Certain statements contained in this Registration Document may relate to objectives of SCOR SE (“SCOR SE” or the “Company”) or of the SCOR Group (“SCOR” or the “Group”) or to forward-looking information, specifically statements announcing or corresponding to future events, trends, plans, or objectives, based on certain assumptions. These statements are typically identified by words or phrases indicating an anticipation, assumption, belief, continuation, estimate, expectation, forecast, intention, and possibility of increase or fluctuation and similar expressions or by future or conditional verbs. This information is not historical data and must not be interpreted as a guarantee that the stated facts and data will occur or that the objectives will be met. Undue reliance should not be placed on such statements, because, by nature, they are subject to known and unknown risks, uncertainties, and other factors, which may cause actual results, performance, achievements or prospects of SCOR SE to differ from any future results, performance, achievements or prospects explicitly or implicitly set forth in the Registration Document. In addition, such forward-looking statements bear no relation to “profit forecasts” in the sense of Article 2 of Regulation (EC) 809/2004. This document is a free English translation of the “Document de Référence” drafted in French and filed with the AMF on 6 March 2013 . It is for information purposes only and should not be relied upon.
Directive 2003/71/CE (the “Regulation (EC) 809/2004”), the following information is included by reference in this registration document (the “Registration Document”):  SCOR SE’s corporate and consolidated financial statements for the financial year ended 31 December 2011 and the report of the statutory auditors regarding said financial statements as presented in SCOR SE’s registration document filed with the AMF on 8 March 2012 under number D.12-0140.
Strategy or factors of governmental, economic, fiscal, monetary or political character which have had or could have a material impact on the operations of the SCOR Group 94 9.2.6 Calculation of financial ratios 95 10 Capital resources 101 10.1 Capital 103 10.2 Cash flow 103 10.3 Borrowing conditions and financing structure 103 10.4 Restrictions on the use of capital 104 10.5 Sources of financing relating to the future investments by the company and to its property, plant and 11 Research and development, patents and licenses 105 11.1 Research and development activities 107 11.2 Information technologies 108 12 Trend information 109 12.1 Most significant trends in production, sales, inventory, costs, and selling prices since the end of the last financial year 111 12.1.1 Non-Life 111 12.1.2 Life 111 12.2 Known trends, uncertainties, demands, commitments and events reasonably likely to have a material effect on the issuer’s prospects
13 Profit forecasts or estimates 114 14 Administrative and management bodies 116 14.1 Information on the members of the Board of Directors and Senior Management 118 14.1.1 Information concerning the members of the Board of Directors 118 14.1.2 Biographical information on members of the Board of Directors 127 14.1.3 Executive Committee 129 14.1.4 Biographical information on the members of the Executive Committee 131 14.1.5 Negative disclosures about members of the Board of Directors and Senior Management 133 14.2 Administrative, management, and supervisory bodies and Senior Management conflicts of interest 133 15 Remuneration and benefits 134 15.1 Amount of remuneration paid and benefits in-kind 136 15.1.1 Directors’ fees 136 15.1.2 Remuneration 137 15.1.3 Remuneration in the form of options and share allocation 143 15.2 Total amounts set aside or accrued to provide pension, retirement, or similar benefits for financial 16 Board practices 144 16.1 Date of expiration of the current term of office 146 16.2 Information on service contracts of members of Administrative and senior officers 146 16.3 Information on the Accounts and Audit Committee and the compensation and nomination
December 2012 155 17.3 Plans providing employee participation in Company 157 17.3.1 Stock options plans 157 17.3.2 Share allocation plans 159 17.3.3 Stock options plans currently in force within the Group 166 17.3.4 Employee savings plan 166 17.4 Defined pension schemes 167 17.4.1 Defined contribution pension schemes 167 17.4.2 Define benefits pension schemes 168 18 Principal shareholders 169 18.1 Significant shareholders known to SCOR 171 18.2 Negative statement as to the absence of differences between the voting rights of various shareholders 174 18.3 Direct or indirect control by one shareholder 174 18.4 Agreement which could result in a subsequent change in control 174 19 Related party transactions 175 19.1 Related party transactions 177 20 Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses 188 20.1 Historical financial information : consolidated financial statements 190 20.1.1 Consolidated balance sheets 191 20.1.2 Consolidated statements of income 193 20.1.3 Consolidated statements of comprehensive income 194 20.1.4 Consolidated statements of cash flows 195 20.1.5 Consolidated statements of changes in shareholders’ equity 196 20.1.6 Notes to the consolidated financial statements 198 20.2 Auditing of historical consolidated financial information 288 20.3 Sources of financial information not extracted from the audited Financial Statements of the issuer and indication of such absence of audit 290 20.4 Date of most recently audited financial information 290 20.5 Interim and other financial information 290
20.6 Dividend distribution policy 290 20.7 Litigation and arbitration procedures 290 20.8 Material change in financial or commercial situation 290 21 Additional information 293 21.1 Share capital 293 21.1.1 Amount of issued capital and additional information 293 21.1.2 Existence of non-equity shares 297 21.1.3 Number and value of directly or indirectly held treasury shares 297 21.1.4 Amount of convertible securities, exchangeable securities or securities with subscription warrants 299 21.1.5 Information about and terms of any acquisition rights and/or obligations over authorized but unissued capital or an undertaking to increase the capital 299 21.1.6 Information about any capital of any member of the Group which is under option or agreed conditionally or unconditionally to be put under option and characteristics of such options 299 21.1.7 History of the Company’s share capital for the period covered by the historic financial information 300 21.2 Charter and Bylaws 301 21.2.1 Corporate purpose of the issuer (article 3 of the Bylaws) 301 21.2.2 Summary of the Bylaws and internal regulations of the Company concerning the members of its
Administrative, Management and Supervisory bodies 301 21.2.3 Rights, privileges and restrictions attached to existing shares voting rights (articles 8 and 19 of the company’s bylaws) 302 21.2.4 Form, holding and transfer of ordinary shares 303 21.2.5 Actions required to modify shareholders’ rights 304 21.2.6 Conditions for calling annual shareholders’ meetings and extraordinary shareholders’ meetings
(articles 8 and 19 of the Bylaws) 306 21.2.7 Provisions that could delay, defer or prevent a change in control or in the shareholding of the company 307 21.2.8 Declaration thresholds 307 21.2.9 Conditions governing modifications to the share capital (other than legal provisions) 308 23 Third-party information and statements by experts and declarations of any interest 311 23.1 Expert’s report 313 23.2 Information from third parties 313 24 Documents on display 314 25 Information on holdings 316 26 Non financial information 318 27 Fees paid by the Group to the Auditors 320 28 Published information 322 28.1 Information published on the Autorité des Marchés Financiers (AMF) website (www.amf-france.org) 324 28.2 Information published in the Bulletin des Annonces Légales Obligatoires (BALO) [Bulletin of required legal notices publications] (www.journal-officiel.gouv.fr/balo/index.php) 324 28.3 Information published on SCOR’s company website (www.scor.com) 325 28.4 Information published on nyse-euronext’s website (www.euronext.com) 327 28.5 Information published on the info-financières website (www.info-financière.fr/search.php.com) 327
Appendix E of the 2011 Registration Document and in section 20.2 and Appendix A and Appendix E of the 2010 Registration Document. The audit reports on the 2010 Consolidated Financial Statements include comments.
On the date of the Shareholder’s Meeting called to approve the financial statements of the financial year ending 2.1.2 ALTERNATIVE AUDITORS
Picarle et Associés Tour First 1, Place des saisons 92400 Courbevoie France
On the date of the Shareholder’s Meeting called to approve the financial statements of the financial year ending 31 December 2013 2.2 Resignation or non renewal of auditors
(4) Return on invested assets better reflects the performance of assets invested by SCOR and therefore has replaced the return on investments disclosed in the 2011 Registration Document and previous financial reporting. Refer to section 9.2.6 – Calculation of financial ratios, for detailed calculation
(9) Capitalisation and indebtedness is defined as the sum of IFRS shareholders’ equity and subordinated debt
(10) Life technical margin is calculated as a percentage of net technical result plus income from funds held by ceding companies and the net of gross and ceded earned premiums. The net technical result represents the result of the net reinsurance operations of the life division including income and expenses either implied in the reinsurance and retrocession arrangements or fully related to these arrangements. 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
Document, and specifically with:  Appendix B – Report from the Chairman of the Board of Directors on the terms and conditions for preparing and organizing the work of the Board of Directors and on internal control and risk management procedures in accordance with article L.225-37 of the French Commercial Code - Part II, which describes the internal control and risk management procedures set up by the Group to address the risks to which the Group is exposed;  The consolidated financial statements of the Group that appear in Section 20.1 – Historical financial information: consolidated financial statements and in particular Note 26 – Insurance and financial risk;  Section 6 – Business Overview.
America (“the U.S.”) and elsewhere around the world. Many economies around the world are experiencing negative macroeconomic trends, including widespread job losses, higher unemployment, lower consumer spending, lower credit availability, the failure of a number of companies and the growing threat of sovereign default. Any continued deterioration in macroeconomic trends could have an adverse effect on SCOR’s business and results of operations. Since the second half of 2007, the global capital markets have been marked by extreme volatility in some securities prices, and by a very low interest rate level for the best rated sovereign debts, while other sovereign debt issuers, notably in the Eurozone, have been subject to high risk premiums. Although pressure on the most fragile sovereign issuers in Europe seems to have decreased since summer 2012, notably due to announcements from the
In addition, the fixed-income markets can experience a period of extreme volatility that has negatively impacted market liquidity conditions. These volatile conditions have affected a broad range of mortgage and asset-backed and other fixed-income securities, including those rated investment grade, the U.S. and international credit and interbank money markets generally, and a wide range of financial institutions and markets, asset classes and sectors. As a result, the market for fixed-income securities has experienced decreased liquidity, increased price volatility, credit downgrade events, increased probability of default and lower than expected recovery rates. Securities that are less liquid are more difficult to value and may be hard to dispose of.
These events and the continuing market upheavals may have an adverse effect on SCOR, in part because it has a large investment portfolio and also because it is dependent upon customer behaviour. The Group’s premiums are likely to decline in such circumstances and its profit margins could erode. In addition, in the event of extreme prolonged market events, such as the global credit crisis, SCOR could incur significant losses in its investment portfolio. Refer to Section 20.1.6 – Notes to the financial statements, Note 6 – Insurance Business Investments”, which includes analyses of unrealized and realized investment losses. See also “Section 4.2.2 –SCOR faces risks related to its equity-based portfolio.” Even in the absence of a market downturn, SCOR is exposed to a substantial risk of loss due to market volatility. See “Section 4.2.3 – SCOR is exposed to other risks arising from the investments it owns.”
Factors such as consumer spending, business investment, government spending, the volatility and strength of both debt and equity markets, and inflation all affect the business and economic environment and ultimately, the amount and profitability of SCOR’s business. In an economic downturn characterized by higher unemployment, lower household income, lower corporate earnings, lower business investment and lower consumer spending, the demand for SCOR’s and its clients’ products could be adversely affected. In addition, the Group may experience an elevated incidence of
The principal risk the Group faces under insurance and reinsurance contracts is that the actual amounts of claims and benefit payments, or the timing thereof, differ from expectations. The frequency of claims, their severity, actual benefits paid, subsequent development of long-tail claims and external factors beyond the Group’s control, including inflation, legal developments and others have an influence on the principal risk faced by the Group. Additionally, the Group is subject to the quality of underwriting management for certain reinsutreaties and to claims management by ceding companies and other data provided by them. In spite of these uncertainties, the Group seeks to ensure that sufficient reserves are available to cover its liabilities.
SCOR’s property business underwritten by its property and casualty division, which it refers to in this Registration document as “SCOR Global P&C,” “Non-Life” or its “Non-Life division,” is exposed to multiple insured losses arising from a single or multiple events, which can be catastrophic, being either caused by nature (e.g. hurricane, typhoon, windstorm, flood, hail, severe winter storm, earthquake, etc.) or by the intervention of a man-made cause (e.g.
Non-Life insurance and reinsurance businesses are cyclical. Historically, reinsurers have experienced significant fluctuations in operating income due to volatile and unpredictable developments, many of which are beyond the control of the reinsurer including primarily, frequency or severity of catastrophic events, levels of capacity offered by the market and general economic conditions and to the competition level.
"Section 6 – Business overview, 6.1.3.2 Distribution by Production Source." The risk for SCOR is mainly the significant concentration of premiums written thanks to a limited number of brokers. A significant reduction in the business generated through these brokers could potentially reduce premium volume and net income.
Registration document as “SCOR Global Life,” “Life” or its “Life division,” are biometric, behavioral and catastrophe risks as well as credit risk (see “Section 4.1.14 - SCOR is exposed to losses due to counterparty default risks or credit risks”), currency risks (see “Section 4.2.4 – SCOR is exposed to foreign currency exchange rate fluctuations”) and market risks
(see “Section 4.2 – Market risk” and “Section 4.2.3 – SCOR is exposed to other risks arising from the instruments it owns”).
The assessment of biometric risks is at the centre of underwriting in life reinsurance. These are risks which result from adverse developments in mortality, morbidity, longevity or from epidemic/pandemic claims. These risks are evaluated by the actuaries, research centers and medical underwriters of SCOR Global Life, who analyze and use information from
SCOR Global Life’s own portfolio experience, from the ceding companies as well as relevant information available in the public domain, such as mortality or disability studies and tables as available from various sources, e.g. actuarial associations or medical research bodies.
Products such as critical illness, short-term and long-term disability and long term care, which all contain morbidity risk, are subject to the risk of negative trends in health, as well as to the consequences of improved medical diagnoses capabilities which increase the number of claims that otherwise would possibly have remained undetected. Medical progress may enable better treatment resulting in higher claims since certain diseases would have otherwise led to immediate death of insureds. Products providing cover for medical expenses are in particular subject to the risk of higher than frequency incidence rates and inflation of medical costs.
In Life reinsurance, a severe pandemic is a major risk. In the past century, three major outbreaks of influenza occurred and claimed millions of lives. The occurrence of a similar event could cause large losses to SCOR due to an increased mortality far beyond the usual volatility. Experts closely monitor current influenza virus strains and those of other infectious diseases. A lethal virus strain not only of influenza but of any other communicable disease could lead to a heavy increase in mortality rates and increased medical costs which could significantly affect SCOR’s results.
The potential loss relating to a severe pandemic is estimated using models. However, the limited amount of available historical data, combined with the generic model risk, creates a high degree of uncertainty in the results. The financial outcome of a severe pandemic could, therefore, differ considerably from that expected by the model, thus leading to a potentially significantly higher loss than expected.
Lapses refer to either non-payment of premium by the policyholder or to policies which are terminated by the policyholder before the maturity date of the policy. Depending upon the product design, higher or lower policyholder lapses than assumed in the pricing may reduce SCOR Global Life’s expected future income. Policyholder lapses may differ from expectations due to a changing economic environment or other reasons, such as changes in tax incentives for the insurance policies, tarnished reputation of the cedant or from the introduction of more attractive insurance products in the market. SCOR studies and closely monitors this risk.
Economic risks are related to slowdowns in economic growth or recessions in the major markets. This may lead households and companies to take out less insurance, to suspend certain premium payments, or to terminate the insurance policies underlying the existing Life and Non-Life treaties earlier than anticipated.
See “Section 20 – Note 26, Insurance and financial risk – Interdependence of the Non-Life and Life Reinsurance businesses” for further information on risk mitigation actions.
Like other reinsurance companies, SCOR may be exposed to multiple insured losses to property or to individuals arising from a single occurrence, whether a natural catastrophe such as a hurricane, typhoon, windstorm, flood, hail, severe winter storm, earthquake, heat wave, or a man-made catastrophe such as an explosion, fire at a major industrial facility or an act of terrorism. Any such catastrophic event may generate insured losses in one or more of the Group’s lines of business.
The inherent unpredictability of these events makes forecasts and risk evaluations uncertain for any given year. As a result, SCOR’s claims experience may vary significantly from one year to the next, which can have a significant impact on its profitability and financial position. In addition, depending on the frequency and nature of losses, the speed with which claims are made and the terms of the policies affected, it may be required to make large claim payments within a short period. SCOR may be forced to fund those obligations by liquidating investments in distressed market conditions, or by raising funds under unfavorable conditions. In particular, its most significant exposure to natural catastrophes in
Non-Life relates to earthquakes, storms, typhoons, hurricanes, floods and other weather-related phenomena like hail or tornados. The Group evaluates its natural catastrophe exposure by means of catastrophe modeling software.
The models it uses depend very much on the underlying parameters. Any future deviations in these parameters will produce varying results depending on the sensitivity of the model to each parameter. Furthermore, the models can only be applied to certain areas and must respect certain conditions. Catastrophic events could occur in areas not covered by
the models and could therefore generate losses which exceed those predicted. Reality is always more complex than that reflected by the models and this represents a risk for SCOR.
Netherlands (NHT) and Belgium (TRIP), which allows the Group to have limited and known commitments. In the U.S., the Terrorism Risk Insurance Act passed in November 2002 for a period of three years, which was extended to 31 December 2007 by the Terrorism Risk Insurance Extension Act, was renewed for seven years, until 31 December 2014 by the Terrorism Risk Insurance Program Reauthorization Act (“TRIPRA”). It established a federal assistance program to help insurance companies cover claims related to terrorist acts. TRIPRA requires that terrorist acts be covered by insurers. Despite TRIPRA, and the federal aid that it provides, the U.S. insurance market is still exposed to some significant risks in this area. Therefore, SCOR monitors very closely its exposure to the U.S.
Business of this type which contains a specific economic risk in case of financial crisis is not within the usual scope of the SCOR Global Life underwriting policy. These treaties are all in run-off and, as at 31 December 2012, cover in total approximately 0.6 million policies written by two cedants. These treaties were issued mainly in the late 1990’s and incorporate various benefit types.
There are some risks which are specific to the GMDB portfolio. Due to the nature of the product, the remaining liability is influenced by developments on the financial markets, particularly changes in the price of equities and fixed income securities, fluctuations in interest rates, and the implied volatility on equity options. The liability is also dependent on policyholder behavior, particularly on the exercise of partial withdrawal options, but also on other aspects, such as lapse behavior and the use of options to choose the underlying funds. As a retrocessionaire, SCOR Global Life is exposed to uncertainties concerning data received from its retrocedants and the original ceding companies and also due to the inherent reporting lag. SCOR Global Life is also exposed to risks inherent to the model used for the assessment of the liability under its portfolio. More information about GMDB appears in “Section 20.1.6 – Notes to the financial statements,
SCOR Non-Life ’s U.S. operations include both on-going and run-off portfolios. The latter principally consists of risks arising from various classes of insurance and reinsurance business written in the U.S. from the middle of the 1990’s to 2002 by SCOR Reinsurance Company ("SCOR Re U.S.") and General Security National Insurance Company
As stated before, the Group’s reserves and policy pricing are based on a number of assumptions and on information provided by third parties, which, if incorrect and/or incomplete, could have an adverse effect on its business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities. Despite the
Another factor of uncertainty resides in the fact that some of SCOR’s businesses are “long-tail” in nature, in particular long term care, whole life products, term assurance, longevity, workers compensation, general liability, medical malpractice or those linked to environmental pollution or asbestos exposure. For some of these businesses, it has, in the past, been necessary for SCOR to revise estimated potential loss exposure and, therefore, to reinforce the related loss reserves.
