For the list of the stock options plans currently in force within the Group refer to Appendix A – 1.5. Notes to the corporate financial statements, Note 12 – Stock Options.
SCOR U.S. Group Retirement and Savings Plan 1 401(k) Plan - Participants are allowed to make pre-tax contributions up to 50% of their bi-weekly salary. Employer matches up to 4% of bi-weekly salary.
Individual Funds accumulate from contributions and investment returns. At retirement it is possible to take a part of the fund as a tax free cash lump sum and the balance must be used to provide a pension via annuity purchase or pension drawdown.
The amount of annual benefit is paid at Normal Retirement Date in monthly installments for life is 46% of Average Monthly Compensation, multiplied by a fraction, not exceed 1 and based on seniority upon retirement. The SCOR US Group Pension Plan was frozen on 10/01/2006.
The Generali Employees’ Retirement Plan provides participants with a benefit at retirement based on age, final average earnings and service. The Plan is funded by the employer.
The pension is equal to 1/60th of Final Pensionable Salary for each year of membership of the scheme up to Normal Retirement Date.
The Scheme closed to future accrual on 31 December 2013 with past service accrued benefits preserved in the Scheme as deferred pensions.
Executive Committee members benefit from the collective pension schemes in place in their entity and do not have any specific plan except for members with Swiss contracts who have been awarded a similar advantage than the one granted to the other French Executive Committee members hired before 30 June 2008.
18.1 Significant shareholders known to SCOR 177 18.2 Negative statement as to the absence of differences between the voting rights of various shareholders 180 18.3 Direct or indirect control by one 18.4 Agreement which could result in a subsequent change in control 180
18.1 Significant shareholders known to SCOR Distribution of capital (number of shares, % of capital and voting rights) – (i) shareholders having more than 2.5% of the registered capital and/or voting rights and (ii) shareholders members of the Board of Directors (on the basis of a study of identifiable share bearers ("Titres aux Porteurs Identifiables" – "TPI") conducted by the Company as at 10 December 2014; there has been no significant change in the distribution of capital between 10 December 2014 and 31 December 2014): As at 31 December 2014 Number of shares % of capital % voting rights .(1) Patinex AG 15,000,000 7.78% 8.06% Tweedy, Browne Company LLC 9,919,884 5.15% 5.33% Alecta Kapitalförvaltning AB 8,000,000 4.15% 4.30% Groupe Malakoff (2) 5,875,506 3.05% 3.16% Allianz Global Investors Europe GmbH 5,030,476 2.61% 2.70% Epoch Investment Partners, Inc 4,920,994 2.55% 2.64% Treasury Shares 6,593,132 3.42% - Employees (3) 5,529,173 2.87% 2.97% Others 131,822,314 68.42% 70.84% TOTAL 192,691,479 100.0% 100.0%
(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) Member of the Board (3) Employee shares eligible to vote, excluding sold or transferred employee shares; previous Registration Document figures contained also sold or transferred shares Source: TPI and Thomson One
(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) Member of the Board (3) Including sold or transferred employee shares Source: TPI and Ipreo
To SCOR's knowledge, there was no other shareholder than those indicated in the table above holding, directly or indirectly, alone or in concert, more than 2.5% of the share capital or voting rights of the Company as at 31 December 2014, 31 December 2013 and 31 December 2012. SCOR regularly conducts TPI searches to find out the number and identity of its bearer shareholders. The results of those analyses are presented in the following table: TPI Date December 2011 December 2012 December 2013 December 2014 Number of shareholders 22,624 20,618 19,923 22,304
To SCOR’s knowledge, there is not any shareholder agreement, or other agreement, among Company shareholders pursuant to which they act in concert. To the Group’s knowledge, there have been no transactions between Directors, officers, or shareholders holding more than 2.5% of the Company’s share capital (or of the company controlling them) and the 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.
