VII Limited is an Irish reinsurance vehicle. Aon Benfield Securities Inc., Natixis and BNP Paribas
managed the transaction and the placement of the book on the market. Standard & Poor's rates Atlas VII Class A Notes at
BB-, and Atlas VII Class B Notes at BB.
The loss payments covered by the Class A Notes are based on market share factors applied to the market insured loss, as
reported by PCS for the US on an annual aggregate basis. Class B Note losses are covered on per-occurrence basis, using
the PERILS index.
These catastrophe bonds will be accounted for as reinsurance contracts, due to the presence of an ultimate loss clause.
In 2011, SCOR succeeded in the renewal of its retrocession programs. Indeed, within the framework of its capital shield
policy, one of its four strategic cornerstones, on 12 December 2011, SCOR successfully placed a new catastrophe bond
(“cat bond”), Atlas VI Capital Limited Series 2011-1 and 2011-2, which provides the Group with USD 270 million of
protection against US Hurricanes and Earthquakes and EUR 50 million of protection against European windstorms, for a risk
period extending from 13 December 2011 to 31 December 2014 for the US series and 31 March 2015 for the European
series. This transaction succeeded Atlas V Capital Limited, which matured on 24 February 2012 and provided similar
geographical cover as the one of the Series 2011-1 of USD 200 million.
Atlas VI Capital Limited is a special-purpose company created in 2009 and incorporated under the laws of Ireland. It may
issue a series of cat bonds over several years. Aon Benfield Securities Inc. and Natixis managed the transaction and the
placement of the book on the market. Standard & Poor's rates series 2011-1 at B, series 2011-1 B at B+ and series 2011-2
A at B.
The loss payments covered by this cat bond are based on market share factors applied to the market insured loss, as
reported by PCS for the US and by PERILS for Europe.
SCOR succeeded in the renewal of its retrocession programs in 2010. On 9 December 2010, SCOR successfully placed a
new catastrophe bond (“Cat bond”), Atlas VI Capital Limited Series 2010-1, which provides the Group with EUR 75 million of
protection against European windstorms and Japanese earthquakes for a risk period extending from 10 December 2010 to
(1) Refer to “Paragraph 9.2.6 – Calculation of financial ratios”.
(2) The Life technical margin better reflects the biometric characteristics of SCOR Global Life’s portfolio and therefore has replaced the Life operational margin
disclosed in the 2011 Registration Document and previous financial reporting. The published technical margin was 5.5 % in 2010. The difference is due to a new
segment presentation (see “Paragraph 20.1.6.2 – Segment information”).
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