Similarly, when the Group transfers its own operational risks to insurers, it is subject to the risk of the insurers not respecting their obligations. See “Section 4.6 – Insurance of specific operational risks (excluding reinsurance activity).”
Thus, the non-respect of financial obligations, in particular the payment of premiums, return of funds withheld and payment of claims, of SCOR’s cedants, retrocessionaires, insurers, or members of pools in which it participates could negatively affect its business, present and future revenues, net income, cash flows, financial position, and potentially, the price of its securities. The specific risk linked to the default of the retrocessionaires is provided in “Section 4 .1.14 –
Insurance industry participants may seek to consolidate through mergers and acquisitions. These consolidated entities may use their enhanced market power and broader capital base to negotiate price reductions for SCOR’s products and services, and reduce their use of reinsurance, and as such, the Group may experience price declines and possibly write less business. The occurrence of any of the foregoing could have a material and adverse effect on SCOR’s business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.
Some of SCOR’s cedants’ credit models or reinsurance guidelines depend on their reinsurers’ financial rating. If SCOR’s rating deteriorates, cedants could be forced to increase their capital charge in respect of their counterparty risk on
Many of SCOR’s reinsurance treaties, notably in the U.S. and in Asia, and also increasingly in Europe, contain clauses concerning the financial strength of the Company and/or its operating subsidiaries having the contracts and beneficiating from the Group rating, and provide for the possibility of early termination for its cedants if the rating of such subsidiaries is downgraded, or when its net financial position falls below a certain threshold, or if it carries out a reduction in share capital. Accordingly, such events could allow some of SCOR’s cedants to terminate their contract commitments, which could have a material adverse effect on its revenues, net income, cash flow, financial position, and potentially, on the price of its securities.
Moreover, some of SCOR’s facilities contain conditions about its financial situation which, if not met, constitute a default and might result in the suspension of the use of current credit facilities and/or a prohibition on obtaining new lines of credit or result in the need to negotiate new LOC facilities under adverse conditions, which could have an adverse effect on its revenues, net income, cash flow and financial position, and potentially, the price of its securities.
The failure to attract or retain the necessary personnel could have a material adverse effect on SCOR’s results and/or financial condition. As a global financial services organization with a multi-centric management structure, the Group
relies, to a considerable extent, on the quality of local management in the regions and countries in which it operates. The success of its operations is dependent, among other things, on its ability to attract and retain highly qualified professional people on a global scale. Competition for such key people in most countries in which it operates is intense. SCOR’s ability to attract and retain key people, and in particular directors, experienced managers and investment managers, fund managers, underwriters and actuaries, is dependent on a number of factors, including prevailing market conditions and compensation packages offered by companies competing for the same talent. If SCOR is unable to attract or retain key personnel, this could have a material and adverse effect on its financial condition, results of operations and business.
SCOR, as every company, must comply with laws and regulations. Furthermore, as an international Group, it must take into account international laws and regulations. The level of legal or regulatory requirements depends on the country and the legal structure of the entity. The risk is that it might not respect the level of required compliance appropriate to each location and legal structure. Its reputation could be affected.
Risk management requires, among other things, policies and procedures to record properly and verify a large number of transactions and events. SCOR’s risk management policies and procedures may not be sufficient. Many of its methods for managing risk and exposures are based upon the use of observed historical market behavior or statistics based on historical models. As a result, these methods may not fully predict future exposures, which can be significantly greater than the historical measures indicate, particularly in unusual markets and environments. Other risk management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrence or other matters that is publicly available or otherwise accessible to SCOR. This information may not always be accurate, complete, upto -date or properly evaluated. Furthermore, the Group cannot exclude the possibility of exceeding SCOR’s risk tolerance limits due to an incorrect estimation of its risks and exposures. If its policies and procedures prove to be insufficient, the business, present and future revenues, net income, cash flows, financial position, and potentially, the price of its securities could be materially and adversely affected.
and amortization expenses related to goodwill and other intangible assets, all of which could material ly adversely affect
B. An insolvency of AEGON might impair the value of business acquired (value-of inforce) of SCOR Global Life
(“VOBA”) (value of inforce) and have a significantly negative impact on SCOR’s business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.
(SCOR not having always been granted complete access to exhaustive data at the time of the acquisition) and the integration work performed to date, there is a risk that all financial elements may not have been fully and/or correctly evaluated or unknown or unexpected financial risks emerge, which may have significant consequences on the initially estimated impact of the relevant acquisition on the combined Group.
4.1.14 SCOR IS EXPOSED TO LOSSES DUE TO COUNTERPARTY DEFAULT RISKS OR CREDIT RISKS
SCOR is mainly exposed to the following credit risks: A. Bond portfolios
There are three aspects of credit risk related to contracts with cedants.
Thus, the inability of its cedants to fulfill their financial obligations could affect SCOR’s current and future revenues, net income, cash flow, financial position, and potentially the price of its securities.
As part of the management of its investment portfolio, SCOR deposits the securities it owns with a number of approved custodians. In the case of default of a custodian, depending on the local regulation applicable to the custodian, all or part of these securities could become blocked.
In particular this affects the US book of business acquired in the course of the Transamerica Re acquisition. The majority of the former Transamerica Re's reinsurance contracts flow into SCOR via retrocession from Aegon companies. An
The Group, therefore, has exposure to a credit risk linked to the insolvency and to the image of its cedants, which, if this were to occur, could have an adverse impact upon its business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities
(retrocession) that allows the Group to provide capacity to its clients. SCOR tries to reduce its dependence vis-à-vis the traditional reinsurance market by entering into alternative risk transfer solutions (e.g. the multi-year securitization of catastrophic risk in the form of Insurance-Linked Securities ("ILS") and mortality swaps and the issuance of contingent capital securities). For more information on SCOR’s securitization of catastrophic risk and issuance of contingent capital securities, see “Section 6 – Business Overview, 6.1.4 Capital shield policy”. Nevertheless, SCOR is exposed to the risk that it may not be able to retrocede liabilities on economically viable terms and conditions.
The Group’s liabilities are exposed to an increase in the rate of general inflation (prices and salaries) which would require an increase in the value of non-life reserves, in particular in respect of long-tail business, e.g., general liability
In conclusion, inflation would have a significant negative impact on SCOR’s business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.
4.2 Market risk 4.2.1 SCOR FACES RISKS RELATED TO ITS FIXED INCOME INVESTMENT PORTFOLIO
The Group analyses the impact of a major change in interest rates on each of its investment portfolios and at the global level. Here, it identifies the unrealized capital loss that would result from a rise in interest rates. The instantaneous unrealized capital loss is measured for a uniform increase of 100 basis points in rates or in the event of a distortion of the structure of the yield curve. Portfolio sensitivity analysis to interest rate changes is an important risk measurement and management tool which may lead to decisions for reallocation or hedging.
Notes to the financial statements, Note 26 – Insurance and Financial Risk.”
SCOR holds in its investment portfolio a some securities related to insurance risks (e.g. Insurance Linked Securities
(ILS)). These securities can be indexed bonds ("CAT bonds"), Over-The-Counter (OTC) (e.g. Insurance Loss Warranty
(ILW) or collateralized reinsurance). Such securities could be impacted by the occurrence of insurance risks (e.g. natural catastrophe, mortality,…) that could significantly result in changes in value, or even possibility the full loss of the invested amount. These risks could also have a significant impact on the liquidity of such securities.
Currency risk is the risk that the fair value or future cash flows of a financial instrument or balance sheet amount will fluctuate because of changes in foreign exchange rates. The following types of foreign exchange risk have been identified by SCOR: A. Transaction risk
SCOR’s main non-French legal entities are located in Switzerland, the Americas, the U.K. and Asia Pacific. The shareholders’ equity of these entities is denominated mainly in Euros, U.S. dollars, Canadian dollars or British pounds.
As a result, changes in the exchange rates used to convert foreign currencies into Euros, particularly the fluctuation of the U.S. dollar against the Euro, have had and may have in the future, an adverse effect on the Group’s consolidated shareholders’ equity. SCOR does not fully hedge its exposure to this risk. The impact of the fluctuation in the exchange rates used to translate foreign currencies into Euros on its consolidated shareholders’ equity is described in “Section 20.1.5 – Consolidated Statements of Changes in Shareholders’ Equity.”
Acquisition costs, including commissions and underwriting costs, as well as the VOBA for life reinsurance, and the contractual rights with clients are recognized as assets subject to the profitability of the contracts. They are amortized on the basis of the residual term of the contracts in Non-Life, and on the basis of the pattern of recognition of future margins for Life contracts. As a result, the assumptions considered concerning the recoverable nature of the deferred acquisition costs, are affected by factors such as operating results and market conditions. If the assumptions for recoverability of
Notes to the financial statements, Note 1 – Accounting Principles and Methods; Note 3 – Acquisitions; Note 4 –
Some facilities SCOR uses to grant letters of credit to cedants require a 100% collateral in case of non-compliance with financial covenants or in case of a decrease in the Group’s financial strength rating. Significant changes in the Group’s solvency or rating could force it to collateralize these facilities at 100%, which would thus result in a deterioration of its liquidity level. Additional information on SCOR’s letter of credit facilities is included in “Section 20.1.6 - Notes to financial statements, Note 25 – Commitments Received and Granted.”
Disruptions, uncertainty or volatility in the capital and credit markets may also limit the Group’s access to capital required to operate its business, most significantly its insurance operations. Such market conditions may limit its ability to :  replace, in a timely manner, maturing liabilities;  satisfy statutory capital requirements;
 generate fee income and market-related revenue to meet liquidity needs;  access the capital necessary to grow its business.
dated 16 November 2005, by ordinance n. 2008-556 of 13 June 2008 and application decrees n. 2008-711 of 17 July 2008 and n. 2008-1154 of 7 November 2008, as well as a regulation (arrêté) of 7 November 2008. The 2005
States of the European Union, and gives national legislators the option to set more stringent requirements. The national provisions adopted for the implementation of this Directive and their interpretations, as well as other legislative or regulatory changes, increase the harmonization of regulations governing reinsurers with the regulations governing insurers. These new regulations may increase solvency margin obligations, thereby restricting SCOR’s underwriting capacity.
Unanticipated developments in accounting practices may require SCOR to incur considerable additional expenses to comply with such developments, particularly if it is required to prepare information relating to prior periods for comparative purposes or to apply the new requirements retroactively. The impact of potential changes in accounting practices cannot be predicted but may affect the calculation of net income, net equity and other relevant financial statement line items and the timing of when impairments and other charges are tested or taken. In particular, recent guidance and ongoing projects put in place by standard setters globally have indicated a possible move away from the current insurance accounting models toward more “fair value” based models which could introduce significant volatility in the earnings of insurance industry participants. This could have a material adverse impact on SCOR’s business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.
On 21 July 2010, the Dodd-Frank Act was enacted and signed into law. The Dodd-Frank Act effects sweeping changes to financial services regulation in the U.S. The Dodd-Frank Act establishes the Financial Services Oversight Council
Council regarding insurers to be designated for more stringent regulation. The Dodd-Frank Act also authorizes the federal preemption of certain state insurance laws in limited instances. The FSOC and FIO are authorized to study, monitor and report to Congress on the U.S. insurance industry and the significance of global reinsurance to the
– II. Internal control and risk management procedures, C. Principal activities and participants of risk control” for further information on risk mitigation actions.
4.4.5 CAPITAL AND LIQUIDITY MAY NOT BE COMPLETELY FUNGIBLE BETWEEN DIFFERENT REGULATED LEGAL ENTITIES, WHICH MAY HAVE NEGATIVE CONSEQUENCES FOR THE LEGAL ENTITIES.
SCOR’s regulated legal entities must satisfy local regulatory capital requirements and must have sufficient liquidity to pay claims and expenses. In certain circumstances, and depending on local regulations, it may be difficult to transfer capital or liquidity to a legal entity which could have negative consequences for the legal entity concerned and have a material adverse impact on SCOR’s business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.
The “Solvency II” European Directive, no. 2009/138/EC of 25 November 2009, related to the solvency standards applicable to insurers and reinsurers ("Solvency II Directive"), lays down, at the level of individual companies and at the level of groups, the minimum amounts of financial resources that insurers and reinsurers operating in the European
Europe. SCOR has to review its regulatory capital structures and implement the systems, processes and cultural changes necessary to meet the new requirements.
January 2014, but there could be further delays. The legislative process setting down the final versions of the Solvency II
An unfavourable outcome in one or more of the court or arbitration proceedings described above could have a material adverse impact on SCOR’s business, present and future revenues, net income, cash flows, financial position, and potentially, on the price of its securities.
There are also specific rules governing the taxation of policyholders. SCOR will be unable to accurately predict the impact of future changes in tax law on the taxation of life insurance in the hands of policyholders. Amendments to existing legislation (particularly if there is the withdrawal of any tax relief or an increase in tax rates) or the introduction of new rules may affect the future long term business and the decisions of policyholders. The impact of such changes upon the Group might depend on the mix of business in force at the time of such change and could have a material adverse effect on its business, results of operations and/or financial condition.
The price at which SCOR’s Ordinary Shares will trade may be influenced by a large number of factors, some of which will be specific to the Group and its operations and some of which will be related to the insurance industry and equity markets generally. As a result of these factors, investors may not be able to resell their Ordinary Shares at or above the prices which they paid for them. In particular, the following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of Ordinary Shares:  a degrade or rumored degrade of SCOR’s solvency, credit or financial strength ratings, including placement on credit watch;  potential litigation involving the Group or the insurance or reinsurance industry generally;  changes in financial estimates and recommendations by securities research analysts;  fluctuations in foreign exchange rates and interest rates;  the performance of other companies in the insurance or reinsurance sector;  regulatory and legal developments in the principal markets in which SCOR operates;  international political and economic conditions, including the effects of terrorism attacks, military operations and other developments stemming from such events and the uncertainty related to these developments;  investor perception of SCOR, including actual or anticipated variations in its revenues or operating results;  SCOR’s announcements of acquisitions, disposals or financings or speculation about such acquisitions, disposals or financings;  changes in dividend policy, which could result from changes in SCOR’s cash flow and capital position;  sales of blocks of SCOR’s shares by shareholders; and
 Liability risks are mostly covered at Group level and include civil liability risks related to the operation of the company caused by employees and real estate, professional liability risks and civil liability risks of directors and officers.
Generally speaking, the insurance covers mentioned in this section illustrate the Group policy of transferring some of its own risks.However ,these insurance covers remain subject to the provisions of corresponding contracts, specifically those regarding possible sub-limits of cover, particular deductibles, geographic scope of cover and/or particular exclusions.
S.A. on 16 October 1989, to SCOR on 13 May 1996, then to SCOR SE on 25 June 2007.
Pursuant to French law, the duration of a company is for a limited term that cannot exceed 99 years. The Company’s bylaws (statuts) provide that the current term will expire on June 30, 2024. Prior to such expiration date, the shareholders of the Company (in extraordinary shareholders’ meeting) will be asked to vote upon the extension of the duration of the Company for an additional period of up to 99 years. Such further extension is typically approved by shareholders and we expect that the duration of the Company will be extended again prior to the expiration of the current term.
On 24 May 2007, the annual General Shareholders’ Meeting approved the conversion of the Company into a European
Following approval of this conversion, SCOR SE is registered with the Nanterre Trade and Companies Register under the corporate name SCOR SE and has taken the form of a European company as at the date of such registration.
proportion of the voting rights held by each shareholder in the Company has not been affected by the conversion into a
Eurolist market of Euronext Paris. As at the date of this Registration Document, the SCOR SE shares are also listed on the SIX Swiss Exchange (formerly SWX Swiss Exchange) in Zurich since 8 August 2007. The Company’s American
Depositary Shares which were listed on the New York Stock Exchange since 11 October 1996 were delisted on 14 June 2007 and the Company’s securities were deregistered with the Securities and Exchange Commission (SEC) on 4
On March 6, 2010, STOXX announced the addition of SCOR SE to its “EuroStoxx Select Dividend 30” index of the 30 most attractive European companies in terms of dividends. The underlying component data (new numbers of shares and free-float factors) for all indices were announced on March 12, 2010 after the close of European markets. The listing became effective on March 19, 2010 after the close of the European markets. SCOR SE was chosen as one of five new securities to join the EuroStoxx Select Dividend 30".
Specific provisions apply to the reinsurance activity of SCOR. Under the Reinsurance Directive 2005/68/EC dated 16 November 2005, implemented into French law by ordinance n. 2008-556 of 13 June 2008 and application decrees n. 2008-711 of 17 July 2008, and n. 2008-1154 of 7 November 2008, as well as regulation (arrêté) of 7 November 2008, reinsurance companies and their subsidiaries situated in a country within the European Economic Area ("EEA"), are subject to state control, under the conditions defined by Book III of the French Insurance Code. The Reinsurance
The main provisions are:  French companies, whose exclusive business is reinsurance, can only practice after having obtained an administrative license, issued by the Autorité de Contrôle Prudentiel (ACP - prudential control Authority) and published in the Official Journal. The licenses for SCOR SE, SCOR Global Life SE and SCOR Global P&C SE
 the authorized reinsurers in France can thus operate in the EEA relying on the freedom to provide services and/or on establishment (branches).
 European reinsurance companies are under an obligation to meet the defined regulatory solvency demand, to establish a guarantee fund and to put a permanent internal control policy in place.
 the obligation imposed upon reinsurers, to establish an adequate solvency margin, aims to protect the insurance companies, and hence, the consumers, in order to ensure that in the event of a decline in business or in investment income, the reinsurance companies have additional reserves, protecting those interests and consequently, the policy holders, while providing both executives and oversight and regulatory authorities with sufficient time to resolve the problems that have arisen.
Ireland are regulated by the Central Bank of Ireland. In Sweden, the Group transformed its Swedish subsidiary into a branch which, as at 2013, is no longer regulated by the Swedish FSA.
SCOR offers Life and property and casualty coverage within the Asia Pacific region through a network of subsidiaries, branches, and service companies. It operates in Singapore, Hong Kong and Australia through subsidiaries. The Group also operates in Australia, China, India, New Zealand, Malaysia, Taiwan, Japan and Korea through branches or service companies. In the region, each entity is subject to local supervision regardless of legal form. The Asia Pacific region is made up of a number of widely differing and independent markets. Each has its own regulatory structures and SCOR
Réassurance. SCOR rapidly developed in various world markets, building up a substantial international portfolio.
In 2000, SCOR acquired Partner Re Life, a U.S. life reinsurer,, thus gaining a platform from which to expand its then existing life reinsurance business in the U.S. market.
In 2002, SCOR’s subsidiary, Investors Insurance Corporation, or "IIC", signed a cooperation agreement in the life reinsurance business with the Legacy Marketing Group of California for the distribution and management of annuity products in the U.S. IIC was sold in July 2011.