On 11 April 2013, BNP Paribas Group declared that it had exceeded the registered thresholds of 5.00% of the capital in SCOR and that it held 9,946,005 shares or 5.16% of the capital and 9,342,590 voting rights or 4.84% of voting rights in SCOR. On 29 April 2013, Federal Finance Gestion declared that it had exceeded the registered threshold of 2.5% of the capital and voting rights in SCOR and that it held 5,019,879 shares or 2.6% of the capital and 5,019,879 voting rights or 2.6% of voting rights in SCOR. On 28 May 2013, BNP Paribas Asset Management declared that it had exceeded the registered threshold of 5.00% of the capital and voting rights in SCOR and that it held 10,303,599 shares or 5.36% of the capital and 9,727,973 voting rights or 5.06% of voting rights in SCOR. On 25 November 2013, BNP Paribas Asset Management declared that it had fallen below the registered threshold of 5.00% of the capital and voting rights in SCOR and that it held 9,271,445 shares or 4.81% of the capital and 9,271,445 voting rights or 4.81% of voting rights in SCOR. On 20 February 2014, BNP Paribas Investment Partners declared that it had fallen below the registered threshold of 2.5% of the capital and voting rights in SCOR and that it held 4,431,440 shares or 2.30% of the capital and 4,375,420 voting rights or 2.27% of the voting rights in SCOR. On 12 May 2014, Amundi Asset Management declared that it had exceeded the registered threshold of 2.5% of the capital and voting rights in SCOR and that it held 5,821,202 shares or 3.01% of the capital and 5,821,202 voting rights or 3.01% of the voting rights in SCOR. On 21 May 2014, Amundi Asset Management declared that it had fallen below the registered threshold of 2.5% of the capital and voting right in SCOR and that it held 4,755,109 shares or 2.46% of the capital and 4,755,109 voting rights or 2.46% of the voting rights in SCOR. On 1 July 2014, Allianz Global Investors declared that it had exceeded the registered threshold of 2.5% of the capital and voting rights in SCOR and that it held 4,851,490 shares or 2.52% of the capital and 4,851,490 voting rights or 2.52% of the voting rights in SCOR. On 14 July 2014, Tweedy Browne Company declared that it had exceeded the registered threshold of 2.5% of the capital and voting rights in SCOR and that it held 7,802,224 shares and 7,802,224 voting rights
On 21 October 2014, Tweedy Browne Company declared that it exceeded the registered threshold of 5.00% of the capital and voting rights in SCOR and that it held 9,836,884 shares of the capital and 9,488,574 voting rights.
As at 31 December 2013:  SCOR held 7,343,237 treasury shares;  The total number of voting rights amounted to 192,757,911 (including the voting rights attached to treasury shares).
18.2 Negative statement as to the absence of differences between the voting rights of various shareholders Until 3 January 2009, pursuant to Article 8 (“Rights attached to each share”) of the bylaws, for two years after the Company’s reverse stock split, as decided by the Company’s Combined Shareholders’ Meeting on 16 May 2006 in its seventeenth resolution, each share with a par value of EUR 0.78769723 entitled the holder to one vote and each share with a par value of EUR 7.8769723 entitled the holder to ten votes, so that the number of votes attached to the shares remains proportional to the percentage of share capital they represent. Since 3 January 2009 and the completion of the Company’s reverse stock split, no further shares with a par value of EUR 0.78769723 are in existence and each share with a par value of EUR 7.8769723 entitles the holder to one vote.
18.4 Agreement which could result in a subsequent change in control Not applicable.
19.1 Related party transactions 183 19.3 Special report of the auditors on regulated agreements and commitments 183
19.1 Related party transactions Transactions with related parties as required by the regulations adopted under EC regulation No. 1606/2002, entered into by the Group appear in Section 20.1.6 – Notes to the consolidated financial statements, Note 24 – Related party transactions.
19.2 Regulated agreements Regulated agreements and commitments in accordance with Articles L. 225-38 and following of the French Commercial Code appear in the Auditors special report in Section 19.3.
However, we are required to inform you in accordance with Article R. 225-31 of the French commercial code (Code de Commerce) concerning, if any, the implementation of the agreements and commitments which were already approved by the shareholders’ meeting.
Agreements and commitments subject to the authorization of the annual general meeting of the shareholders
In accordance with article L. 225-40 of the French commercial code (Code de Commerce) we have been advised of certain related party agreements and commitments which received prior authorization from your Board.
Two new agreements and commitments were signed during the year. Moreover, certain agreements which were authorized in a prior year and which were continued during the year were amended during 2014.
At its meeting of 18 March 2008, the Company’s Board of Directors authorized pursuant to the Article L.225-38 of the French commercial code, the execution of an additional pension plan, which was ultimately executed on 15 May 2008. At its meeting of 5 November 2014, the Company's Board of Directors approved an amendment to the settlement of supplementary pension plan that provides for:  cap to 45% of the beneficiary reference income the amount of rent that may be received under the plan; and  the progressive increase in beneficiaries' rights at 5% of the reference salary per year, as required by the
In accordance with article R. 225-30 of the French commercial code (Code de Commerce), we have been advised that the implementation of the following agreements and commitments which were approved in prior years by the General Meeting remained current during the year, either with respect to the duration of the Convention or by the effect of an extension.