On 10 January 2007, SCOR increased the level of its investment (which stood at 10.2% since 1994) to 39.7% of the share capital and 40.2% of the voting rights of ReMark Group BV (“ReMark”) and on 22 August 2007, SCOR Global Life
Following the acquisition of Converium's control, SCOR became the world’s fifth-largest global multi-line reinsurer
Hubs were progressively implemented:  on 5 May 2008 for the Cologne Hub;  on 20 May 2008 for the London Hub;  on 18 June 2008 for the Americas Hub;  on 27 June 2008 for the Singapore Hub;  on 27 January 2009 for the Zurich Hub;  on 24 February 2009 for the Paris Hub.
For more information on the Hub structure, see “Section 7.1.1.5 - " Structuring in Hubs”
SCOR’s investments portfolio and implements the investment strategy as determined by the Group’s Investment
Committee chaired by the Group Chairman and Chief Executive Officer. SCOR Global Investments SE was approved by the French market regulator (Autorité des marchés financiers or “AMF”) as a portfolio management company with effect from 15 May 2009. As a regulated asset management company, SCOR Global Investments SE carries out its activities on an arms-length basis and with the operational independence required under Article L. 214-9 of the French monetary and financial code
On 18 July 2009, SCOR Global Life US Reinsurance Company, a wholly-owned subsidiary of the Group, reached a definitive agreement to acquire XL Re Life America Inc., a subsidiary of XL Capital Ltd, for an amount of EUR 31 million.
On 25 July 2011, in line with its strategic plan for the period 2012-2013 "Strong Momemtum", SCOR decided to extend and strengthen its value-added service offering for its insurer clients. To this end, SCOR Global Life, which already held 50% of the capital of SOLAREH SA, acquired the remaining 50% by purchasing shares from Solareh International Inc.
The transaction also includes the acquisition of an Irish legal entity, which underwrites Transamerica Re business. The total consideration for the acquired business amounts to USD 919 million, including a statutory capital of USD 497 million for the Irish entity at the closing date. Refer to section Section 20.1.6 – Notes to the consolidated financial statements - Note 3 – Acquisitions and disposals for further information on the price development. This acquisition was financed without issuance of new shares. Transamerica Re is the world’s 3rd largest Life reinsurer in the U.S. based on the volume of its business in 2009 and the 7th largest reinsurer based on its net earned premium in 2010. SCOR Global
On 10 September 2012, SCOR successfully placed on the Swiss franc market perpetual subordinated notes with a first call date in June 2018, for an aggregate total amount of CHF 250 million.On 24 September 2012, SCOR successfully increased its recently placed perpetual subordinated notes by CHF 65 million to a cumulated issuance of CHF 315 million, following the strong market demand.
SCORLUX SICAV-SIF, established by SCOR Global Investments and dedicated to investments in SICAV funds.
Refer to Section 4.2.1 –SCOR faces risks related to its fixed income investment portfolio - and 4.2.2 – SCOR faces risks related to our equity based portfolio, for a description of risk management connected with its investments in debt instruments and equity securities - and 4.2.3 - SCOR is exposed to other risks arising from the investments it owns.
SCOR's success relies on the consistent implementation of the four principles on which its strategic plans, Dynamic Lift and now, Strong Momentum, are based, i.e. a high diversification, a robust capital shield, a strong franchise and a controlled risk appetite. Success in implementing such a strategy requires that, at regular intervals, the Group assesses whether opportunities which may present themselves relating to the optimization of its business portfolio via acquisitions and cessions and which would be likely to deliver value for its shareholders are in line with this consistent set of principles. Thus, the closing of such operations should only occur within this consistent framework, for the best interest of SCOR SE.
6.3 Extraordinary events influencing the principal business and markets 69 6.4 Dependency of the issuer with respect to patents or licenses, industrial, commercial or financial contracts and new manufacturing processes 70 6.5 Information on SCOR’s competitive position 70
In September 2010, SCOR launched a new three-year Strategic Plan, known as “Strong Momentum,” which replaced its previous strategic plan for 2007-2010, known as “Dynamic Lift.” On 7 September 2011, SCOR presented to the public an update of its Strong Momentum plan called Strong Momentum "SMV1.1". SMV1.1 took into account the August 2011 acquisition of the mortality reinsurance business of Transamerica Re, the July 2011 sale of IIC which was SCOR's U.S.
The Group's strategy is based on a moderate risk appetite, both on the underwriting side and on the asset side. SCOR
Treasury bills in the Euro area, the U.S., U.K., Canada and Switzerland averaged over the period under consideration.
Momentum" Season 3. "Strong Momentum" Season 3 presented updated information and analyses demonstrating that the Group is consistently delivering on its promises and is well positioned to seize new profitable growth opportunities, leveraging on its competitive advantages.
 Improved solvency and recent A+ upgrades confirm SCOR's capacity to provide an AA level of security to its clients
 SCOR Global P&C exceeds "Strong Momentum V1.1" technical profitability assumptions, confirming an ongoing positive trend.
Financial Statements - Notes to the consolidated financial statements, Note 8 - Derivative assets.”
The Company’s Board of Directors may vary the amount and the composition of risk that the Group is prepared to take.
“operating segments” in its consolidated financial statements, included in Paragraph 20.1.6. However, in accordance with longstanding management convention, the Group uses the term “divisions” in this Registration Document, rather than “operating segments.” Each operating division underwrites different types of risks and offers different products and services, which are marketed via separate channels; responsibilities and reporting within the Group are established on the basis of this structure.
(including Credit & Surety, Inherent Defects Insurance, Aviation, Space, Marine, Engineering, Agriculture and Structured
The SCOR Global Life division offers the following lines of business: Life (treaties with mainly mortality risks); Life
Longevity reinsurance was previously reported as part of the Life line of business.
Document and in the consolidated financial statements, included in Paragraph 20.1.6, was revised to reallocate expenses to Group Functions.
Cologne and London for Europe, Singapore for Asia and New York / Charlotte for the Americas Hub. Each of the Hubs has local, regional and Group responsibilities, with heads of each Hub reporting to the Group Chief Operating Officer.
Finance, a Head of Human Resources and a Risk Manager. Hub shared service costs are allocated to the divisions based on a headcount allocation key. For a description of the Hub structure, see “Paragraph 7.1.1.5 - Structuring in
SCOR Global P&C and SCOR Global Life, through their respective legal entities, are leading global reinsurers, executing an underwriting policy focused on profitability, developing value-added services and adhering to a cautious financial policy. As at 31 December 2012, the Group serves more than 4,000 clients throughout the world. SCOR’s strategy of offering both non-life and life products provides it with well-balanced diversification benefits (both in terms of risks and markets), which represent a key cornerstone of its strategy.
incorporated in France, SCOR Global Life SE, which has branches in Germany, the U.K., Italy, Spain, Switzerland,
Americas in the U.S. and its network of entities and representative offices in North and South America, SCOR Global
Life Reinsurance Ireland and SCOR International Reinsurance Ireland Ltd. in Ireland, composite subsidiaries and branches (which also operate in the Non-Life division) in Russia, South Africa, China and South Korea, and subsidiaries in Europe, Australia and South Africa. As per 1 January 2013 the business of Sweden Re, a subsidiary of SCOR Global
payment of commercial debts. Surety insurance is a contract under which a guarantor makes a commitment to a beneficiary to perform the obligation to ensure payment by or to pay the debt of the secured debtor. Political risk insurance covers the risk of losses due to measures taken by a government or similar entity which endangers the existence of a sales contract or commitment made by a public or private citizen of the country in which the covered operations are performed. SCOR underwrites these risks through proportional and non-proportional treaties as well as facultative reinsurance.
Insurance for shipping risks includes insurance for hull, cargo and liability for the ships and shipped merchandise as well as shipbuilding insurance. It also includes insurance for offshore oil and gas fixed and mobile units in construction and in operation. Within the Marine Specialty Line, SCOR underwrites these risks mainly through treaties and occasionally through facultative reinsurance.
and finance and services (infrastructures, intellectual services, general contractors, distribution and trading).
Industrial clients are particularly sensitive to the ratings of the reinsurers that cover their risks. See “Paragraph 4.1.9
SCOR's Joint Ventures and Partnerships business area has historically included the provision of capital to third party businesses, including Lloyd’s syndicates. SCOR contributes to 12 Lloyds syndicates, including the new syndicate
SCOR’s Life division is divided into nine lines of business:  Life;  Life Financing Reinsurance;  Disability;  Long-Term Care;  Critical Illness;  Health;  Annuities; and
Life Financing Reinsurance combines proportional traditional Life reinsurance with financing components providing liquidity, balance sheet and income statement improvements to the client. This type of treaty is typically used in connection with new business, special reserves, solvency or other needs. Life Financing Reinsurance necessarily involves biometric risks. Pre-financed amounts are amortized from the profitability of the reinsured business.
The purpose of disability insurance is to mitigate the loss of income when the insured is totally or partially unable, by reason of sickness or accident, to follow his or her professional occupation or any occupation for which he or she is suited.
Long-Term Care (“LTC”) insurance covers policyholders unable to perform predefined activities of daily living, and as a result, needing the constant assistance of another person. SCOR Global Life has been pioneering LTC reinsurance solutions in the French market for approximately twenty years, and has acquired sound practical experience in dealing with problems related to underwriting and managing LTC risks. The Group believes that one of the main private LTC
insurance markets is France with over two million lives and it believes that SCOR Global Life enjoys a leading position in the French market. At the forefront of industry development, SCOR Global Life is now expanding its geographical scope in LTC by introducing its LTC reinsurance coverage to several markets. It already enjoys strong positions in Korea and
SCOR Global Life was until the sale of this business on 18 July 2011 present in the fixed annuity market in the U.S., as a reinsurer of IIC, a member of the Group. The products provided either the performance of an index (often the S&P
Longevity refers to producs with risk of negative deviation from expected results due to the insured or annuitant living longer than assumed in the pricing of the insurance cover. This activity includes annuity and long-term care covers.
The Group's underwriting teams are supported by the SCOR Global P&C Underwriting Management function, located in the Group’s Paris Hub. This function provides worldwide treaty and facultative underwriting guidelines, policies regarding the delegation of capacity, underwriting support to specific lines of business or individual risks when required, ceding company portfolio analysis and risk surveys and is responsible for monitoring and referral of non-standard business and for authorizing exemption to the underwriting guidelines.
Cases which may have a significant impact on the balance sheet of the Group are additionally reviewed by the Group
Actuarial and Underwriting Department to analyze and assess the key factors underlying mortality/longevity, Long-Term
For the year ended 31 December 2012, Non-Life wrote approximately 65% of gross written premiums through brokers and 35% through direct business, while Life wrote approximately 10% through brokers and 90% through direct business.
Benfield with approximately 3% of the Life total gross written premiums and Willis with approximately 1%. For Non-Life, the largest brokers that the Group used were AON Benfield with approximately 22% of its Non-Life total gross premiums written, Guy Carpenter with approximately 12% and Willis Gras Savoye with approximately 9%.
The Group makes extensive use of proprietary external models from industry-leading catastrophe model suppliers, including Risk Management Solutions RiskLink® (“RMS”) and AIR Worldwide Catrader® (“AIR”), and licenses all the region/peril combinations available from each vendor. In addition, it has access to local cat model expertise for Australia from Risk Frontiers, a commercial provider of tools developed at Macquarie University. Access to multiple external models allows the Group to better appreciate the strengths and limitations of each model and make adjustments where appropriate, and it is well equipped with alumni from the main model providers.
See Section 9 Operating and Financial review for certain data regarding SCOR's catastrophe loss experience
Accumulations of risk particularly exposed to catastrophes or other significant events in the life business are regularly assessed in group-wide extreme scenarios. Every year, limits for the acceptance of specific catastrophe covers by market are reviewed taking into account the capacities obtained by the retrocession coverage purchased by the Group.
SCOR is making use of the RMS model for infectious diseases in order to assess the exposure to catastrophe risk arising from global and regional pandemics. This exposure is monitored throughout the year against SCOR’s defined risk limits and used for decisions on mitigating measures. Specifically designed retrocession programs aim to protect its life reinsurance business. One program protects assumed catastrophe excess of loss acceptances; the other protects the retained lines in respect of all other acceptances.
Aggregate portfolio exposures are continually monitored. Specialized information technology software, developed by
The Non-Life and Life reserves adequacy is controlled by internal actuaries who make a quarterly review and annual detailed reports, validated by the Group Chief Actuary. External consulting firms also review on an annual basis the Non-
Life reserves. Life reserving assumptions are reviewed as well by an external firm in the framework of the embedded value calculation. If necessary, internal audits of its portfolios are performed. Centrally defined and tightly controlled reserving process, strong portfolio diversification, prudent reserving policy, sound reserving tools and, state of the art actuarial methods used by highly skilled professionals and high level of transparency, both internally and externally, tends to minimize the risk of inadequate reserves.
See "Paragraph 4.1.5 - If SCOR's reserves prove to be inadequate, its net income, cash flow and financial position may be adversely affected" for further information on reserves.
When a claim is reported to the ceding company, its claims department establishes a reserve corresponding to the estimated amount of the ultimate settlement for the claim. The estimate is based on the cedant’s own methods of evaluation. The ceding company reports the claim and its suggested reserve amount to the Group entity with which it concluded its contract of reinsurance. The Group records the ceding company's suggested reserve and is free to establish greater or smaller reserves based on the review and analysis by the Group's claims division and internal actuaries. Such greater or smaller potential reserves are based upon the consideration of many factors, including the
As a consequence of the uncertainties described above regarding the correct reserving of risks and their annual revision in Life and Non-Life, there can be no assurance that the Group will not have to increase its reserves in the future, or that the reserves constituted by the Group will be sufficient to meet all its future liabilities, which could materially impact its current and future revenues, net income, cash flow, financial position, and potentially, the SCOR share price.
requests that certain of its retrocessionaires provide that all or a portion of the receivables from its retrocession contracts be supported by collateral (cash deposits, letters of credit, pledging of securities etc.) in its favor. For further information see "Paragraph 4.1.6 - Risk Factors - SCOR may be adversely affected if its cedants, retrocessionaires, insurers or members of pools in which it participates do not respect their obligations" and "Paragraph 4.1.14 - Risk factors - SCOR
is exposed to losses due to counterparty default risks or credit risks".
Retrocession procedures are centralized in the retrocession function of the Non-Life division. The level of retrocession is selected each year to ensure that SCOR's retained risk profile respects the specific Group risk tolerance limits, to help achieve its return on capital and solvency objectives. The Group utilizes a variety of retrocession agreements with nonaffiliated retrocessionaires to control its exposures to large property losses. In particular, it has implemented an overall program set in place on an annual basis that provides partial coverage for up to three major catastrophic events, natural or not, within one occurrence year. A major event is likely to be a natural catastrophe such as an earthquake, a windstorm, a hurricane or a typhoon in a region where SCOR has major aggregate exposures stemming from the business written.
See "Paragraph 4.1.15 - Risk Factors - SCOR is exposed to the risk of no longer being able to retrocede liabilities on economically viable terms and conditions” and “Paragraphe 4.1.2 – SCOR is exposed to losses from catastrophic events” for more information on the risks related to the retrocession.
The Group seeks to reduce its dependence on traditional retrocession and diversify its strategy in light of a potentially continued volatile retrocession market by using alternative risk transfer solutions, which includes the securitization of catastrophic risk in the form of ILS. Accordingly, on 21 December 2006, SCOR signed a multi-year catastrophe property retrocession agreement with Atlas III Capital Limited, a special purpose vehicle organized pursuant to the laws of Ireland and financed by the issuance of a catastrophe bond (“cat bond”). The purpose of Atlas III was to provide EUR 120 million in additional retrocession coverage for SCOR SE and its subsidiaries against exposure to storms in Europe and earthquakes in Japan, the losses of which were determined by a model over a period running from 1 January 2007 to 31 December 2009. Continuing this strategy to diversify retrocession sources, the Group issued two similar cat bonds,
160 million in additional retrocession coverage for SCOR SE and its subsidiaries against exposures to storms in Europe and earthquakes in Japan, and, in three series, Atlas V Capital Limited (“Atlas V”) on 19 February 2009 for a term of three years providing USD 200 million in additional retrocession coverage for SCOR SE and its subsidiaries against exposure to earthquakes and hurricane in the U.S. and Puerto Rico.
The Group succeeded in the renewal of its retrocession programs in 2010 and 2011. On 9 December 2010, SCOR
Atlas IV property retrocession agreements were accounted for as reinsurance contracts (See "Paragraph 20.1.6
Financial Statements - Note 1 (N) Classification and accounting of reinsurance contracts). Due to the absence of ultimate loss clause, catastrophe agreements with Atlas V Capital Limited, Atlas VI Capital Limited Series 2010-1, 20111 and 2011-2 have been accounted for as derivatives and are considered as balance sheet protection. See " Paragraph 9.2.4 Capital shield policy."
Atlas Reinsurance VII Limited is an Irish reinsurance vehicle. Aon Benfield Securities Inc., Natixis and BNP Paribas managed the transaction and the book on the deal. Standard & Poor's rates Atlas VII Class A Notes at BB-, and Atlas VII
using the PERILS index. These Atlas VII catastrophe retrocession agreements will be accounted for as reinsurance contracts in 2013 (See "Paragraph 20.1.6 Financial Statements - Note 1 (N) Classification and accounting of reinsurance contracts).
In 2008, SCOR Global Life SE signed a four-year mortality swap with an affiliate of J.P. Morgan Chase & Co. pursuant to which SCOR would have received cash up to a nominal amount of USD 100 million and EUR 36 million in the event of a significant rise in mortality rates due to major pandemics, natural catastrophes or terrorist attacks. In 2009, SCOR
As part of the “Capital shield” policy of the Group, contingent capital securities were issued, which are considered as tools of last resort. See "Paragraph 20.1.6 Financial Statements - Notes to the consolidated financial statements, Note 8 - Derivative assets.”
Executive Officer and is composed of the Group Chief Financial Officer, the Group Chief Risk Officer, the Chief
SCOR is exposed to equity price risk on its equities portfolio. The Group's goal in managing its equities portfolio is to develop a diversified portfolio of high-quality equities that will appreciate over the medium term. It also seeks equities which offer high dividends or are equities which it believes are likely to appreciate in value based on increases in inflation. Equities selection is therefore predominantly based on an analysis of the underlying fundamentals.
To measure the risk, an assumed “equity” beta of 1 is generally used. This assumes that the whole portfolio varies homogeneously and with the same magnitude as the equity market. SCOR therefore uses an instantaneous change in the equity market as a measure of the change in the unrealized capital gains or losses of the equity portfolio.
At 31 December 2012, SCOR’s total investments and cash were EUR 22,580 million (EUR 21,429 million as at 31 December 2011). The 2012 increase in total investments and cash as compared to 2011 was mainly due to positive
Unrealised Gains and Losses (URGL) developments within SCOR’s invested assets and the investment of the Group’s strong operating cash flows.
The duration of SCOR’s fixed income portfolio including short term investment increased slightly from 2.6 years at 31
In terms of credit quality, despite the downgrade of several sovereign and private issuers, the Group maintained the quality of its fixed income portfolio including short term investments, to a high level with an average rating of “AA-” as at 31 December 2012 against an average rating of “AA” last year. In this Registration Document, when the Group refers to the ratings of securities held in its investment portfolio, or the counterparty credit rating of the issuers of such securities, it uses an average of available ratings of the relevant securities and/or issuer published by the applicable nationally recognized statistical rating organizations.
Germany, France, the Netherlands and the UK. As at 31 December 2012 SCOR had no government bonds exposure to
SCOR's total exposure to covered and agency MBS in its investment portfolio was EUR 1,359 million at 31 December 2012. SCOR's total exposure to corporate bonds in its investment portfolio was EUR 3,997 million at 31 December 2012, of which exposures to Greece, Ireland, Italy, Portugal, and Spain was EUR 71 million, primarily in
Italy. SCOR's total exposure to structured and securitized products in its investment portfolio was EUR 750 million at
The portion invested in real estate investments increased from EUR 499 million at 31 December 2011 to
EUR 584 million at 31 December 2012, due to acquisitions of new buildings.
Notes to the consolidated financial statements, Note 6 - Insurance Business Investments". For a table summarizing the investment income of SCOR for the years ended 31 December 2012, 2011 and 2010 see “Paragraph 20.1.6 - Notes to the consolidated financial statements, Note 20 – Investment income.”
Fair value through income equity investments 160 0.7% 89 0.4% 31 0.1%
Fair value through income fixed income 56 0.2% 38 0.2% 9 0.1%
Loans and receivables (excluding short term investments) 8,266 36.7% 8,098 37.9% 7,639 36.6%
See Paragraph 20.1.6 - Notes to the financial statements, Note 6 - Insurance Business Investments for a breakdown of amortized costs and estimated fair values of fixed income investments by major type of security, including fixed income securities held to maturity and available for sale as at 31 December 2012, 2011 and 2010.
The following table presents SCOR’s fixed income securities by counterparty credit quality, including fixed income securities classified as trading, at 31 December 2012 and 2011: As at December 2012 As at 31 December 2011
SCOR is characterized by its strategic positioning aimed at underwriting risks so as to diversify exposure. To this end, the Group seeks to preserve:  the diversification of its business by maintaining a broadly balanced business division split between Life and
 the diversification of underwritten risks in Life reinsurance by line of business (Life, Life Financing Reinsurance,
Disability, Long-Term Care, Critical Illness, Health, Annuities, Personal Accident, and Longevity), and in Non-
The following table shows the breakdown by gross volume of Life and Non-Life premiums written by geographic area based on the country in which the ceding company operates for treaty business and location of the insured for facultative business:
On 9 May 2012, Moody's Investors Service upgraded the insurance financial strength ratings (IFSR) of SCOR SE
(SCOR) and various guaranteed subsidiaries to A1 from A2, and SCOR's subordinated debt rating to A3 from Baa1. All ratings have a "stable outlook".
"a+". They also affirmed the Financial Strength Ratings of "A" (Excellent). The outlook for all ratings is stable.
On 27 April 2011, Standard & Poor's Ratings Services affirmed its 'A' long-term counterparty credit and insurer financial strength ratings on, as well as on SCOR's guaranteed subsidiaries. The outlook on all entities remained positive.
On 6 March 2010, STOXX announced SCOR’s addition to its “EuroStoxx Select Dividend 30” index. The underlying component data (new numbers of shares and free-float factors) for all indices have been announced on 12 March 2010 after the close of European markets. The listing became effective on 19 March 2010 after the close of the European markets. SCOR SE was chosen as one of five new securities to join the EuroStoxx Select Dividend 30 (which is an index listing the 30 most attractive European companies in terms of dividends).
Among the Group’s major competitors there are European reinsurers (for example, Swiss Re, Munich Re and Hannover
The 1 January 2012 renewals were concluded after a year marked by an exceptional series of natural catastrophes, which included a number of different events with varying levels of severity. Throughout the past year, SCOR has demonstrated the soundness of its business model, based on diversification that is simultaneously high and controlled.
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).
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
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.
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%)
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
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.
 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%
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%).
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.
 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+”.
 Agriculture business represented a significant part of the June-July renewals, much of it from Latin America.
In 2012, SCOR Global Life continued with the process to integrate the portfolio and organization acquired from
Transamerica Re into SCOR Group. This includes the combination with the existing business and organization of SCOR
In 2012, SCOR Global Life increased its new business premium compared to 2011, with emerging markets (such as
In 2012, critical illness, disability and personal accident were the lines of business showing the strongest premium growth within the SCOR Global Life portfolio, with both new treaties and increased business with existing clients as the main drivers. The strong premium increase of 34.4% in life business compared to 2011 was driven by the full year contribution of the portfolio from Transamerica Re acquisition compared to 5 months after the acquisition as per 9
The solid operating profitability of SCOR Global Life was achieved thanks to a robust technical performance across most regions and lines of business.
The total number of SCOR Global Life clients amounts to approximately 1,900 after the Transamerica Re acquisition.
Branches of SCOR Global Life SE: Spain, Italy, The Netherlands, United Kingdom, Germany, Austria, Switzerland,
7.1 Brief description of the Group and of the position of the issuer 7.1.1 GROUP OPERATING COMPANIES
The Group is a twin engine group driven by SCOR Global Life and SCOR Global P&C. Mobilization of skills and expertise, a balance among teams from different entities of the Group, operating efficiency, simplicity of structures, and clarity of reporting lines were the principles that guided the Group's organisational choices.
P&C SE. The latter carries out its operations through European branches in Spain, Italy, Switzerland, the U.K. and
Germany, and a network of dedicated subsidiaries, branches and representative offices in the U.K., the Americas and Asia-
Pacific, as well as composite Non-Life/Life subsidiaries and branches in Russia, South Africa, China, Hong Kong and South
Sweden, Canada and in Asia, representative office in Belgium as well as through SCOR Global Life Americas in the U.S.,
Africa, China and South Korea and subsidiaries in Europe, Australia and South Africa.
and its subsidiaries are presented in:  Section 19 – Related Party Transactions, and in
SCOR launched and completed several major restructuring projects between 2005 and 2010. These reorganizations were undertaken in order to simplify the legal structure of the Group and clearly differentiate between the operations of subsidiaries that are dedicated respectively to Life reinsurance and Non-Life reinsurance, with a view towards optimal annual allocation of capital between the operations.
Italy, in Spain, in Switzerland and in Germany through its branches, as SCOR Global Life SE does. SCOR Global P&C SE
has been the first company in Europe to complete a tripartite merger involving three different jurisdictions in the formation of a Societas Europaea.
The adoption of the European Company statute by SCOR SE, SCOR Global P&C SE and SCOR Global Life SE, occurred respectively on 25 June, 3 August and 25 July 2007, the registration dates for each company as a Societas Europaea with the Nanterre Trade and Company Register. This registration occurred after: (i) the completion of the negotiations on the involvement of the employees in the various European companies, as stipulated by the legislation governing a European company, with the special negotiation group (“SNG”) formed for this purpose in July 2006, and representing the employees of the Group; an agreement on the involvement of the employees within SCOR SE and SCOR Global P&C SE was signed with the SNG on 14 May 2007; and (ii) the approval by the Extraordinary Shareholders’ Meeting of each of the compan ies of the adoption of the Societas Europaea statute.
Europe, improve flexibility in financial matters and capital allocation, simplify regulatory controls by using the possibilities offered by the Reinsurance Directive and reduce its local structures, by giving preference to the use of branches, rather than local subsidiaries. The Group is thereby demonstrating its ambition to be a company with European roots and global reach.
This legal flexibility is today demonstrated by the speed of the integration process for the European entities of Converium, which became SCOR Holding (Switzerland), in SCOR’s European companies. SCOR Global Investments SE has also been incorporated as a Societas Europaea.
North American activities of SCOR Global Life, regrouped in New York (NY) and in Dallas (Texas).
Further to the acquisition, on 9 August 2011, of the mortality reinsurance business of Transamerica Reinsurance, SCOR
Each of the Hubs has local, regional(1) and Group responsibilities, with the heads of each Hub reporting to the Group Chief
Operating Officer. Each Hub typically includes the following functions: a Legal and Compliance Officer, a Head of
 several Group functions to be carried out in a geographical location other than Paris in order to benefit fully from the competencies within different locations;  the Group to develop a global culture while keeping local specificities.
Management reviews the operating results of the Non-Life and Life divisions individually for the purpose of assessing the operational performance of the business and to allocate resources. For more information on SCOR’s divisions, see “Section 20.1.6. Financial Statements - Notes to the consolidated financial statements, Note 2 - Segment Information.”
June 2008, in Singapore on 16 June 2008, in Zurich on 27 January 2009 and in Paris on 24 February 2009. Following the acquisition of the mortality reinsurance business, including the operational assets and personnel, of Transamerica Re,
Charlotte, North Carolina, has become a key location for the Life division. As part of the integration of the Transamerica Re business, Charlotte will join New York as a key competence center of the Americas Hub.
Paris Hub : South Africa, Russia and the whole Europe except Germany, Austria, Switzerland, Sweden and UK ; Zurich Hub : Switzerland and one subsidiary in Guernsey ; Koln Hub : Germany, Austria and Israël ; London Hub: UK, Ireland and Sweden; Singapour Hub: the whole Asia, Australia ; Américas Hub: North America and South America
Refer to:  Section 7 – Organizational structure chart;  Appendix A – 1.5 Unconsolidated Corporate Financial Statements of SCOR SE, Note 2.3 – Subsidiaries and
Group believes that the Group’s offices are adequate for its current needs.
SCOR owns in London at 10 Lime Street a 5.000 m² office and retail building. As at 31 December 2012, the building was 53% occupied by SCOR for its London Hub office. The remaining part was rented to third parties.
In Cologne, SCOR moved during Q2 2012 into its new office building with more than 6.000 m² located at 10,
Goebenstrasse, held by the German branch of SCOR SE “SCOR Rückversicherung Direktion für Deutschland,
Niederlassung der SCOR SE“, and fully occupied by SCOR (See section 20.1.6.5 Tangible assets and real estate investments).
For more information on the Group’s real estate investments, refer to Section 5.2.1 - Principal investments made over the past three financial years, Appendix A – Unconsolidated corporate financial statements of SCOR SE Note 2.1 – Changes in investments, Note 2.2 – Schedule of investments, Note 15 - Analysis of commitments given and received and Section 20.1.6
– Notes to the Consolidated Financial Statements, Note 5 – Tangible assets and real estate investments.
The 2012 results and balance sheet strength demonstrate the effectiveness of SCOR’s strategy which relies on high business and geographical diversification, focusing on traditional reinsurance activity with very limited exposure to reinsurance liabilities with economic activity risks and no material off balance sheet exposure. For the January 2013 renewals, SCOR was well-positioned to benefit from its improved industry position to combine strong premium growth and positive price changes.(Refer to “Paragraph 12 – Trend information”).
September 2010 in the “Strong Momentum” strategic plan, and confirmed in the version "Strong Momentum" season 3 presented on 6 September 2012, the Group maintained a “rollover investment strategy" for its fixed income portfolio in order to have significant financial cash flows to reinvest in the event of a sudden change in the economic and financial environment, whilst seizing market opportunities.
Positive operating cash flow amounted to EUR 761 million in 2012, compared to EUR 530 million in 2011 (and EUR 656 million in 2010) with strong contributions from both Life and P&C operations. The increase in 2012 cash flow was positively impacted by lower than expected payments for 2011 catastrophe losses by SCOR Global P&C. The 2012 operating cash flows were also impacted by tax payments and retro recoveries from prior years. The reduction in 2011 cash flow, was mainly due to SCOR Global P&C payments in respect of catastrophe losses and to timing of cash flows for SCOR Global
compared to total shareholders’ equity plus subordinated debt. The increase in the debt leverage ratio over 3 years is primarily due to debt issuances in 2011 and 2012. On 20 January 2011, SCOR successfully placed on the Swiss franc market, perpetual subordinated notes, with a first call date in August 2016, for an aggregate total amount of CHF 400 million. In addition, on 11 May 2011, SCOR reopened this note and issued an additional amount of CHF 250 million. On 10
Book value per share(2) stands at EUR 26.18 at 31 December 2012 as compared to EUR 23.83 and EUR 23.96 at
This paragraph includes comments on both the current year operating results as well as comparisons to prior years.
impact in 2011, and reduction in premium from the US Equity Index Annuity Business (EIA) due to the sale of SCOR’s US
fixed annuity business on 19 July 2011. SCOR Global Life did not write any EIA business in 2011 compared to EUR 32 million in 2010.
Net investment income(1) for the year ended 31 December 2012 amounted to EUR 566 million as compared to
EUR 624 million and EUR 690 million for the years ended 31 December 2011 and 2010, respectively (2). The net return on investments in 2012 was 2.7% compared to 3.2% in 2011 and 3.4% in 2010 (3). The decrease in investment income is mainly due to the low yield environment and higher impairments on equity portfolio. With 2012 markets characterised by high volatility and erratic behaviour, SCOR decided to continue its rollover strategy with a relatively short duration fixed income portfolio and a high liquidity level.
The total cost recorded in 2012 in other operating expenses related to Atlas Cat Bonds were EUR 50 million excluding Altas
The Group cost ratio (5), calculated as the total of all management expenses less certain non-controllable expenses (e.g. bad debts), legal settlements, brokerage commissions and amortizations, divided by gross written premium, was 5.3 % for the
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.
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
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
SCOR Global P&C is a leading P&C reinsurer with a focus on European markets and a strong position in Latin America, the
The business comprises traditional reinsurance business; Treaty, Business Solutions, and Specialty Lines. SCOR Global
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”
Losses due to catastrophes, net of retrocession (3) 307(8) 636 317
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
Adjusted estimated loss as at 31 December 2012 In EUR million
In 2010, SCOR was affected by the following catastrophes which resulted in net estimated losses greater than EUR 10 million: Cat losses Date of loss
In 2012, SCOR Global Life continued to grow profitably in a competitive life reinsurance market. It succeeded in further strengthening its long-term business relationships with existing clients and gained new business partners. In addition SCOR Global Life took a selective approach on writing new profitable business.
Asia/Pacific and Latin America remained markets with strong performance in terms of premium growth and profitability during 2012.
On 9 August 2011 SCOR acquired the mortality risk reinsurance business of Transamerica Re (see “Paragraph 5.1.5
business 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.
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
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.
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
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
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
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
31 March 2014. This transaction succeeded Atlas IV Reinsurance Limited, which matured on 31 December 2010 and provided similar geographical cover of EUR 160 million.
(1) Average investments are the quarterly averages of the Total Investments as per the “Invested assets” reconciliation table included in this note, adjusted for ceded funds withheld.
(2) Average invested assets are the quarterly averages of the Total Invested Assets as per the “Invested assets” reconciliation table included in this note.
In EUR million 2012 2011 2010 Group shareholder’s equity 4,803 4,403 4,345
Interests income and expenses on funds withheld and contract deposits 202 190 197
IFRS investment income net of investment management expenses 595 639 684
(1) Real estate financing expenses related to real estate investments (buildings owned for investments) only. They are not included in the IFRS investment income net of investment management expenses
(1) Including Atlas cat bonds, mortality swap and FX derivatives (2) Fair Value less Carrying Value of Real Estate Investments as at 31 December 2012 and 2011 (3) Real Estate financing related to real estate investments (buildings owned for investment) only
Total Expenses as per Profit & Loss account (1) (556) (438) (393)
Revaluation of assets available for sale and others (2) 97 (130) 18
For detailed calculation of combined ratio refer to table below: At 31 December
(1) Of which, other income/expenses excluded from the Combined Ratio for EUR 27 million
For detailed calculation of technical margin refer to table below: At 31 December
Refer to Section 20.1.5 – Consolidated statement of changes in shareholders’ equity and Section 20.1.6 – Notes to the consolidated financial statements, Note 13 – Information on share capital, shareholders’ equity and capital management and
Further to the drawdown, announced on 5 July 2011, by SCOR of EUR 75 million on the contingent capital facility placed at its disposal by UBS, UBS exercised the number of warrants required for the issuance and subscription by it of new SCOR
Refer to Section 20.1.4 – Consolidated statements of cash flows and Section 20.1.6. - Notes to the consolidated financial statements, Note 2 – Segment information for an analysis of principal cash flow statement items.
On 10 September 2012, SCOR placed on the Swiss franc market perpetual subordinated notes, with a first call date in
October 2018, for an aggregate total amount of CHF 250 million. On 24 September 2012, SCOR extended its placement by issuing an additional amount of CHF 65 million. The settlement of the notes of total CHF 315 million took place on 8 October 2012 (refer to Section 10.1). Refer to Section 20.1.6 – Notes to the consolidated financial Statements, Note 14 – Financial debts for a description of the subordinated loans and bonds issued by SCOR, including any reimbursements and conversion explanation that occurred during the year.
and the low financial leverage ratio reflects the Group’s treasury and financing strategy to have a strong level of liquidity..
For information on regulatory restrictions on the use of capital, refer to Section 5.1.4.2 – Legal form and applicable legislation and to Section 20.1.6.13 – Notes to the Consolidated Financial Statements, Note 13 – Information on share capital, capital management, regulatory framework and shareholders’ equity.
Financial Market Supervisory Authority (“FINMA”) as per the decree of 1 April 2010. As at 8 August 2012 these specific reporting requirements were fully revoked and only the regulatory requirements are to be observed by SCOR Switzerland
) In respect of the CHF 315 million subordinated debt issuance, SCOR entered into cross-currency swaps which exchanges the CHF principal and coupon into
Since these risks are subject to shocks and various trends, SCOR Global Life closely monitors their current developments in four Research & Development Centers which are:  R&D Center for Longevity and Mortality Insurance: carrying out mortality studies on life and annuity portfolios and providing support in pricing assumptions for new business, in particular new products.
 R&D Center for Long-Term Care Insurance: providing support in the development of LTC products (definitions, pricing, guidelines) and the monitoring of LTC portfolios.
 R&D Center for Medical Underwriting and Claims Management: evaluating the consequences for insurance of the new medical advances for both known pathologies and most recently discovered ones; advising clients in the pricing of substandard risks.
The R&D Centers are part of SCOR Global Life’s range of services: analyses and risk projections produced by the Centers are used by SCOR Global Life’s teams to advise their clients on the design and the monitoring of their life and health insurance products.
The Centers provide input at the product development stage, giving advice on the definition, the underwriting standards, as well as on pricing and reserving. They contribute to risk monitoring by carrying out experience studies on portfolio data and by undertaking prospective risk modeling.
The R&D Centers report to the Chief Pricing Actuary of SCOR Global Life, its employees are based in Paris, Cologne and
 The Insurance Risks and Finance Research Centre in cooperation with Nanyang Business School (Singapore), whose aim is to promote research in the field of risk management. For SCOR, the cost is SGD 2.5 million allocated over 5 years.