1. With Mr. Denis Kessler, Chairman and Chief Executive Officer of SCOR SE
May 2012, and are described in Appendix B - Report of the Chairman of the Board of Directors on the conditions for preparing and organizing the work of the Board and on internal control procedures and risk management in accordance with Article L. 225-37 of the French Commercial Code. Pursuant to a decision dated 26 July 2012, taken in accordance with Article L. 225-42-1 of the French Commercial Code and with the provisions of Article L. 225-40 of the French Commercial Code, the Board of Directors of the Company has authorized, based on the recommendations of the Compensations and Nominations Committee of 25 July 2012, and in accordance with the decision of the Board of Directors dated 3 May 2012 and the subsequent commitments made by the Chairman and Chief Executive Officer during the Mixed Shareholders’ Meeting of 3 May 2012, the adoption of an amendment to the regulated agreement relating to the commitments made for the benefit of the Chairman and Chief Executive Officer, the terms of which are outlined below, with respect notably to the compensation elements taken into account for the indemnity to be granted to Mr. Denis Kessler in case of his forced departure from the SCOR Group, as well as the performance conditions which this indemnity is subject to. In the event that the Chairman and Chief Executive Officer is dismissed for fault or following a manifestly negative performance of the Company (the non-realization of the performance condition (C_n) defined below for at least two of the three preceding years), no indemnity will be paid to the Chairman and Chief Executive Officer. In the event of a forced departure or a revocation ad nutum typically due to diverging views on the strategy of the Group, the Chairman and Chief Executive Officer will benefit from an indemnity limited to the amount of fixed and variable compensation paid to him during the last twenty-four months preceding the date of his departure from the Group. The payment of this indemnity shall be subject to the satisfaction of the performance condition (C_n) defined below for at least two of the last three fiscal years preceding the date of departure of the Chairman and Chief Executive Officer. In the event that the Chairman and Chief Executive Officer is dismissed or his departure is imposed due to a hostile offer resulting in a change of control in the SCOR Group, the Chairman and Chief Executive Officer will benefit from an indemnity limited to the amount of fixed and variable compensation paid to him by the Group during the last twenty-four months preceding the date of his departure from the Group. The payment of the indemnity is subject to the satisfaction of the performance condition (C_n) defined below for at least two of the last three years preceding the date of departure of the Chairman and Chief Executive Officer. In addition, the performance stock and stock options granted to the Chairman and Chief Executive Officer before his departure shall be subject, in their totality, to the only performance conditions of each plan as validated by the Board of Directors at the time of attribution: thereby focusing on the common interest to add value to the Group in the scope of the offer.
2. With BNP Paribas a) Nature and purpose of the 1st agreement
Authorization prior to the signature of a cash-pooling contract with BNP Paribas. Related Persons
Paribas to establish a notional cash-pooling between SCOR and the European entities of the Group.
Contract between SCOR SE and its subsidiaries participating in the notional cash-pooling agreement.
 SCOR Global P&C Ireland Ltd. 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, pay 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 2012, 2013 and 2014 financial years.
Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE and as member of the Board of Directors of BNP Paribas.
The Master Trust Agreement was signed on 9 August 2011 and gave rise to a non-material payment during the 2012, 2013 and 2014 financial years.
PLC resulting from the merger of these two companies taking effect on 1 January 2013.
Within the framework of this amendment SCOR SE has to renew its financial instruments account agreement into which assets a minimum of EUR 5,000 assets have to be deposited.
The companies party to this agreement, as amended, are SCOR SE, SCOR Global P&C SE, SCOR Global Life SE, SCOR Switzerland AG and SCOR Global Life Reinsurance Ireland PLC. The other companies within the Group could equally benefit from this agreement, as amended.
Amendment #5 to the Facility Agreement was signed on 7 June 2013.
Authorization to sign a short-term Facility Agreement between SCOR SE, BNP Paribas and Deutsche Bank.
Related Persons Mr. Denis Kessler as Chairman and Chief Executive Officer of SCOR SE and as Member of the Board of Directors of BNP Paribas and Mrs. Fields Wicker Miurin as Member of the Board of Directors of SCOR SE and BNP Paribas.
Amendment to the additional pension plan subject to Article 39 of the French Tax Code (Code Général des Impôts). Terms At its meeting of 18 March 2008, the Company’s Board of Directors authorized pursuant to the Article L.225-38, the execution of an additional pension plan, which was ultimately executed on 15 May 2008. This additional pension plan purports to determine the terms and conditions of additional pension plan benefits granted
The eligible person who retired from Company is entitled to additional benefits under this pension plan if he or she complies with the terms and conditions of the additional pension plan on the date of his or her departure, including a seniority of at least five years at the time of departure and obtaining the implementation of his or her pension benefits under the mandatory pension plans.
20.1 Historical financial information: consolidated financial statements 192 20.2 Auditing of historical consolidated financial information 279 20.3 Sources of financial information not extracted from the audited Financial Statements of the issuer and indication of such absence of audit 281 20.4 Date of most recently audited financial information 281 20.5 Interim and other financial 20.6 Dividend distribution policy 281 20.7 Litigation and arbitration 20.8 Material change in financial or commercial situation 281
20.1 Historical financial information: consolidated financial statements In application of article 28 of the EC Commission Regulation No. 809/2004, the following information is incorporated by reference in this Registration Document:  The consolidated financial statements as at 31 December 2013 are included from pages 198 to 300 and the auditors’ report on these consolidated financial statements as at 31 December 2013 is included from pages 300 to 307 of the Registration Document filed with the Autorité des marchés financiers on 5 March 2014 under Number D.14-0117, (and from pages 195 to 297 and from pages 297 to 300, respectively, of the free translation into English of the above mentioned Registration Document. The translation is available on SCOR’s website www.scor.com).