In a more general sense, SCOR places great importance on scientific research, particularly in the field of risk, as illustrated by its Corporate Foundation SCOR for Science, created at the end of 2012.
United Kingdom. The Group places great importance on the development of actuarial science in Europe and each year rewards the best academic papers in the field of actuarial science with prizes. These prizes are designed to promote actuarial science, to develop and encourage research in this field and to contribute to the improvement of risk knowledge and management. The SCOR Actuarial Awards are recognized as a measure of competence in the insurance and reinsurance industries. The winning papers are selected on the basis of criteria including an excellent command of actuarial concepts, the use of high-quality analysis instruments, and subjects that could have a practical application in the world of risk management.
The Group’s reinsurance back-office system operates on a custom software package known as “Omega.” Omega was designed to allow the tracking of clients and policyholders within the Group, grant online underwriting authorization throughout the world, track claims, analyze the technical profitability of contracts, and perform quarterly closings based on the latest estimated results. The Omega database reflects the current organization of SCOR Global P&C and SCOR Global
Life worldwide reinsurance risk portfolios. After an extensive study in July 2010, the Group decided to update and improve
The focus in 2012 was again on strengthening SCOR’s front office applications to improve risk selection, anticipa tion and reactivity in markets and products, and simulations of results. A number of projects have been commenced in recent years which will continue through 2013. Accounting forecasts are developed from underwriting plans and comparative analysis is produced in standard reports. New reserving and financial modeling tools have been implemented over the last years. Non-
Life pricing is closely managed using xAct, the new in-house standard pricing tool, which uses standardized models, and profitability analysis, then providing full visibility into proportional and non-proportional business. Control of exposure to natural catastrophes has again been improved by implementing the second version of the Cat Platform developed with
The Group is promoting a paperless environment. Internally, global document-sharing processes have been set up for the
Life and Non-Life divisions. With its clients, SCOR is able to automatically process claims, reinsurance and financial accounts received electronically in the standard formats edited by ACORD, an association created for the development of eprocessing in insurance and reinsurance, without having to re-input them. The Group is also a founder member of the
intends to capitalize on its existing strengths, and launch new initiatives in the front-end and back-end areas to ensure operational excellence and development.
These renewals constituted one of the final steps before the conclusion of the strategic plan “Strong Momentum v1.1”, and satisfied its profitability objectives and premium income growth assumptions. They confirmed the evolution of premium income, which is trending towards the EUR 5 billion level.
EUR 2.3 billion of premiums were up for renewal in January 2013, i.e. around half of SCOR Global P&C’s premiums. This proportion was particularly significant for Non-Life treaty business (71%), and represented more than half of specialty treaty
The total volume of premiums renewed at 1 January 2013 increased by 9% to EUR 1,890 million, of which 6 points related to a quota share treaty for an Asian cedant. SCOR Global P&C’s ability to seize this opportunity bore witness its benchmark role in this region of the world. Moreover, the emerging countries recorded particularly strong growth overall (+48% in Asia,
+16% in Latin America, and +12% in Africa & the Middle East). This growth accompanied active portfolio management: more than 8% of business was cancelled and restructured, while new clients represented three additional growth points.
This growth took place in favourable pricing conditions, which were up by more than 2%.
SCOR Global Life reinsurance portfolios. Only in selected markets like in Spain and Italy for certain products such as Health and Group Life reinsurance, the life reinsurance industry follows the practice of annual renewals.
SCOR Global Life expects business opportunities in several markets. By maintaining its policy of positioning itself in stronggrowth markets with initiatives such as (i) launching and intensifying of business activities from Life representative offices in
Asia-Pacific region and (iii) obtaining a composite reinsurance license in China, enabling Life division to offer Life & Health reinsurance services, SCOR Global Life continues to establish an active infrastructure to participate in economic developments in these regions.
In the U.K, SCOR Global Life announced its entry into the U.K. Longevity market in November 2011. It reinsured a significant share of the longevity risk assumed by Deutsche Bank, following the completion of a GBP 3 billion longevity swap transaction between Deutsche Bank and the Rolls-Royce Pension Fund. Demonstrating the expertise from this successful signing SCOR Global Life has continued to negotiate with additional clients.
In August 2011 SCOR Global Life completed the acquisition of the mortality reinsurance business, including the operational assets and personnel, of Transamerica Re. Immediately after closing of the transaction several projects in all areas of the business were initiated to achieve a globally harmonised life engine for SCOR.
The Asian markets, generally characterized by growing economies, continued to display vigorous development in the life and health lines of business. Moreover, further growth has been realized in responding to ongoing market demand for capital motivated reinsurance solutions as well as through the provision of product development support.
SCOR is consistently vigilant for opportunities in the current market environment.
Board of Directors is to determine the guiding principles of the Company’s business plan and strategy and to monitor their application. The Chairman and Chief Executive Officer (Président-Directeur Général) has full executive authority to manage the business of the Company, subject to the prior authorization of the Board of Directors or the Company’s shareholders for certain decisions as required by law pursuant to the Company’s bylaws (statuts).
The Board of Directors consists of 13 members, including 12 voting members (including one elected employee representative, known as the “Employee Director”) and one non-voting member, known as the “censeur” (the “Non-Voting
Member”). The Employee Director is elected by the employees of the Company and of its subsidiaries in a two round election on a simple majority basis. The elected candidate is then proposed by the Board of Directors to be appointed by the
Shareholders’ Meeting. Once appointed by the Shareholders’ Meeting, the Employee Director has the same rights and obligations as the other members of the Board of Directors (including the right to vote on any decision of the Board of
The Directors are elected for either a two-year, four-year or six-year term. The Employee Director is currently elected for a two-year term as well as the non-voting member. Under SCOR’s bylaws (statuts), Directors may hold office until the age of 77. A Director reaching the age of 77 while in office has to retire at the expiration of the term of his or her office, as determined at the Shareholders’ Meeting. Non-employee Directors and the Non-Voting Member are elected by the shareholders and serve until the expiration of their respective term, or until their resignation, death or removal, with or without cause, by the shareholders. Vacancies on the Board of Directors may, under certain conditions, be filled by the
Directors are required to comply with applicable law and SCOR’s bylaws (statuts). Under French law, Directors are liable for violations of French legal or regulatory requirements applicable to Societas Europaea, violation of a company’s bylaws
(statuts) or mismanagement (faute de gestion). Directors may be held liable for such actions both individually and jointly with the other Directors.
Chairman of the Board: - SCOR Global Life Rückversicherung Schweiz AG (Switzerland)
Chairman of the Board of Directors: - SOCRAM BANQUE - MACIF SGAM
Chairman of the Board of Directors: - CEGES - CEMM - Macif Gestion
Permanent Representative of MACIF: - on the Board of Directors of MACIF Participations - on the Board of Directors of Maurel & Prom Nigeria - on the Supervisory Board of MUTAVIE - on the Supervisory Board of GPIM
Director: - MACIFILIA - Macif-Mutualité - MACIF GESTION - Compagnie Foncière de la MACIF - Foncière de Lutèce - UGM Couleurs Mutuelles - OFI SMIDCAP (SICAV) - Fondation MACIF - CEGES (Association) - ICOSI (Institute)
Out of France: Director: - Deliciel AG (Switzerland) - SCOR UK Company Ltd (UK) - SCOR Switzerland AG (Switzerland) - SCOR Holding Switzerland AG (Switzerland) Zurich Companhia de Seguros Vida SA (Portugal)
Director: - Sal. Oppenheim (Schweiz) AG (Switzerland) - Zurich , Companhia de Seguros SA (Portugal)
Professional Address: GaveKal Research Suite 3903 Central Plaza, 18 Harbour Road Wan Chai Hong Kong
Professional Address: Institut Français des Administrateurs 7 rue Balzac 75382 Paris Cedex 08 France
Out of France - SCOR Reinsurance Company (U.S.) - General Security National Insurance Company (U.S.)
Professional Address: Gruppo Editoriale L’espresso Via Cristoforo Colombo, 98 00147 Rome Italy
Principal Position: Deputy Director and Chief Executive Officer of Gruppo Editoriale L’Espresso S.p.A. (Italy)
Out of France: Chairman: - A. Manzoni & C. S.p.A. (Italy) - Elemedia S.p.A. (Italy) - Rete A S.p.A. (Italy) - All Music S.p.A. (Italy) - Rotocolor S.p.A. (Italy) - Atlantia S.p.A. (Italy)
- Malakoff Médéric Innovation SAS - Viamédis SA - Quatrem SA - Sévriena 2
Chairman of the Management Board: - Malakoff Médéric Assurances SA -Médéric Epargne SA
Manager: - Investissements et gestion Textile SARL - SCI Saint Léger
Professional Address: MAAF ASSURANCES, MMA & COVEA 7, place des 5 martyrs du Lycée Buffon 75015 Paris France
Principal Position: Vice-Chairman and Executive Director of COVEA (mutual insurance group company) (France)
Permanent Representative: - COVEA (SGAM) on the Board of Directors of Azur GMF Mutuelles Assurances associés - GMF Assurances on the Board of Directors of FIDELIA Assistance
Other positions: Out of France: Director: - SCOR Reinsurance Asia Pacific Ltd (Singapore)
Chairman and Chief Executive Officer: - of Technip* until 27 April 2007 (retirement)
Chairman: - Technip Italy (Italy) (until 27 April 2007) - Technip Far East (Malaysia)
Non-Voting Director: Chairman: - Compagnie d’Investissement de Paris S.A.S. - Financière BNP Paribas S.A.S.
Executive Vice-President of MEDEF (Mouvement des Entreprises de France). He joined the Group as Chairman and Chief
Chairman and Chief Executive Officer of the AXA Group’s French insurance and assistance companies. Claude Tendil was appointed Chairman and Chief Executive Officer of the Generali Group in France in April 2002 and Chairman of the Europ
Gérard Andreck, a French citizen, is the Chairman of the MACIF Group since June 2006. Mr. Andreck has a deep interest in the mutual company and insurance sector, and he served as President of CJDES (Centre des Jeunes Dirigeants de l’Economie Sociale) from 1991 to 1993 and of CEGES ( Conseil des Entreprises, Employeurs et Groupements de l'Economie Sociale) from May 2009 to Decembre 2011. On 1 July 2008, he was appointed Chairman of the Groupement des
Peter Eckert, a Swiss citizen, was member of the Management Board (1991-2007) and Chief Operating Officer (2002-2007)
December 2008, and Deputy Chairman of the Board of the new Swiss Financial Market Supervising Authority (FINMA) from 1 January 2008 to 31 December 2008. From 1 January 2009, until 14 November 2011 he was Chairman of the bank
Institute of Liberties (Institut des Libértés) in Paris. He holds a DESS in Economy (Toulouse) a degree from IEP (Toulouse)
United States. From 2007 to 2010, he was the Deputy Regional Manager for SCOR Business Solutions (SBS) in Asia-
Pacific. He is currently a Vice President/Senior P&C Underwriter for SBS in New York.
Caisse des Dépôts et Consignations. He currently serves as the Chairman of the French Institute of Directors (Institut
Assistance in Paris. Two years later she returned to Italy to join the headquarters of the Generali group, taking responsibil ity for the Planning and Control department. In 2001 she left Trieste for Madrid, where she became CEO of Generali Espana.
IBM France as a large corporate accounts manager from 1977 to 1979. From 1979 to 2005, he has been a company leader in the textile industry . Until June 2006, Guillaume Sarkozy exercised a number of responsibilities at the head of professional associations, in particular, the French Textile Industries’ Union (1993-2006), the Industrial Federations Group (2004-2006),
(2004-2006). In 2004, he became vice President of the MEDEF and of the CNAM (2004-2005). Guillaume Sarkozy joined
Group General Manager of Malakoff Mederic Group in July 2008 with the merger of the Groups Médéric & Malakoff. Since 2004, he is a member of the "Haut Conseil pour l'avenir de l'Assurance Maladie".
Chief Executive Officer of MAAF and MMA, where he remains a director. He is currently Vice-Chairman and Executive
Director of COVEA (société de groupe d’assurance mutuelle), a leading French mutual insurance company.
Officer of Total Exploration Production, then Chairman and Chief Executive Officer of Technip SA from September 1999
Frieder Knüpling 43 Deputy Group Chief Risk Officer 2010 Director : SCOR Financial Services Limited (Ireland)
Gilles Meyer 55 Chief Executive Officer of SCOR Global Life SE
SCOR Global Life Americas Reinsurance Company (U.S.) SCOR Global Life Americas Holding, Inc. (US) SCOR Life Assurance Company (U.S.) SCOR Life Reassurance Company (U.S.)
Chairman & President: SCOR Global Life Reinsurance (Barbados) Ltd SCOR Global Life Reinsurance International (Barbados) Ltd
Financial Planning and Analysis Manager for Global Property and Casualty Reinsurance. In 2003, he was appointed Chief
Benjamin Gentsch, a Swiss citizen, graduated with a degree in management from the University of Saint-Gall where he specialized in insurance and risk management. From 1986 to 1998, he held several positions at Union Reinsurance
Frieder Knüpling, a German citizen, holds degrees in Mathematics and Physics from the Universities of Göttingen and
Freiburg. He worked as a lecturer and research assistant at Freiburg University and several other colleges, until he received a PhD in Economics based on research on econometric modelling of macroeconomic and financial data. From 1999 to 2002 he worked for Gerling-Konzern Globale Rückversicherungs-AG and its U.K. subsidiary, dealing with pricing and valuation.
From 2003 , he headed the Corporate Actuarial & Treasury department of the Revios group. Since 2007 Frieder Knüpling has headed SCOR’s Corporate Actuarial Department, reporting to the Chief Risk Officer. He was appointed Deputy Chief
Risk Officer of SCOR in December 2008 and member of the executive board (Vorstand) of SCOR Rückversicherung
Paul Rutledge, a U.S. citizen, holds a bachelor of arts degree in mathematics from Duke University and attended
Reinsurance Ireland Limited. Before joining Transamerica Re, he served as president and chief executive officer of Life of
Virginia, a consumer business of GE Capital Services. Prior to Life of Virginia, he held positions at several Torchmark companies including Liberty National, Torchmark Holdings and United Investors Life. He is currently the Chief Executive
He held various positions in the French civil service from 1981 to 1999, notably as financial attaché to the French embassy in Germany (1985-1987), adviser in the Prime Minister’s cabinet (1993-1995) and deputy-director in charge of international economic issues at the French Ministry of the economy and finance. He was also in charge of macroeconomic modelling at the Ministry of the economy and finance. In 2000, he joined the Fédération française des sociétés d’assurances (FFSA) as director of economic, financial and international affairs. In February 2006, he was appointed Chief Economist of SCOR.
Philippe Trainar chairs the "Commission d'analyse et de gestion des risques" of the FFSA. He is a member of the governmental consulting and expertise committees: the "Comité Scientifique de l'Autorité de Contrôle Prudentiel" and the
Manager of Economic and Financial Affairs. In London beginning in 1998, he served successively as Insurance Strategist with Lehman Brothers, Vice-President for asset management solutions and structured transactions, a specialist in insurance and reinsurance companies at Merrill Lynch, and then at Deutsche Bank. In 2003, he became Managing Partner of Gimar
Compensation and Nomination Committee held on 10 February 2011 and within the limit of this amount, the Board of
Directors held on 7 March 2011 sets the terms and conditions of the allocation to encourage the attendance of the Directors.
It was decided to allocate the Directors fees, which are payable to each Director and to the Non-Voting Member, partly in one fixed sum of EUR 28,000 on a quarterly basis payable in fourth and partly based on the effective presence of the relevant Directors and of the Non-Voting Member at the meetings of the Board of Directors and at its Committees, in an amount equal to EUR 2,000 per Board or per Committee meeting at which they are present, except for the Chairman of the
Audit Committee who receives an amount equal to EUR 4,000 as special fees for his function. The payment of the directors fees is made at the end of each quarter. Moreover, the individual independent members of the Board received in 2012, the single sum of EUR 10,000 in Company’s shares, that the Director commits to keep until the end of his/her appointment. The paid amounts have been properly used to that effect.
(1) Pursuant to the decision made by the Board of Directors on 21 March 2006, the Chairman and Chief Executive Officer receives directors’ fees along with the other members of the Board of Directors of the Company, based on the same conditions for distribution (2) Directors appointed by the Annual Ordinary General Meeting of the Shareholders of 3 May 2012 (3) Directors whose appointment ended on 4 May 2011 (4) Directors whose appointment ended on 3 May 2012
SCOR Global Life Rückversicherung Schweiz AG merged into SCOR Holding (Switzerland) AG in June 2011 15.1.2 REMUNERATION OF THE MEMBERS OF THE COMEX AND OF THE EXECUTIVE CORPORATE OFFICER IN 2012
Officer) as at 31 December 2012 amounts to EUR 8,769,040(1). In addition, they were awarded a total number of 429,000 shares and 429,000 stock options in 2012 for a total estimated value of EUR 8,240,210 (2).
Committee on 7 March 2012, the meeting of the Board of Directors on 7 March 2012 decided that the Chairman and Chief
Executive Officer:  will receive a fixed gross annual sum of EUR 1,200,000, payable in twelve monthly installments; and
 will receive a variable annual compensation, capped at EUR 1,000,000 determined as follows: - 50% on the basis of the achievement of personal objectives, defined annually at the beginning of each year by the Board of Directors on the recommendation of the Compensation and Nomination Committee; and - 50% on the basis of the achievement of financial objectives, defined annually at the beginning of each year by the Board of Directors on the recommendation of the Compensation and Nomination Committee.
 personal criteria: implementation of Solvency II, pursue the reinforcement of the ERM and finalization of the internal model ; continuation of an active policy of increasing the value of the Group in the opinion of the investors
(2) The amount corresponds to the IFRS 2 Share-based Payment fair value as described in note 18 of Section 20
and analysts; deepening of the employees management policy; consolidation of the Group's commercial positions; general management.
Pursuant to the decision of the Board of Directors’ meeting of 21 March 2006, the Chairman and Chief Executive Officer shall benefit from a specific life insurance subscribed by the Group aimed at covering the risks inherent to the functions of
Chairman and Chief Executive Officer for an amount equivalent to three years of fixed and variable compensation.
In the case of departure during financial year n:  all the variable part of his compensation for year n-1 will be payable during year n as soon as the Company’s financial statements for year n-1 are settled by the Board of Directors;  in addition, in the case of dismissal, the amount of the variable part of his compensation for year n will be (i)
determined on the basis of the variable compensation for year n-1 and prorated on the basis of the departure date for the current year n, and (ii) paid as soon as the Company’s financial statements for year n-1 are settled by the
Compensation and Nomination Committee, will be met for the year n if at least 3 out of the 4 criteria below are fulfilled: (A) SCOR’s average financial strength by S&P rating must be maintained (minimum) “A” in year n-1 and n-2; (B) SCOR Global P&C’s average net combined ratio must be less than or equal to 102% in year n-1 and n-2; (C) SCOR Global Life’s average operational margin must be higher than or equal to 3% in year n-1 and n-2; (D) SCOR’s average ROE must be higher than 300 points above the risk-free rate in year n-1 and n-2.
Summary table of the gross compensation, shares and stock options granted to the Corporate Officer: In EUR
Reminder of the specific award conditions applicable to the Corporate Officer in respect of the principles AFEP / MEDEF: The Board of Directors of 3 April 2007 decided that for all the grants posterior to that date, the Corporate Officer is required to retain as registered shares at least 10% of the shares issued from the exercise of stock-options granted and at least 10%
The following table presents a summary of the gross compensation of the Corporate Officer for fiscal years 2012, 2011 and 2010: Summary table of the gross compensation granted to the Corporate Officer
Performance conditions 15.1.2.2 Gross remuneration to Executive Committee members (COMEX) other than the Chairman as at 31 December 2012
The following table presents the gross compensation related to fiscal years 2012, 2011 and 2010 and paid in 2012, 2011 and 2010 to the members of the Executive Committee: Members of the Executive Committee - Gross Compensation 2012 2011 2010
In EUR Related to Paid Related to Paid Related to Paid
Benjamin Gentsch (Paid in CHF (1)) 891,357 835,645 816,550 868,095 868,095 868,095
The following table presents the components of the gross compensation for fiscal years 2012, 2011 and 2010 for the members of the Executive Committee (other than the Chairman and Chief Executive Officer).
The following table presents the components of the actual gross compensation paid in 2012, 2011, 2010 to the members of the Executive Committee (other than the Chairman and Chief Executive Officer).
Benjamin Gentsch (Paid in CHF (1)) 498,132 302,943 34,570(2) 835,645 479,037 354,487
Paolo de Martin (Paid in CHF (1)) 705,687 539,895 44,699(2)(8) 1,290,281 673,292 512,714
Paul Rutledge (Paid in USD (4)) 380,932 130,248 12,937 524,117 155,547 N/A
(1) The compensation is paid in CHF, the exchange rate used is: 1 EUR = 1.2045 CHF (the exchange rate of reference for the DDR) (2) Those allowances cover business expenses (3) This amount includes an expatriation premium related to fiscal year 2010. (4) The compensation is paid in USD since 10 August 2011, the exchange rate used is: 1 EUR = 1.2843 USD (the exchange rate of reference for the DDR) (5) The compensation is paid in CHF from 1 October 2011. The compensation is paid in CHF, the exchange rate used is: 1 EUR = 1.2045 CHF. (6) Frieder Knüpling is member of the COMEX since 1 July 2010. He is Deputy Chief Risk Officer since 1 October 2012 (7) Philippe Trainar is member of the COMEX since 1 April 2010 as Chief Risk Officer (8) This amount includes a payroll adjustment of CHF 12,000 (EUR 9,963) for the years 2011 and 2010
The members of the Executive Committee do not receive directors’ fees in respect of their directorships of companies in which SCOR holds more than 20% of the capital.
In the event of a change in the structure of the share capital of the Company, if a member of the Executive Committee is dismissed (except for reason of serious or gross misconduct) or if he decides to resign, he will benefit from (i) a cash payment equal to the amount of fixed and variable compensations paid to him by the Group for the one financial year prior to his departure, (ii) a cash payment compensating him for his inability to exercise stock options granted prior to his departure date and which he would be unable to exercise due to the vesting period conditions set forth in the applicable stock option plan, in an amount to be determined by an independent expert using the “Black-Scholes” pricing model, and (iii)
15.2 Total amounts set aside or accrued to provide pension, retirement, or similar benefits for financial year 2012
Like all senior executives employed in France , the members of the Executive Committee who joined SCOR before 30 June 2008 and are employed in France, are entitled to a guaranteed capped pension plan conditioned on a minimum five years length of service with the Group, the payment of which is based on their average compensation over the last five years. This pension plan was closed to employees hired after 30 June 2008.
Two executives under a Swiss contract are entitled to a specific scheme with a guaranteed pension of 50% of the average compensation over the last five years before retirement.
16.1 Date of expiration of the current term of office 146 16.2 Information on service contracts of members of Administrative and Management bodies 146 16.3 Information on the Audit Committee and the Compensation and Nomination Committee 146 16.4 Corporate governance regime 147
Chairman of the Board of Directors and Chief Executive Officer 2017 (*) 4 November 2002 N/A
(*) At the end of the Ordinary Annual General Shareholder’s Meeting taking place during the indicated year (1) Cooptation with ratification voted on by the Ordinary General Shareholders’ Meeting of 7 May 2008 (2) To be determinded prior to the Ordinary Shareholders’ Meeting of 25 April 2013 16.2 Information on service contracts of members of Administrative and senior officers
Appendix B (part I of the Report from the Chairman of the Board of Directors on the conditions for preparation and organization of the work of the Board of Directors).
Since SCOR SE’s shares are listed on the Euronext, the provisions relating to corporate governance applicable to SCOR
(1) Each Hub covers a region and may encompass several countries (2) Paris Hub covers France, Spain, Italy, Belgium, the Netherlands, Russia, South Africa and Luxembourg (3) Americas Hub covers United-States, Mexico, Brazil, Canada, Chili and Colombia. In 2011, the former Transamericas Re employees were mostly included in the Hub
Executive Officer (10) For 2011 and 2012, the former Transamerica Re employees are temporarily included in the SCOR Global Life division. For 2012, Rehalto (29 employees at 31
(1) Malakoff Médéric Group holds, as at 31 December 2012, 5 875 506 SCOR shares
The table below presents the acquisitions, sales, subscriptions or exchanges of SCOR SE shares as well as operations upon securities linked to SCOR SE made by Directors and Senior managers in 2012.
Directors and officers Operations made in 2012 for a greater amount than
Mr. Daniel Lebègue Acquisition of shares for a total amount of EUR 10,000
Reminder of the specific award conditions applicable to the Corporate Officer in respect of the principles AFEP / MEDEF: The Company's Board of Directors of 3 April 2007 decided that for all the grants posterior to that date, the Corporate Officer is required to retain as registered shares at least 10% of the shares issued from the exercise of stock-options granted and at least 10% of the performance shares granted until the termination of his duties.
The allocation of stock options since 2008 is subject if necessary to the satisfaction of performance conditions. Thus, a third of the number of options awarded on 22 May 2008, half of the options awarded on 23 March 2009 and all the options awarded since 18 March 2010 are subject to the satisfaction of performance conditions. However all the options allocated since 23 March 2009 to the Chief Executive Officer are subject to the satisfaction of performance conditions. Please refer to 17.3 of this Registration Document and the registration documents of SCOR filed with the Autorité des marchés financiers on 8 March 2012 and 8 March 2011 under number n. D.12-0140 and D.11-0103 for the details of the performance conditions applicable to the stock-options.
25 August2004, 16 September 2005, 14 September 2006, 13 September 2007 et 10 September 2008
17.2.3 FREE ALLOCATION OF SHARES TO EXECUTIVE COMMITTEE MEMBERS AND OTHER COMPANY OFFICERS AS AT 31 DECEMBER 2012
The attribution of shares since 2008 is subject to the satisfaction of performance conditions. Thus, a third of the number of shares awarded on 07 May 2008, an half of the shares awarded on 16 March 2009 and all the shares awarded since 2
In addition to these conditions specified above, the Company's Board of Directors of 12 December 2008 decided that for all the grants posterior to that date, the Corporate Officer is required to buy on the market a number of shares equal to 5% of the number of performance shares granted as soon as these shares may be sold.
Refer to Section 20.1.6 – Notes to the Consolidated Financial Statements, Note 17 - Provisions for employee benefits and
Appendix A – Unconsolidated Corporate financial statements of SCOR SE, Note 13 – Employee share-ownership plans.
The Chairman and CEO, under the authority given by the Board of Directors held on 19 March 2012 for the implementation of this plan, allocated on 23 March 2012 509,000 stock options.
Euronext Paris over the 20 trading days preceding the decision to award the stock options.
The exercise of all of the stock options allocated in 2012 is subject to performance conditions. The performance conditions will be deemed satisfied if, in addition to the mandatory condition (5) below, at least three out of the four other conditions listed below are met: (1) SCOR financial strength by S&P rating must be maintained (minimum) “A” in 2012 and 2013; (2) SCOR Global P&C’s combined ratio must be less than or equal to 102% on average in 2012 and 2013; (3) SCOR Global Life’s technical margin must be higher than or equal to 3% on average in 2012 and 2013; (4) The SCOR group’s ROE for the financial years ending 31 December 2012 and 31 December 2013 must be higher than 300 points above the risk-free rate on average.
(5) Absolute appliance of Group’s ethical principles as described in the Code of Conduct of SCOR Group. These principles, as settlements to protect the interests of customers, are the pillars of sustainable development of SCOR
The table below presents the total number of stock options allocated in 2011 and 2012 by category within the Group: Total number of stock options allocated in 2012
Total number of stock options allocated in 2011 Total number of beneficiaries in 2011
A table showing features of the SCOR stock option plans is found in Section 20.1.6 – Notes to the Consolidated Financial
Company would determine the identity of the beneficiaries of the allotment and the conditions and criteria for the allotment of the shares.
(iii) the beneficiaries will be subject, where appropriate, to an obligation to retain shares in a period of two years from the end of the vesting period for tax residents of France and that the retention period for beneficiaries not tax residents of
Following the authorization by the Shareholders' Meeting on 4 May 2011, the Company's Board of Directors of 19 March 2012, on the proposal of the Compensation and Nominations Committee of 19 March 2012, decided to grant performance shares to the members of the Executive Committee (except the Chairman and Chief Executive Officer), to Partners and grant also collective free shares to each employee non Partner of the Group.
The Company's Board of Directors of 19 March 2012, on the proposal of the Compensation and Nominations Committee of 19 March 2012, decided to allocate 304,000 performance shares to the members of the Executive Committee (except to the
The Chairman and CEO, under the authority given by the Board of Directors held on 19 March 2012 for the implementation of this plan, allocated on 19 March 2012 1,218,700 performance shares to the other Partners of the Company and 168,240 free shares to Non Partners of the Company.
The free shares awarded to the Non Partners as part of collective free shares are not subject to the performance conditions.
The performance conditions will be deemed satisfied if, in addition to the mandatory condition (5) below, at least three out of the four other conditions listed below are met: (1) SCOR financial strength by S&P rating must be maintained (minimum) “A” in 2012 and 2013; (2) SCOR Global P&C’s combined ratio must be less than or equal to 102% on average in 2012 and 2013; (3) SCOR Global Life’s technical margin must be higher than or equal to 3% on average in 2012 and 2013; (4) The SCOR group’s ROE for the financial years ending 31 December 2012 and 31 December 2013 must be higher than 300 points above the risk-free rate on average.
The Company's Board of Directors of 3 May 2012, on the proposal of the Compensation and Nominations Committee of 19
March 2012, decided to allocate 125,000 performance shares to the Chairman and Chief Executive Officer.
All the shares awarded to the Chairman and Chief Executive Officer are subject to the satisfaction of performance conditions. The performance conditions will be deemed satisfied if, in addition to the mandatory condition (5) below, at least three out of the four other conditions listed below are met: (1) SCOR financial strength by S&P rating must be maintained (minimum) “A” in 2012 and 2013; (2) SCOR Global P&C’s combined ratio must be less than or equal to 102% on average in 2012 and 2013; (3) SCOR Global Life’s technical margin must be higher than or equal to 3% on average in 2012 and 2013; (4) The SCOR group’s ROE for the financial years ending 31 December 2012 and 31 December 2013 must be higher than 300 points above the risk-free rate on average.
Incentive Plan (the “LTIP”), for selected managers and executives of the Group in order to ensure retention of key employees while extending performance measurement to six years.
The conditions of the LTIP plan are a vesting period of six years for the tax residents in France (and an obligation to retain shares for a period of two years after the end of the vesting period), and of eight years for the beneficiaries not tax resident in France.
All the shares awarded to the Senior Global Partners and half of the allocations awarded to the other (less Senior Global
The conditions of this plan are similar to those SCOR usually decides with a vesting period of two years for the tax residents in France (and an obligation to retain shares for a period of two years after the end of the vesting period), and of four years for the beneficiaries not tax residents in France.
Members of the Executive Committee - - 304,000 7 392,000 9 368,000(3) 9
From 30 October 2012 to 30 October 2014 included 2 years
Requirement of presence at the company as at 30 October 2014 Performance conditions
From 26 July 2012 to 26 July 2018 included 2 years
Requirement of presence at the company as at 3 May 2014 Performance conditions
From 19 March 2012 to 19 March 2016 included No holding period
Requirement of presence at the company as at 12 December conditions
Requirement of presence at the company as at 2 March 2012 Performance conditions
Requirement of presence at the company as at 25 November conditions
From 16 March 2009 to 16 March 2013 No holding period
During the 2012 allocation, the rights vested into shares by the ten employees of the Company and of any company included in its consolidation whose number of shares thus obtained is the highest represent 453,000 shares. Those rights concerned, for the tax residents of France, the Free Share Plan of 2 March 2010 whose transfer occurred on 3 March 2012
and, for the not tax resident of France, the Free Share Plan of 7 May 2008 and 26 August 2008 whose transfer occurred respectively on 8 May 2012 and 27 August 2012.
For the number of stock options underlying shares held on the issuer and on the companies referred to previously and exercised during the financial year by the ten employees of the issuer or these companies, whose number of options thus purchased or subscribed is the highest, as well as the stock options granted to ten employees not Company officers whose number of options thus purchased is the highest, refer to table in Section 17.2.2 – Stock options held by the members of the
On 4 May 2011, the Combined Shareholders’ Meeting of the Company in its thirtieth first resolution delegated its authority to the Company’s Board of Directors in order to increase the share capital by issuing shares reserved for employees of the company and of French and foreign companies affiliated with it pursuant to Article L. 225-180 of the French Commercial
As at the date of the Registration Document, the Company’s Board of Directors has not exercised this authorization. This authorization was granted for a period of eighteen months as at the date of the Combined Shareholders’ Meeting on 4 May 2011.
Additional pension guaranteeing 20% to 50% of the average last 5 years salaries according to seniority if the beneficiary is at SCOR at retirement (closed since 2008)
(1) The percentage of voting rights is determined on the basis of the number of shares at closure, excluding the company’s own treasury shares. (2) Source: TPI and Ipreo.
Company on terms other than market terms. To its knowledge, except as disclosed above, the Company is not directly or indirectly owned or controlled by any other corporation, foreign government or any other natural or legal person severally or jointly and it is not aware of any arrangements, the operation of which may at a subsequent date result in a change of control of the Company.
Pursuant to Article 8 (“Rights attached to each share”) of the bylaws (statuts), each Ordinary Share gives its owner the right to one vote at the Shareholders’ Meetings and the bylaws (statuts) do not stipulate shares having the right to a double vote.
On 21 April 2010, Amundi Asset Management declared that the three portfolio management companies of group Amundi, i.e. Amundi, Société Générale Gestion and Etoile Gestion SNC, (i) further to an acquisition made on 16 April 2010, had exceeded the registered thresholds of 2.5% of the capital and voting rights in SCOR and that they held in their OPCVM
4,723,216 shares and (ii) further to a sale made on 20 April 2010, had fallen below the registered thresholds of 2.5% of the capital and voting rights in SCOR and that they held in their OPCVM 4,577,623 shares in SCOR.
BNP Paribas carrying their business under its responsibility, that it had exceed the registered thresholds of 2.5% of the capital and voting rights in SCOR and that it held, through FCP, SICAV and mandates, 4,990,085 shares in SCOR
On 1 July 2010, BNP Paribas Asset Management declared, on behalf of CamGestion, Fundquest Franceand of the affiliates of Fortis Investments integrated into BNP Paribas Investment Partners for the FCP, SICAV, Mandates and FCPE, that it had fallen below the registered thresholds of 2.5% of the capital and voting rights in SCOR and that it held 4,604,571 shares representing 2.49% of the capital in SCOR.
On 1 December 2010, BlackRock Inc., on behalf of funds and its clients, declared that, on 25 November 2010, it had fallen below the thresholds of 5% of the capital and voting rights in SCOR and that it held 9,380,260 shares representing 4.997%
of the capital and voting rights in SCOR and that it held 9,256,125 shares representing 4.93% of the capital in SCOR. On 14
On 13 May 2011, Amundi Asset Management declared that the three portfolio management companies of group Amundi, i.e. Amundi, Société Générale Gestion and Etoile Gestion SNC, further to an acquisition made on 12 May 2010 had exceeded the registered thresholds of 2.5% of the capital and voting rights in SCOR and that they held in their OPCVM
On 3 August 2011, Natixis Asset Management declared that it had fallen below the registered thresholds of 2.5% of the capital and voting rights in SCOR and that it held 95,360 voting rights, or 0.05% of voting rights in SCOR.
On 26 September 2012, Malakoff Mederic Assurances declared that it had exceeded the registered thresholds of 2.5% of the capital and voting rights in SCOR due to the acquisition, outside the market, of 5,335,996 shares from Malakoff Mederic
As at 31 December 2011:  SCOR held 7,262,600 treasury shares;  The total number of voting rights amounted to 192,021,303 (including the voting rights attached to treasury shares).
We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreements and commitments indicated to us, or we would have identified performing our role. We are not required to comment as to whether they are beneficial or appropriate or to ascertain the existence of any such agreements and commitments. It is your responsibility, in accordance with Article R. 225-31 of the French commercial code (Code de Commerce), and Article R.322-7 of the French insurance code (Code des assurances) to evaluate the benefits resulting from these agreements and commitments prior to their approval.
The obligations resulting from amendment #6 to the retrocession agreement took effect on 1 January 2012.
The retrocession agreement, as amended, gave rise to the payment of MEUR 78.6 to SCOR Global P&C during the financial year 2012.
Nature and purpose Stand-By Letter of Credit Facility Agreement with BNP Paribas dated 23 December 2008, as amended.
Nature and purpose Retrocession agreement signed between SCOR SE and SCOR Global P&C SE on 4 July 2006.
Terms In 2006, despite SCOR SE's contribution of its Non-Life reinsurance operations to SCOR Global P&C SE, SCOR SE remained a reinsurance company because of the retrocessions established between SCOR Global Life SE and SCOR Global P&C SE as the retroceding companies, and SCOR SE as the retrocessionaire. These retrocessions back the Group’s debt carried by SCOR for maintaining the Group’s aggregate solvency and confirming its rating.
As a result, SCOR Global P&C SE and SCOR SE signed amendment #2 to the retrocession agreement they signed on 4 July 2006, in order to exclude from the retroceded business, as of 1 January 2007, the contracts underwritten by the German branch.
The Board of Directors of SCOR SE, at its meeting of 13 November 2007, authorized and approved, pursuant to Article L.225-38 of the French Commercial Code, the signature of the amendments to the retrocession agreement signed by SCOR SE and its subsidiary Global P&C SE on 4 July 2006.
As its meeting of 3 December 2010, the Company’s Board of Directors authorized, pursuant to Article L.225-38 of the French Commercial Code, the signature by SCOR SE, of an amendment #5 to the retrocession agreement signed between SCOR and SCOR Global P&C SE on 4 July 2006.