The consolidated financial statements for the year ended 31 December 2014 are presented below: 20.1.1 CONSOLIDATED BALANCE SHEETS
ASSETS As at 31 DECEMBER In EUR million 2014 2013 Intangible assets 2,385 2,307 Goodwill Notes 3, 4 788 788 Value of business acquired Note 4 1,455 1,393 Other intangible assets Note 4 142 126 Tangible assets Note 5 542 544 Insurance business investments 24,977 22,272 Real estate investments Note 6 845 861 Available-for-sale financial assets Note 6 14,684 12,067 Investments at fair value through income Note 6 450 369 Loans and receivables Note 7 8,947 8,881 Derivative instruments Note 8 51 94 Investments in associates Note 9 108 63 Share of retrocessionaires in insurance and investment contract liabilities Note 16 1,195 1,140 Other assets 7,099 6,321 Deferred tax assets Note 19 825 813 Assumed insurance and reinsurance accounts receivables Note 10 4,591 4,179 Receivables from ceded reinsurance transactions Note 10 192 102 Tax receivables 127 129 Other assets 277 190 Deferred acquisition costs Note 11 1,087 908 Cash and cash equivalents Note 12 860 1,514
TOTAL SHAREHOLDERS' EQUITY 5,729 4,980 Financial debt Note 14 2,232 2,053 Subordinated debt 1,743 1,379 Real estate financing 469 497 Other financial debt 20 177 Contingency reserves Note 15 297 265 Contract liabilities 25,839 24,337 Insurance contract liabilities Note 16 25,720 24,204 Investment and financial reinsurance contract liabilities Note 16 119 133 Other liabilities 3,069 2,526 Deferred tax liabilities Note 19 388 366 Derivative instruments Note 8 78 37 Assumed insurance and reinsurance payables Note 10 428 410 Accounts payable on ceded reinsurance transactions Note 10 1,168 988 Tax payables 87 194 Other liabilities 920 531
Acquisition related expenses (1) (25) (13) Gain from bargain purchase Note 3 - 227 -
OPERATING RESULT 825 783 632 Financing expenses Note 14 (145) (130) (106) Share in results of associates (5) (13) -
CONSOLIDATED INCOME, BEFORE TAX 675 640 526 Corporate income tax Note 19 (166) (91) (108)
CONSOLIDATED NET INCOME 509 549 418 Attributable to: Non-controlling interests (3) - - Group share 512 549 418
Disposals of consolidated entities, net of cash disposed of - - (3)
Cash generated by issuance of financial debt Note 14 348 368 294
Cash used to redeem financial debt Note 14 (193) (138) (4) (75)
Cash flows provided by / (used in) financing activities (235) (107) (146)
Cash and cash equivalents at 1 January Note 12 1,514 1,466 1,281
Shareholders' equity at 1 January 2012 1,513 4,407 Allocation of prior year net income - - Net income for year ended 31 December 2012 418 Other comprehensive income net of tax 207 Revaluation – Availablefor -sale financial assets 8 Effect of changes in foreign exchange rates -
Shareholders’ equity at 31 December 2012 1,515 840 66 2,079 (163) 418 45 7 4,807 Allocation of prior year net income - - - 418 - (418) - - - Net income for year ended 31 December 2013 - - - - - 549 - - 549 Other comprehensive income net of tax - - (45) (171) - - - - (216) Revaluation – Available-forsale financial assets - - (89) - - - - - (89) Shadow accounting - - 29 - - - - - 29 Effect of changes in foreign exchange rates - - - (163) - - - - (163) Net gains / (losses) on cash flow hedges - - - 8 - - - - 8 Taxes recorded directly in equity - - 15 (6) - - - - 9 Remeasurements of postemployment benefits - - - 9 - - - - 9 Other changes - - - (19) (3) - - - - (19) Comprehensive income, net of tax - - (45) (171) - 549 - - 333 Share-based payments - - - 16 21 - (12) - 25 Other changes - - - - - - - 33 (1) 33 Capital transactions (2) 3 2 - - - - - - 5 Dividends paid - - - (223) - - - - (223) Shareholders' equity at 31 December 2013 1,518 842 21 2,119 (142) 549 33 40 4,980
Shareholders’ equity at 31 December 2013 1,518 842 21 2,119 (142) 549 33 40 4,980 Allocation of prior year net income
Revaluation – Availablefor -sale financial assets - - 236 - - - - - 236 Shadow accounting - - (36) - - - - - (36) Effect of changes in foreign exchange rates - - - 361 - - - - 361 Net gains / (losses) on cash flow hedges - - - (8) - - - - (8) Taxes recorded directly in equity employment benefits - - - (43) - - - - (43) Other changes - - - 3 - - - - 3 Comprehensive income, net of tax - - 153 329 - 512 - (3) 991 Share-based payments - - - - 3 - 6 - 9 Other changes - - - - - - (5) (2) (7) Capital transactions (1) - (1) - - - - - - (1) Dividends paid - - - (243) - - - - (243) Shareholders' equity at 31 December 2014
(1) Movements presented above relate to the issuance of shares related to the exercise of stock options for EUR 12 million (EUR 6 million in share capital and EUR 6 million in additional paid-in capital). This resulted in the creation of 711,022 new shares during the year ending 31 December 2014. These movements were compensated by a reduction in group capital by cancellation of treasury shares for EUR (13) million (EUR (6) million in share-capital and EUR (7) million in additional paid-in capital)
SCOR SE (“the Company”) is a European Company (Societas Europaea) domiciled in France and governed by the provisions of French law relating to European Companies as well as by the French corporate law provisions applicable to Sociétés Anonymes where this is not contrary to the specific provisions applicable to European Companies. SCOR’s shares are publicly traded on the Eurolist by Euronext Paris stock market and on the SIX Swiss Exchange. The principal activities of the Company and its subsidiaries (“the Group” or “SCOR”) are Life and Non-Life reinsurance.
The preparation of the consolidated financial statements requires management to make certain judgments, assumptions and estimates. These affect the reported amounts of revenue, expenses, assets and liabilities, and the disclosure of contingent assets and liabilities at the reporting date. Management reviews these estimates and assumptions periodically, based on past experience and other factors. The actual outcome and results could differ substantially from estimates and assumptions made. The most material financial statement captions for which the Group uses estimates and assumptions are reinsurance reserves, receivables and liabilities relating to reinsurance operations, the fair value and impairment of financial instruments, intangible assets, retirement and other defined benefit plans and deferred taxes, in particular with respect to the recognition of deferred tax assets and the availability of future taxable profit against which carryforward tax losses can be used.
All material entities, including structured entities, over which SCOR has control are fully consolidated. SCOR controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the entity’s activities.
Structured entities are entities that have been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity.
The Group’s investments in associated companies are recorded using the equity method. Associated entities are companies in which the Group exercises significant influence but no control or joint control. Significant influence generally occurs when the Group owns, directly or indirectly, between 20% and 50% of the outstanding voting rights. For certain associates accounted for under the equity method the Group uses consistently provisional financial year-end information and makes adjustments, if necessary, in the following reporting period. Joint arrangements, where classified as joint ventures, i.e. the parties have rights to the net assets of the arrangement, are accounted for using the equity method.
The SCOR Group, through SCOR Global Investments, acts as a fund manager for various investment funds. When determining whether the Group is an agent or principal with respect to those investment funds, the power to direct the relevant fund activities, i.e. the scope of its decision making authority over the funds, as well as the aggregated economic interest, including the returns and fund management remuneration generated for the Group are taken into account.
The financial statements of material subsidiaries are prepared for the same accounting period as for the parent company. All material intra-Group balances and transactions including the results of inter-company transactions are eliminated. The Group’s consolidated financial statements are presented in euros (EUR) and all values are rounded to the nearest EUR 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 2014 financial statements are as follows: EUR per foreign Ending rate Average rate currency unit As at 31 December 2014 Q4 2014 Q3 2014 Q2 2014 Q1 2014 USD 0.8237 0.8084 0.7406 0.7296 0.7304 GBP 1.2839 1.2726 1.2344 1.2221 1.2131 CAD 0.7111 0.7077 0.6774 0.6661 0.6593
For 2012, the ending rates used for USD, GBP and CAD were 0.7579, 1.2253 and 0.7612 EUR per foreign currency unit respectively. The average rates used were 0.7754, 1.2331 and 0.7758 respectively.
(D) IFRS STANDARDS EFFECTIVE DURING THE PERIOD AND IFRS STANDARDS NOT YET EFFECTIVE
The Group has adopted the following new and amended International Financial Reporting Standards and Interpretations as adopted by the European Union that are relevant to SCOR’s consolidated financial statements:  IFRS 10 – Consolidated financial statements replaces the provisions of IAS 27 - Consolidated and Separate financial statements that address the accounting for consolidated financial statements, and the issues raised in
 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: joint operations and joint ventures. To assess whether there is joint control IFRS 11 uses the principle of control set forth in IFRS 10. The existing option to account for jointly controlled entities under IAS 31 using proportionate consolidation is removed in this standard. IFRS 11 had no impact on the Group’s consolidated financial statements.