Mr. Jean-Claude Seys as member of the Board of Directors of SCOR SE and as member of the board of directors of SCOR Switzerland AG.
Mr. Peter Eckert as member of the Board of Directors of SCOR SE and as [member of the board of directors] of SCOR Switzerland AG.
Terms At its meeting of 2 March 2010, the Board of Directors of the Company authorized, pursuant to Article L.225-38 of the French Commercial Code, the issuance by SCOR SE, regarding the « Stand-By Letter of Credit Facility Agreement » with Société Générale with a maximum amount of USD 100 million, of a first demand guarantee.
This guarantee is issued for a maximum amount of USD 100 million plus interests, costs and accessories as a guarantee of the commitments of SCOR Global Life SE, SCOR Global P&C SE, SCOR Switzerland AG and SCOR Rückversicherung (Deutschland) AG (absorbed by SCOR Global Life SE on 19 October 2010).
The first demand guarantee was signed on 10 June 2010 and was not utilised up to this date. It gave rise to no payment during the 2011 financial year and during the 2012 financial year.
Terms At its meeting of 2 November 2005, the Board of Directors of the Company authorized, pursuant to Article L.225-38 of the French Commercial Code, the issuance of a parent company letter of guarantee intended to cover the financial obligations of SCOR Global Life (formerly SCOR VIE) under the terms of an agreement to issue letters of credit that would be signed by SCOR Global Life, SCOR Financial Services Limited (“SFS”) ans CALYON (“SFS-CALYON Letter of Credit Facility Agreement”) dated 13 December 2005 (for the purposes of this Section, the “Agreement”).
Under the terms of the Agreement, CALYON made a commitment to issue or cause the issue to SGLR of one or more letters of credit for a period of five years for a total commitment equal to the smaller of the following two amounts: (a) USD 250 million or (b) the sum equal to the difference between (i) the so-called Triple X reserves and (ii) 150% of the amount of the reserves required in the accounting plan (net of DAC).
5. With SCOR Global Life SE Related Persons Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE and as Chairman of the board of directors of SCOR Global Life SE.
Nature and purpose Retrocession agreement signed between SCOR SE and SCOR Global Life SE on 4 July 2006.
As its meeting of 28 July 2010, the Company’s Board of Directors authorized, pursuant to Article L.225-38 of the French Commercial Code, the signature, of an amendment #3 to the retrocession agreement signed by SCOR SE and SCOR Global Life SE on 4 July 2006.
The retrocession agreement, as amended, gave rise to the payment by SCOR SE to SCOR Global Life SE of EUR 9.1 million during the 2011 financial year.
a) Nature and purpose Authorization prior to the signature of a cash-pooling contract with BNP Paribas.
With regard to the notional cash-pooling scheme, each participating entity receives remuneration from BNP Paribas of its account’s positive balance, under the terms and conditions negotiated for the Group and otherwise, pays interest to BNP Paribas on the negative balance of their account, at an agreed rate for the Group.
This agreement gave rise to the payment by SCOR SE to BNP Paribas of non-material amounts during the 2011 and 2012 financial years.
c) Nature and purpose Authorization to execute a Master Trust Agreement with BNP Paribas and/or one of its subsidiaries (trustee), SCOR SE and SCOR Global Life SE (grantors, jointly and severally liable) and Transamerica Corp. (beneficiary).
Terms At its meeting of 22 March and 27 July 2011, the Company’s Board of Directors authorized, pursuant to Article L.22538 of the French Commercial Code, the signature of a Master Trust Agreement with BNP Paribas and/or one of its subsidiaries on market conditions. On the same Board meeting, SCOR SE accepted to be jointly and severally liable with SCOR Global Life SE within the Master Trust Agreement.
The Master Trust Agreement was signed on 9 August 2011 and gave rise to a non material payment during the 2012 financial year.
Terms As its meeting of 26 August 2008, the Company’s Board of Directors authorized, pursuant to Article L. 225-38 of the French Commercial Code, the signature of the Stand-By Letter of Credit Facility Agreement (the “Facility Agreement”), finalized with BNP Paribas, for the issue of stand-by letters of credit (“SBLC”), with regard to the Group’s insurance and reinsurance activity for a maximum amount up to USD 400,000,000.
Under the terms of the Facility Agreement, BNP Paribas made a credit line available to the concerned Group’s companies, under the conditions stipulated in the Facility Agreement, in a maximum principal amount of USD 400,000,000 to be made available through the issuance of SBLC or counter-guarantees intended to allow the concerned company to guarantee the execution of its commitments under its insurance and reinsurance operations, for a period of use running from 2 January 2009 to 31 December 2011.
to the Facility Agreement granted/will grant a senior pledge on a financial instruments account to BNP Paribas under the terms of a pledge agreement entered/to be enter into with BNP Paribas (and the related pledge declaration) and pledged/will pledge (i) on the date of the signature of the pledge agreement, a number of OATs for a minimum amount equal to EUR 5,000; (ii) on 2 January 2009, an additional number of OATs for an amount equivalent to the value in Euros of 55% of the SBLCs (corresponding to the letters of credit issued under the old credit agreement and assumed and extended by BNP Paribas); and (iii) to pledge before each new utilization a number of OATs for an amount equivalent to the value in Euros of 55% of the amount of the new utilization.
At its meeting of 22 March and 27 July 2011, the amendment #2 to the Facility Agreement with BNP Paribas in order to allow the accession of SCOR International Reinsurance Ireland Ltd (“SIRI”) (formerly known as Transamerica International Reinsurance Ireland Ltd) as additional borrower after the closing of its acquisition, allow to put in place SCOR Global Life SE’s joint and several liability for the benefit of SIRI, exclude SCOR Rückversicherung (Deutschland) AG (absorbed by SCOR Global Life SE on 19 October 2010) from the scope of the Facility Agreement, update the list of existing guarantees and securities.
The companies party to this agreement, as amended, are SCOR SE, SCOR Global P&C SE, SCOR Global Life SE and SCOR Switzerland AG. The other companies within the Group could equally benefit from this agreement as amended.
Pursuant to an accession letter dated 19 September 2011 SIRI benefitted from the Facility Agreement. Thus it can request utilisations up to a maximum amount of USD 250,000,000.
Nature and purpose Special authorization to conclude a stand-by letter of credit facility agreement with Commerzbank.
8. With SCOR Global Life SE, SCOR Global P&C SE, SCOR Switzerland AG and SIRI Related Persons Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE and as Chairman of the boards of directors of SCOR Global P&C SE, SCOR Global Life SE, SCOR Switzerland AG and SIRI.
Nature and purpose Authorization to issue a First Demand Guarantee within the framework of the Stand-By Letter of Credit Facility Agreement with Deutsche Bank dated 9 September 2011.
Terms As its meeting of 9 November 2011, the Company’ Board of Directors authorized, pursuant to Article L.225-38 of the French Commercial Code, the issuance by SCOR SE, regarding the stand-by letter of credit facility agreement with Deutsche Bank dated 9 September 2011, effective as of 1 January 2012, with a maximum amount of USD 575 million (“Facility Agreement”), of a first demand guarantee.
The companies party to this agreement are SCOR SE, SCOR Global P&C SE, SCOR Global Life SE, SCOR Switzerland AG and SIRI. The other companies within the Group could equally accede this agreement.
The first demand guarantee was signed on 9 November 2011. It gave rise to no payment during the 2011 financial year and in 2012.
9. Additional Retirement Plan Related Persons Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE.
Mr. Patrick Thourot as member of the Board of Directors of SCOR SE.
The compensation used to calculate pension benefits due to an eligible person is based on the average compensation of such person during the last five years of his or her employment (or professional activity, as the case may be), as
adjusted on the date of departure by the evolution of the INSEE’s annual average index for consumer prices.
10. With SCOR Global Life SE; SCOR Global P&C SE; SCOR Switzerland AG ; Prévoyance Ré SA ;Irish Reinsurance Partners Ltd (now SCOR Global P&C Ireland Ltd); SCOR Channel; SCOR Financial Services Ltd; SCOR U.K. Company Ltd; SCOR Perestrakhovaniye ; SCOR Reinsurance Company Ltd (US); General Security Indemnity Company of Arizona; General Security National Insurance Company; Investors Insurance Corporation; SCOR Global Life U.S. Re Insurance Company; SCOR Canada Reinsurance Company ; SCOR Global Life Reinsurance Company of America ; SCOR Reinsurance Asia-Pacific Pte Ltd; SCOR Reinsurance Company (Asia) Ltd ; SCOR Africa Ltd Related Persons Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE and as Chairman of the boards of directors of SCOR Global Life SE, SCOR Global P&C SE, SCOR Switzerland AG, SCOR Reinsurance Company Ltd (US), SCOR Perestrakhovaniye, SCOR Global Life U.S. Re Insurance Company and SCOR Canada Reinsurance Company.
Mr. Daniel Lebègue as member of the Board of Directors of SCOR SE.
Mr. Peter Eckert as member of the Board of Directors of SCOR SE and as member of the boards of directors of SCOR Switzerland AG and SCOR U.K. Company Ltd.
Nature and purpose Remuneration of the parent company guarantees granted by SCOR SE to the benefit of the reinsurance subsidiaries and of the upstream guarantees granted by SCOR Global P&C SE and SCOR Global Life SE to the benefit of SCOR SE.
11. With SCOR Global Life Reinsurance Company of America Related Persons Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE and as member of the board of directors of SCOR Global Life Reinsurance Company of America
Nature and purpose Parent company guarantee from SCOR SE in favour of SCOR Global Life Reinsurance Company of America (formerly known as XL Re Life America Inc) for reinsurance commitments.
Terms At its meeting of 3 November 2009, the Company’s Board of Directors authorized, pursuant to Article L.225-38 of the French Life Reinsurance Company of America L.225-38 of the French Commercial Code, the parent company guarantee’s signature for the reinsurance commitments of SCOR Global Life Reinsurance Company of America.
Only SCOR Global Life Reinsurance Company of America’s payment obligations, pursuant to the insurance and/or reinsurance contracts, are covered by this parent guarantee.
The granting of this unlimited guarantee is subject of the same remuneration for SCOR SE as that given for the other parental guarantees previously granted by the Company.
The parent guarantee was signed on 22 January 2010. It gave rise to no payment during the 2011 financial year and during the 2012 financial year.
In application of article 28 of the EC Commission Regulation No. 809/2004, the following information is incorporated by reference in this Registration Document: (i) The consolidated financial statements as at 31 December 2011 are included from pages 198 to 303 and the auditors’
Registration Document filed with the Autorité des Marchés Financiers on 8 March 2012 under Number D.12-0140, (and from pages 190 to 284 and from pages 285 to 286, respectively, of the free translation into English of such Registration
(ii) The consolidated financial statements as at 31 December 2010 are included from pages 193 to 273 and the auditors’
Registration Document filed with the Autorité des Marchés Financiers on 8 March 2011 under Number D.11-0103, (and from pages 179 to 253 and from pages 254 to 256 respectively, of the free translation into English of such Registration
(1) Includes acquisition related expenses with respect to the acquisition of Transamerica Re. For further detail refer also to Note 3.3 – Business Combination
Net cash flow provided by (used in) operations Note 12 761 530 656
Net income for year ended 31 December 2011 - - - - - 330 - - 330
Comprehensive income, net of tax - - (234) 98 - 330 - - 194
Allocation of prior year net income - - - 330 - (330) - - -
Other comprehensive income net of tax - - 244 (38) - - - - 206
Effect of change in foreign exchange rates - - - (20) - - - - (20)
Comprehensive income, net of tax - - 244 (38) - 418 - - 624
SWX Swiss Exchange). The principle activities of the Company and its subsidiaries (“the Group” or “SCOR”) are Life and
Annual General Meeting which will take place on 25 April 2013.
(Standing Interpretations Committee (SIC) and IFRS Interpretations Committee (IFRIC)) mandatorily applicable as at 31 December 2012. Refer to Note 1 (D) below for a detail overview on the new and amended International Financial
Reporting Standards adopted by the Group as endorsed by the European Union applicable in 2012 and the standards which have been issued by the IASB during the period but have not been adopted by the European Union.
As part of implementing one consistent general ledger across Group entities in 2012, certain general ledger accounts were remapped at consolidation level. The remapping has not had any material impact on the consolidated financial statements.
Certain reclassifications have been made to 2010 financial information to conform to the current year and 2011 presentation.
In conformity with IAS 1 - Presentation of Financial Statements, the Group has opted to present expenses by function in the statement of income. The costs are allocated to four categories (acquisition and administrative expenses, claims settlement expenses, investment management expenses and other current operating expenses) based on allocation keys which are determined based on management’s judgment. Hub shared service costs are allocated to the divisions based on a headcount allocation key.
Special Purpose Entities (SPE) are consolidated where the substance of the relationship is that the SPE is controlled by the
SPVs allow the retrocession of catastrophe losses financed by the issuance of catastrophe bonds. In accordance with
SIC 12 Consolidation - Special Purpose Entities, these vehicles are not consolidated by the Group as SCOR does not control these entities and is not liable for any residual risks or benefits of ownership.
Subsidiaries are consolidated from the time the Group takes control until the date control is transferred outside the Group or control ceases. Certain subsidiaries have been included within the Group financial statements under the equity method and are not fully consolidated on a line by line basis as they are immaterial to the Group consolidated financial statements.
The financial statements of the material subsidiaries are prepared for the same accounting period as that of the parent company. All material intra-Group balances and transactions including the results of inter-company transactions are eliminated.
million except where stated otherwise. The other key currencies in which the Group conducts business and the exchange rates used for the preparation of the 2012 financial statements are as follows: Currency Ending rate 2012 Average rate 2012
The Group has adopted the following amended International Financial Reporting Standard as adopted by the European
Union applicable as at 31 December 2012 resulting in no material impact on the Group’s consolidated financial statements:  Amendments to IFRS 7 – Enhanced Derecognition Disclosure Requirements which became effective for any period beginning on or after 1 July 2011, require additional disclosures of financial assets that have been derecognized but in which the entity has a ‘Continuing Involvement’. The application of these amendments has not had a material impact on the Group’s consolidated financial statements.
 Amendments to IAS 19 – Employee Benefits were issued in June 2011, which make significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to disclosures for all employee benefit plans. The European Union endorsed the amendments to IAS 19 on 5 June 2012. These amendments are applicable for annual periods beginning on or after 1 January 2013, with earlier adoption permitted. For SCOR, the main change of the amendments to IAS 19 compared to the present standard is the removal of the concept of expected return on plan assets that were previously recognised in profit and loss.
Instruments: Presentation. The disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32. The European Union endorsed the amendments on 13 December 2012. These amendments will not impact the Group’s financial position or performance and become effective for annual periods beginning on or after 1 January 2013.
 IFRS 13 – Fair Value Measurement provides guidance on how to measure the fair value of financial and nonfinancial assets and liabilities when required or permitted by IFRS. The European Union has endorsed IFRS 13 on 11 December 2012. The standard is effective for annual periods on or after 1 January 2013. The adoption of
 IFRS 11 – Joint Arrangements replaces IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities –
Non-monetary Contributions by Venturers. The standard addresses two forms of joint arrangements, i.e. joint operations and joint ventures. To assess whether there is joint control IFRS 11 uses the principle of control in
IFRS 10. The existing option to account for jointly controlled entities under IAS 31 using proportionate consolidation is removed in this standard. The European Union endorsed IFRS 11 on 11 December 2012. This standard is effective for annual periods beginning on or after 1 January 2013 for companies preparing financial statements in compliance with IFRS issued by the IASB and on or after 1 January 2014 for European listed
IFRS 12 on 11 December 2012. This standard is effective for annual periods beginning on or after 1 January 2013 for companies preparing financial statements in compliance with IFRS issued by the IASB and on or after 1 January 2014 for European listed Companies. IFRS 12 is a disclosure only standard and therefore will have no effect on profit or loss or the equity of the Group.
 As a consequence of the new IFRS 10 and IFRS 12, what remains of IAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. The European Union endorsed the amendments to IAS 27 on 11 December 2012. The amendments are effective for annual periods beginning on or after 1 January 2013 for companies preparing financial statements in compliance with IFRS issued by the IASB and on or after 1 January 2014 for European listed Companies. The Group does not present standalone IFRS financial statements.
are effective for annual periods beginning on or after 1 January 2013 for companies preparing financial statements in compliance with IFRS issued by the IASB and on or after 1 January 2014 for European listed Companies. The amendments to IAS 28 are not expected to impact the Group’s financial position or performance.
 Amendments to IAS 32 – Offsetting Financial Assets and Financial Liabilities clarify the meaning of “currently has a legally enforceable right to set-off”. The amendments also clarify the application of the IAS 32 offsetting criteria to settlement systems which apply gross settlement mechanisms that are not simultaneous. The European Union endorsed the amendments on 13 December 2012. These amendments are not expected to impact the Group’s financial position or performance and become effective for annual periods beginning on or after 1 January 2014.
However, the Group determined that the effect will be quantified only in conjunction with the other phases when issued, to present a comprehensive picture.
equity. They are recognized in the statement of income upon the disposal of the net investments.
Real estate currently held by the Group is classified as investment property when it is held to earn rentals, or for capital appreciation or both. Other properties are classified as tangible assets. Some buildings may be partially occupied by entities of the Group. Properties, including properties used by the Group, are recognized at cost, net of accumulated depreciation and impairment losses. Depreciation is recorded on a straight-line basis over the useful lives of the assets as follows: Category Useful life
Repairs and maintenance costs are charged to the statement of income during the financial period in which they are incurred. All costs directly associated with purchases or constructions of properties are capitalized. All subsequent value enhancing capital expenditures are capitalized when it is probable that future economic benefits related to the item will f low to the Group.
Every 5 years, each investment property is subject to an in-depth analysis of its market value by an independent appraiser, having recent experience in the location and category of investment property assessed and approved by the domestic regulators (l’Autorité de Contrôle Prudentiel in France). Annually, the appraised market value is updated by the same independent appraiser according to the changes of the local market and/or the property rental and technical situation.
Group assesses the recoverable amount of the building in question. The recoverable amount is the higher of the property’s
The Group classifies its financial assets in the following categories: available-for-sale, fair value through income, loans and accounts receivable and cash and cash equivalents. There are currently no assets classified as held-to-maturity. Sales and purchases of assets are recorded on the settlement date. Once it has been initially recorded, an asset is measured according to its asset category, determined according to the methods set forth below. Financial assets are derecognized when the contractual rights to the cash flow of the financial asset expire or are transferred, and when the Group has substantially transferred the risks and rewards inherent to the ownership of the financial asset.
When an asset is sold, the accumulated gains and losses included in equity are transferred to realized gains and losses from the sale of investments in the statement of income, net of any amounts previously recorded through income.
Loans and accounts receivable include short-term deposits or investments with a maturity of more than three months but less than twelve months at the date of purchase or deposit.
These items comprise the various subordinated or unsubordinated bonds issued by the Group. These loans are classified as financial debts, in accordance with IAS 32 - Financial Instruments: Presentation.