 IFRS 12 – Disclosure of Interests in Other Entities, includes all the disclosures that were previously included in IAS 27, IAS 31 and IAS 28 - Investment in Associates. A number of new disclosures are added to the existing requirements such as the judgments made to determine whether control of another entity exists IFRS 12 is a “disclosure only” standard and therefore had no effect on profit or loss or equity of the Group.
 As a consequence of the new IFRS 10 and IFRS 12 standards, what remains of IAS 27 is limited to accounting for subsidiaries, jointly controlled entities, and associates in separate financial statements. The Group does not present standalone IFRS financial statements.
 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. These amendments do not impact the Group’s financial position or performance.
 other non-monetary items are translated: - at the exchange rates in effect on the transaction date for items valued at historical cost; or - at the end of period exchange rates if they are valued at fair value; and - to the extent that any gains or losses arise, these are directly recorded in shareholders’ equity. In particular this affects foreign exchange differences for available for sale equity securities and exchange differences resulting from the conversion of these items which are also directly recorded in shareholders’ equity;  the gains and losses resulting from the translation of net foreign investment hedges are recorded in shareholders’ equity. They are recognized in the statement of income upon the disposal of the net investments.
Business combinations and goodwill Business combinations are accounted for using the purchase method of accounting which requires that the assets acquired and liabilities assumed be recorded at the date of acquisition at their respective fair values.
Real estate currently held by the Group is classified as investment property when it is held to earn rental income, as 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 Land Indefinite (not depreciated) Buildings Building structure and exterior 30 – 80 years Insulation 30 years Technical installations 20 years Fixtures and fittings 10 to 15 years
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 flow to the Group.
At the end of each reporting period, properties are assessed to determine whether there is any indication of impairment. One such indicator is that the building’s market-value is below its carrying value. If any such indicators are found to exist, the Group assesses the recoverable amount of the building in question. The recoverable amount is the higher of the property’s fair value less cost to sell and its value in use. The value in use is assessed using an internal discounted cash flow model based on current market assumptions and considers rental status, completeness of construction and renovation work, as well as recent developments within the local real estate market. If the recoverable amount is greater than 20% below the carrying amount, the resulting impairment loss is recognized in the statement of income.
Own use properties are assessed for impairment whenever there is an indication that the property may be impaired. Own use properties are considered as corporate assets, which do not generate cash inflows independently. Hence, the assessment is made at the level of the cash-generating units (CGU) or groups of CGUs to which the properties belong. Should impairment indicators exist, the Group determines the recoverable amount of the CGU or of the group of CGUs to which the property belongs and compares it to its carrying amount.
Rental income from investment properties is recognized on a straight-line basis over the term of current rental agreements.
Financial investments The Group classifies its financial assets in the following categories: available-for-sale, fair value through income, loans and accounts receivables and cash and cash equivalents. There are currently no assets classified as held-to-maturity. Sales and purchases of assets are recorded on the trade date. Once it has been 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 the Group has substantially transferred the risks and rewards inherent to the ownership of the financial asset.
(c) Loans and accounts receivables This category includes funds held by ceding companies as collateral for underwriting commitments included at the amount deposited.
Non-derivative financial assets, where payment is fixed or determinable and which are not listed on an active market, are also included within this category and are recognized at amortized cost using the effective interest rate method. 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.
Loans and accounts receivables include a provision for recoverability if deemed necessary.
Cash and cash equivalents comprise cash, net bank balances and short-term deposits or investments with a maturity less than three months at the date of purchase or deposit. Money market funds are also classified as cash equivalent, though only to the extent that fund invested assets qualify as cash equivalents, or there are strict fund management policies and limits that allow the funds to qualify as cash equivalents.
At initial recognition, all borrowings are recorded at fair value less directly attributable transaction costs. After initial recognition, they are measured at amortized cost using the effective interest rate method.
Derivative instruments are recorded and classified at fair value through income unless they are designated as hedging instruments.
Where an embedded derivative has been separated from its host contract, it is recognized in accordance with the guidance relating to the accounting for derivative financial instruments. 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.
Hedge effectiveness is monitored periodically by comparing changes in the fair value or cash flows of the hedged item to the changes in the fair value or cash flows of the hedge instrument in order to determine the degree of effectiveness. A derivative instrument designated as fair value hedge is initially recognized at fair value on the date on which the derivative contract is entered into. The carrying amount of the hedged item is adjusted for gains and losses attributable to the risk being hedged. The derivative is remeasured at fair value and gains and losses are recognized in the income statement.
For units in unit linked-trusts, shares in open-ended investment companies and derivative financial instruments (including real estate, interest rate and mortality swaps, options, etc.), fair value is determined by reference to either published bid-values, or modeled values which incorporate market inputs within the valuation assumptions.
The Group has certain investments which are valued based on models prepared by internal and external third parties using market inputs. These primarily comprise structured products, other than securities issued by government agencies for which the market is considered active, as well as hybrid and tier 1 and tier 2 corporate debt.
As the Group is responsible for determining the fair value of its investments, regular analysis is performed to determine whether prices received from third parties are reasonable estimates of fair value. The Group’s analysis includes: (i) a review of price changes made in the investment management systems; (ii) a regular review of pricing deviations between dates exceeding predefined pricing thresholds per investment categories; and (iii) a review and approval of extraordinary valuation changes noted. The Group may conclude the prices received from third parties are not reflective of current market conditions. In those instances, SCOR may request additional pricing quotes or apply internally developed valuations. Similarly, the Group may value certain derivative investments using internal valuation techniques based on observable market data. For unlisted equity instruments, fair value is determined according to commonly used valuation techniques.
The fair value of hedge funds managed by third parties is based on their Net Asset Value as issued by external asset managers. This Net Asset Value is regularly audited, at least annually. The fair value of floating rate and overnight deposits with credit institutions is their carrying value.
For fixed income securities, and loans and accounts receivables, an objective indicator of impairment relates primarily to proven default credit risk. Different factors are considered to identify those fixed income securities potentially at risk of impairment, including significant financial difficulty or default in payments, to enable the Group to conclude whether there is objective evidence that the instrument or group of instruments is impaired. For financial instruments where the fair value cannot be measured reliably and which are measured at cost, a regular analysis is completed to determine if this remains appropriate given the nature of the investment and factors such as amounts realized and the appearance or re-appearance of a market or reliable value. Impairment assessments are completed dependent on the underlying nature of the investment and the expected future cash flows.
Provisions are recognized when the Group has a present legal, contractual or constructive obligation as the result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Where the Group expects the provision to be reimbursed for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain.
Share issue costs Incremental external costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax from the proceeds of the issue.
Treasury shares Treasury shares and any directly related costs are recorded as a deduction from shareholders’ equity. When treasury shares are subsequently sold or reissued any consideration received is included in consolidated shareholders equity net of any directly related costs and tax effects. Accordingly, there is no related income, gain or loss recognized in the statement of income.
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.
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 available and the reserves are adjusted if necessary. Management considers many factors when establishing reserves, including:  information from ceding companies;  historical developments, such as reserve patterns, claims payments, number of claims to be paid and product mix;  internal methods to analyze the Group’s experience;  most recent legal interpretations concerning coverage and commitments;  economic conditions;  biometric developments such as mortality, morbidity and longevity; and
Unearned premium reserves are related to written premiums receivable but allocated to future risk periods. Share of retrocessionaires in insurance and investment contract liabilities are calculated according to the contractual conditions on the basis of gross reserves. Allowances are established for any specific expected credit risks.
Reserves for investment contract liabilities are recognized for reinsurance contracts, either life or Non-Life, that do not meet the risk transfer criteria described in IFRS 4.
Non-Life gross premiums written and earned are based upon reports received from ceding companies, supplemented by the Group’s own estimates of premiums written and earned for which ceding companies’ 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 US and Japanese catastrophe risks, agriculture risks in Brazil and certain other risks, premiums are earned commensurate with the seasonality of the underlying exposure.
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 to present a true and fair view.
Pension liabilities The Group provides retirement benefits to its employees, in accordance with the laws and practices of each country. The main plans are in France, Switzerland, the UK, the US and Germany. Group employees in certain countries receive additional pension payments, paid as an annuity or in capital upon retirement. The benefits granted to Group employees are either in the form of defined contribution or defined benefit plans. Plan assets are generally held separately from the Group’s assets.
For defined contribution plans the employer pays fixed contributions into a separate entity, with no legal or constructive obligation to pay further contributions. As a result, only contributions paid or due for the financial year are charged to the Group’s statement of income as administrative expenses.
For management purposes, the Group is organized into two operating segments and one corporate cost center; Group Functions. The operating segments are: the SCOR Global P&C segment, with responsibility for property and casualty insurance and reinsurance (also referred to as “Non-Life”); and the SCOR Global Life segment, with responsibility for 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.
Management reviews the operating results of the SCOR Global P&C and SCOR Global Life segments individually for the purpose of assessing the operational performance of the business and to allocate resources. No operating segments have been aggregated to form the SCOR Global P&C and SCOR Global Life reportable operating segments.