This caption includes debt relating to the acquisition of real estate property. At initial recognition, real estate financing debt is recorded at fair value less directly attributable transaction costs. After initial recognition, they are measured at amortized cost.
 A material embedded derivative is separated from the host contract and is recognized as a derivative:when its economic features and risks are not closely linked to the economic features of the host contract;  where the embedded instrument has the same conditions as a separate derivative instrument; and
Where the embedded derivative represents a significant part of the instrument and cannot be separated from the host contract, the hybrid instrument is treated as an instrument held for trading. Gains and losses resulting from variations in the fair value of the hybrid are recognized in the statement of income in the period during which they occur.
A derivative instrument designated as cash flow hedge is initially recognized at fair value on the date on which the derivative contract is entered into. The effective portion of the gain or loss on the hedging instrument is recognized in other comprehensive income in the cash flow hedge reserve, while the ineffective portion is recognized in the income statement.
For hedges of net investments in a foreign operation the portion of gains or loss on the hedging instrument considered as the effective portion of the hedge is recorded directly in shareholders’ equity. Any ineffective portion of the hedge is recognized in the statement of income.
 inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
For available-for-sale equity securities which are listed on an active market, a line-by-line analysis is performed when there has been a fall in fair value as compared to the initial purchase price of more than 30%, or a consistent unrealized loss over a period of more than twelve months. The different factors considered in this analysis include the existence or not of significant adverse changes in the technological, market, economic or legal environment in which the issuer operates. After consideration of these factors if a security remains unimpaired the Group ultimately considers objective evidence of impairment, as per IAS 39, by reference to three further key criteria being the existence or not of:  a consistent decline of more than 30% for twelve months; or
Subsequent events relate to relevant and material events that occur between the balance sheet date and the date when the financial statements are approved for issue:  Such events lead to an adjustment of the consolidated financial statements if they provide evidence of conditions that existed at the balance sheet date, and if relevant and material.
 Such events result in additional disclosure if indicative of conditions that arose after the balance sheet date, and if relevant and material.
The Group maintains reserves to cover its estimated liability for claims related to known events or events incurred but not yet reported (IBNR). The reserves are reviewed by management during the year, using new information as soon as it is
In Life business, policy linked liabilities include mathematical reserves, unearned premium reserves and claim reserves.
Group’s own estimates of premiums written and earned for which ceding company reports that have not yet been received.
Differences between such estimates and actual amounts are recorded in the period in which the estimates are changed or the actual amounts are determined. The difference between ultimate estimated premiums, net of commissions, and premiums reported by ceding companies, is recorded under accounts receivable arising from assumed reinsurance transactions. Premiums are earned on a basis that is consistent with the risks covered under the terms of the reinsurance contracts, which is generally one to two years. For certain U.S. and Japanese catastrophe risks, agriculture risks in Brazil and certain other risks, premiums are earned commensurate with the seasonality of the underlying exposure.
Premiums payable in respect of reinsurance ceded are recognized in the period in which the reinsurance contract is entered into and includes estimates where the amounts are not determined at the balance sheet date. Ceded premiums are expensed over the period of the reinsurance contract in the same manner as assumed business.
Life) and VOBA is calculated using expectations for estimated revenues from investments and the measurement of reserves is based on the discount rate reflecting directly the performance of assets, relevant parts of the recognized unrealized gains and losses from financial investments are considered as shadow DAC, shadow VOBA and shadow reserves and offset directly in equity.
Participations in syndicates operating at Lloyd’s of London are accounted for on an annual accounting basis with a delay due to the transmission of information from syndicates that the Group does not control. The Group recognizes its proportionate share of the syndicates insurance and reinsurance premiums as revenue over the policy term, and claims, including an estimate of claims incurred but not reported. On the closure of an underwriting year, typically three years after its inception, syndicates reinsure all remaining unsettled liabilities into the following underwriting year, a mechanism known as Re-Insurance To Close (“RITC”). If the Group participates on both the accepting and ceding years of account and has increased its participation, RITC paid is eliminated, as a result of this offset, leaving an element of the RITC receivable. This reflects the fact that the Group has assumed a greater proportion of the business of the syndicates. If the Group has reduced its participation from one year of account to the next, the RITC receivable is eliminated, leaving an element of RITC
payable. This reflects the reduction in the Group’s exposure to risks previously written by the syndicates. The Group recognizes Lloyd’s RITC in claims and policy benefits to ensure consistency with similar transactions recognized in accordance with IFRS and, present a true and fair view.
Embedded derivatives which meet the definition of an insurance contract are not separated.
In assessing the Group’s liability for these plans, the Group uses external actuarial valuations which involve critical judgments and estimates of mortality rates, rates of employment turnover, disability, early retirement, discount rates, expected long-term rates of return on plan assets, future salary increases and future pension increases. These assumptions may differ from actual results due to changing economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. These differences may result in variability of pension income or expense recorded in future years.
Actuarial gains and losses arising from experience adjustments and the effects of changes in actuarial assumptions are reflected in shareholders’ equity.
(return on equity (ROE), for example). These conditions are taken into account when determining the probable number of options which will be acquired by the beneficiaries. At each balance sheet date, the Group reviews the estimated number of options which will be acquired. Any impact is then recorded in the statement of income with the offsetting entry in shareholders’ equity over the remaining vesting period.
Management periodically evaluates positions taken in tax returns. Assessing the outcome of uncertain tax positions requires judgments to be made regarding the result of negotiations with, and enquiries from, tax authorities in a number of jurisdictions. Provisions for tax contingencies require management to make judgments and estimates in relation to tax issues and exposures. Amounts provided are based on management’s interpretation of country specific tax law and the likelihood of settlement. Tax benefits are not recognized unless the tax positions are probable of being sustained. In arriving at this position, management reviews each material tax benefit to assess whether a provision should be taken against full recognition of the benefit on the basis of potential settlement through negotiation and/or litigation.
Deferred taxes are recognized using the balance sheet liability method, for all temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying value on the balance sheet.
Deferred tax assets are recognized on net operating losses carried forward to the extent that it is probable that future taxable profit will be available to utilize those net operating losses carried forward. Management makes assumptions and estimates related to income projections to determine the availability of sufficient future taxable income. SCOR uses a discounted cash flow model comprised of an earnings model, which considers forecasted earnings, and other financial ratios of legal entity based on board approved business plans, which incorporate key drivers of the underwriting results. Business plans include assessments of gross and net premium expectations, expected loss ratios and expected expense ratios,
together with actuarial assumptions. To the extent that net operating losses carried forward cannot be utilized or expire, there may be deferred income tax expenses recorded in the future.
Deferred tax assets and liabilities are offset, if a legally enforceable right exists to set off current tax assets and liabi lities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
Functions. The operating segments are: the SCOR Global P&C segment, with responsibility for our property and casualty insurance and reinsurance (also referred to as “Non-Life”); and the SCOR Global Life segment, with responsibility for our life reinsurance (also referred to as “Life”). Each operating segment underwrites different types of risks and offers different products and services, which are marketed via separate channels; responsibilities and reporting within the Group are established on the basis of this structure.
The SCOR Global P&C segment operates in four business areas being: Property and Casualty Treaties; Specialty Lines
Risk Transfer); Business Solutions (large corporate accounts underwritten essentially on a facultative basis and occasionally as direct insurance for industrial groups and services companies); and Joint Ventures and Partnerships. The SCOR Global
As at 1 January 2011, the cost allocation methodology of the Group was refined in the preparation of segment information, resulting in a new corporate cost center being created, Group Functions. Group Functions is not an operating segment and does not generate revenues. The costs in Group Functions are Group related costs that are not directly attributable to either the Non-Life or Life segments. Group Functions includes the cost of departments fulfilling duties for the benefit of the whole
The following table sets forth the operating income for each of the Group’s operating segments and its corporate cost center for the financial years ended 31 December 2012, 2011, and 2010 as if Group Functions had been separately reported for all financial years under view.
Change in ceded unearned premiums - 8 - - 8 (1) 32 - - 31 1 7 - - 8
Realized capital gains/(losses) on investments 24 137 - - 161 40 148 - (1) 187 52 157 - (2) 207
OPERATING RESULTS (BEFORE IMPACT OF ACQUISITIONS) 220 524 (101) 2 645 211 185 (70) (3) 323 203 359 (70) (2) 490
of which other income and expenses excluded from combined ratio calculation - (27)
(1) Inter-segment recharges of expenses are eliminated on consolidation (2) Technical results are the balance of income and expenses allotted to the insurance business
The following tables set forth the Group’s gross written premiums by geographic region as well as certain assets and liabilities for the financial years ended 31 December 2012, 2011, and 2010.
The distribution by geographic region, based on subsidiary location, is as follows: FOR THE YEAR ENDED 31 DECEMBER
Share of retrocessionaires in insurance and investment contract liabilities 539 783 1,322 402 849 1,251
Asia and rest of the world Total Insurance business investments 17,764 2,752 598 21,114 16,056 3,578 514 20,148
The cash flows, by segment, are presented as follows: 20.1.6.3 NOTE 3 - ACQUISITIONS AND DISPOSALS
The following sections describe acquisitions and disposals which either occurred or for which the accounting was finalized in
On 9 August 2011, SCOR acquired the mortality risk reinsurance business of Transamerica Re, a part of AEGON.
The total consideration for the acquired mortality risk reinsurance business of Transamerica Re amounts to EUR 644 million
(USD 916 million). In May 2012 SCOR received from the final net settlement and purchase price agreement a redemption of
The transaction was financed by SCOR through the use of own funds and limited debt issuance, without the issuance of any new shares.
In accordance with IFRS 3, the accounting of a business combination can be reviewed within one year from the acquisition date.
Life Total Cash and cash equivalents at 1 January 705 576 1,281 687 320 1,007 752 573 1,325
Net cash flows from investing activities (464) 26 (438) (355) (225) (580) (289) (441) (730)
Effect of changes in foreign exchange rates - 8 8 39 13 52 48 22 70
(EUR 769 million). These changes reflect the availability and use of more up to date information.
Other assets and liabilities have been recorded at their estimated fair value.
The management of SCOR measured the fair value of the separately recognizable identifiable assets acquired and the liabilities assumed as at the acquisition date. The cost of the investment was lower than the fair value of the net assets acquired. This difference, or gain from bargain purchase of EUR 127 million, was recorded in the consolidated statement of income for the year ended 31 December 2011 of the SCOR Group.
SCOR recognised the redemption received from AEGON in May 2012 and the changes in the fair value of the separately recognized identifiable assets and liabilities at the end of the measurement period of one year from the acquisition date in the consolidated balance sheet as at 31 December 2012.
The share of the mortality risk reinsurance business of Transamerica Re income included in the SCOR Group’s consolidated income corresponds to the results generated during the period from 9 August 2011, the date of acquisition by the SCOR Group, up to the end of the reporting period, 31 December 2011.
Pro forma information The pro forma financial information as at 31 December 2011 is presented to illustrate the effect on the Group’s statement of income of the Transamerica Re acquisition as if the acquisition had occurred on 1 January 2011. The Transamerica Re information is based on the estimated revenues and net income of the acquired business for the twelve month period ended 31 December 2011 and includes estimates for the impact of purchase accounting. The pro forma information is not necessarily indicative of what would have occurred had the acquisition and related transactions been made on the dates indicated, or of the future results of the Group.
IFRS (second column in the pro forma statement of income presented below);  The pro forma adjustments to adjust the standalone statement of income of SCOR Group and Transamerica Re as though the acquisition of Transamerica Re would have occurred on 1 January 2011 (third column of the pro forma statement of income presented below).
Investment income has been determined based on historical yields of Transamerica Re (“TARe”) for 1 January 2011 to 9 August 2011. Actual yields have been applied from acquisition date to year-end. As such, no pro forma adjustment has been made.
For the purpose of presenting pro forma information, Transamerica Re DAC amortization has been excluded and VOBA
SCOR Group to finance the Transamerica Re acquisition have been assumed to be recorded beginning on 1 January 2011.
Transamerica Re acquisition have been assumed to be recorded in the opening balance sheet as at 1 January 2011. The deferred taxes are determined on the tax rate of country in which predominantly the costs have been incurred. The tax rates applied are 35% for adjustments that occurred in the US and 12.5% for adjustments that occurred in Ireland. The total corporate income tax effect related to the afore-mentioned pro forma adjustments amounted to EUR (2) million.
On 4 December 2009, SCOR acquired 100% of the capital and voting rights of XL Life America Inc. from XL Capital Ltd and entered into a retrocession contract to assume reserves related to this business. The business acquired showed strong compatibility with SCOR’s Life strategy that is rooted in focusing on traditional protection business that is not correlated with economic risks. The acquisition helped SCOR Global Life strengthen its services in the mortality-protection field and improve SCOR’s market position in the U.S.
The total consideration for the transaction of EUR 31 million was settled in cash and was entirely self-financed.
As from the acquisition date of 4 December 2009, XL Life America Inc. was fully consolidated by SCOR. This resulted in recognition of VOBA of EUR 20 million and a gain from bargain purchase of EUR 14 million in 2009.
For the purposes of impairment testing, goodwill acquired in a business combination is allocated by SCOR to the groups of cash generating units (CGUs) that are expected to benefit from the profitability and synergies of the business combination.
SCOR groups its CGUs by its operating segments, SCOR Global P&C and SCOR Global Life. This is consistent with the way that SCOR manages and monitors its business and cash flows.
The annual goodwill impairment tests conducted for both SCOR Global P&C and SCOR Global Life segments show a fair value in excess of the total carrying value. Consequently, the result of the goodwill impairment tests is that no goodwil l impairment charges were recognized for the years ended 31 December 2012, 2011 and 2010 respectively.
The IFRS 4 liability adequacy testing which includes VOBA recoverability, showed no indicators of impairment for the years
Other intangible assets with finite useful lives at 31 December 2012 were EUR 92 million compared with EUR 82 million at 31 December 2011. A component of this balance relates to the joint-venture agreement with the Medical Defense Union
(MDU), acquired through the Converium business combination. During and subsequent to the financial year end, SCOR
The Group amortizes its other intangibles with a finite life over a 2 to 10 year period dependent on the specific circumstances of each arrangement.
The additions during the year ended 31 December 2012 of EUR 30 million comprise mainly software development cost capitalized relating to the Group’s general ledger, technical accounting system and internal model of the Group.
EUR 7 million for the years ended 31 December 2012, 2011, and 2010 respectively.
Software which is not in use anymore with a global value of EUR 16 million has been disposed of. This software was fully amortized in prior periods.
Tangible assets as at 31 December 2012 were EUR 541 million compared to EUR 515 million as at 31 December 2011.
The additions to tangible assets in 2011 were mainly related to the following acquisitions: On 1 July 2011, SCOR Group finalized the purchase of Kléber SAS, whose primary asset is an office building located in
On 6 July 2011, SCOR Holding Switzerland AG, a wholly owned subsidiary of the Group, acquired PPG Lime Street Ltd, a company whose primary asset is a building located in London. This transaction resulted in an increase of the Group’s fixed assets of EUR 53 million (GBP 47 million) in 2011.
The change in scope of consolidation in 2011, presented in the table above, related to the acquisition of a company whose main asset is a share in an aircraft of EUR 18 million.
December 2012, except for one floor which is still rented. The Group has returned it on 28 December 2012, date of its lease termination, and all the related guarantees have been cancelled.
The insurance business investments of the Group can be analyzed as follows: Net book value as at 31 December (1) In EUR million 2012 2011
Analysis of insurance business investments and financial liabilities carried at fair value by valuation method: The level in which an investment is categorized within the fair value method hierarchy is determined on the basis of the lowest level of input that is significant to the fair value measurement of that instrument. The significance of an input is
therefore assessed against the fair value measurement in its entirety. Assessing the significance of particular inputs into the fair value measurement requires judgment, considering factors specific to the instrument.
The Group has certain investments which are valued based on models prepared by independent external third parties using market inputs. These are primarily comprised of structured products, other than agencies for which the market is considered active, private placements, inflation linked government assimilated bonds and specific alternative investments. Similarly, the
Included within this category are those instruments whose fair value is not based on observable market inputs. These instruments are neither supported by prices from observable current market transactions in the same instrument, nor are they based on available market data. As at 31 December 2012, the main asset class within the Level 3 fair value measurement category consists of derivative instruments primarily relating to the Atlas catastrophe agreements. Further detail on the valuation of these derivative instruments is included within Note 8 - Derivative Instruments.
There have been no material transfers between Level 1 and Level 2 in 2012 and 2011 respectively. There were also no changes in the purpose of any financial asset that subsequently resulted in a different classification of that asset.
The movement in Level 3 investments since 31 December 2010 is mainly due to foreign exchange impacts and the change in fair value of Atlas vehicles.
The EUR (50) million total losses recorded in the statement of income in 2012, include EUR (50) million of change in FV
(2011: EUR (31) million; 2010: EUR (25) million) and no realized gains/losses (2011: Nil; 2010: Nil).
The properties held by the Group and considered as investment property are owned either by SCOR Auber, a 100%
The rental income related to investment property was EUR 38 million in 2012 (2011: EUR 37 million) and the direct operating expenses EUR 2 million (2011: EUR 2 million).
(a) Credit ratings – fixed income securities classified as available-for-sale or fair value through income
Total fixed income securities as at 31 December 2011 3,079 2,114 1,784 1,022 272 101 8,372
(b) Maturity – fixed income securities classified as available-for-sale and fair value through income
The following table summarizes the fixed income securities and unrealized gains / (losses) by class of fixed income security: As at 31 December 2012 As at 31 December 2011
(1) As at 31 December 2012, SCOR has no investment exposure related to sovereign risk of Portugal, Ireland, Italy, Greece, Hungary or Spain (2) The balance includes EUR 56 million fixed income securities which are classified as fair value through income (as at 31 December 2011: EUR 38 million)
Transferred to consolidated net income during the period, net of impairment 47 (18) 46
 Tax effects on above stated items of EUR 29 million (2011: (66) million)
The Group analyses its unrealized gains / (losses) on equity securities as follows (amounts are stated net of impairment): In EUR million As at 31 December 2012
(1) Other also includes one listed investment with an unrealized loss/gain of EUR (11) million (2011: EUR 15 million) deemed not to be impaired given the strategic nature of the investment 20.1.6.7 NOTE 7 - LOANS AND RECEIVABLES
Loans and receivables include primarily receivables from cash deposits made at the request of ceding companies as collateral for commitments (insurance contract liabilities), short term investments and related accrued interest. Short term investments includes government bonds, certificates of deposit (CDs) and treasury bills (T-bills) maturing between 3 and 12 months from the date of purchase. CDs and T-bills maturing in more than 12 months from date of purchase are included in
Short term investments are carried at fair value. Other loans and receivables are carried at cost which approximates to the fair value at 31 December 2012 and 2011.
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 31 March 2014. This transaction succeeds Atlas IV
On 12 December 2011 SCOR successfully placed a new catastrophe bond (“Cat bond”), Atlas VI Capital Limited Series 2011-1 and 2011-2, whichprovides 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 will succeeded Atlas V