Gross written premiums 6,381 4,935 - - 11,316 5,405 4,848 - - 10,253 4,864 4,650 - - 9,514 Change in gross unearned premiums (18) (160) - - (178) (4) (71) - - (75) 3 (150) - - (147) Gross earned premiums 6,363 4,775 - - 11,138 5,401 4,777 - - 10,178 4,867 4,500 - - 9,367 Revenues associated with financial reinsurance 4 - - - 4 3 - - - 3 2 - - - 2 Gross benefits and claims paid
(5,047) (2,788) - - (7,835) (4,087) (2,967) - - (7,054) (3,780) (2,833) - (5) (6,613) Gross commission on earned premiums
Ceded written premiums (660) (518) - - (1,178) (591) (532) - - (1,123) (531) (445) - - (976) Change in ceded unearned premiums 1 30 - - 31 - 11 - - 11 - 8 - - 8 Ceded earned premiums (659) (488) - - (1,147) (591) (521) - - (1,112) (531) (437) - - (968) Ceded claims 438 167 - - 605 258 237 - - 495 458 177 - - 635 Ceded commissions 108 49 - - 157 112 52 - - 164 95 49 - - 144 Net results of retrocession
(1) (52) - - (53) (12) (56) - - (68) 3 (39) - - (36) Investment revenues 110 224 - - 334 88 215 - - 303 89 225 - 2 316 Interests on deposits 158 22 - - 180 155 21 - - 176 178 24 - - 202 Realized capital gains / (losses) on investments 32 103 - - 135 32 98 - - 130 24 137 - - 161 Change in fair value of investments - 8 - - 8 1 14 - - 15 - 8 - - 8 Change in investment impairment and amortization
(1) 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 2014, 2013, and 2012.
Key balance sheet captions by segment, as reviewed by the management, are split as follows: In EUR million SCOR
The following sections describe the acquisitions of companies fully consolidated that occurred in 2013.
The accounting for the acquisition of Generali U.S. generated a gain from bargain purchase of EUR 197 million as the fair value of net assets of EUR 784 million was in excess of the aggregate consideration.
The gain from bargain purchase included a foreign currency exchange loss of EUR 14 million.
Historic intangible assets, including goodwill, deferred acquisition costs and value of business acquired (VOBA) have been de-recognized.
The VOBA has been estimated at EUR 453 million based on the best estimate of expected future profits using a discount rate including an appropriate risk premium. This intangible asset will be amortized over the lifetime of the underlying treaties, in line with expected emergence of profits.
Other assets and liabilities have been recorded at their estimated fair value. Deferred tax has been recognized on the timing differences arising from the purchase price allocation. These balances represent payable and recoverable amounts which the Group expects to realize.
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 197 million, was recorded in the consolidated statement of income of the Group for the year ended 31 December 2013.
GENERALI U.S.: STATEMENT OF INCOME FROM ACQUISITION DATE TO 31 DECEMBER 2013 In EUR million (1) Gross written premiums 209 Change in unearned premiums - Gross earned premiums 209 Other income and expense - Investment income 4 Total income from ordinary activities 213 Gross benefits and claims paid (161) Gross commission on earned premiums (19) Net results of retrocession (15) Investment management expenses - Acquisition and administrative expenses (6) Other current operating expenses - Other current operating income - Total other current operating income and expense (201)
CURRENT OPERATING RESULT 12 Other operating expenses - Other operating income -
OPERATING RESULT 12 Financing expenses - Share in results of associates -
While assessing the investment income of the Generali U.S. portfolio as at 31 December 2013, SCOR’s quarterly yields assumptions were applied from acquisition date to year-end. As such, no pro forma adjustment has been made to reflect the pre-acquisition period of 2013. A pro forma adjustment of EUR (3) million was made to reduce investment income for the amount of interest on cash balances that were used to pay a portion of the purchase price to Generali.
CURRENT OPERATING RESULT 618 49 (3) 664 Other operating expenses (49) - - (49) Other operating income - - - -
The purchase price has been allocated based on an estimate of the fair value of assets acquired and liabilities assumed at the date of acquisition determined in accordance to IFRS 3 “Business Combinations”. The allocation relies on significant assumptions and the use of external expertise. The assets and liabilities acquired have been recorded at their fair values for purposes of the opening balance sheet and included in the consolidated accounts of SCOR using the Group's accounting principles in accordance with IFRS. The gain from bargain purchase arising from the acquisition of MRM S.A. was because MRM S.A.’s finances need to be restructured with the help of a third party investor. This is also supported by the fair value of the buildings acquired.
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 30 million, was recorded in the statement of income of the Group for the year ended 31 December 2013.
MRM S.A.’s share of investment income of EUR 2 million and result before tax of EUR 0 million included in SCOR’s consolidated 2013 results correspond to the results generated by MRM S.A. during the period from 29 May 2013, the acquisition date, up to the end of the reporting period.
If the business combination had taken place at the beginning of the year, investment income would have been EUR 519 million and the profit before tax for the Group would have been EUR 674 million.
The consideration paid by SCOR amounted to EUR 53 million which was contributed into MRM S.A. as an increase in share capital as at the acquisition date. The cash and cash equivalents of MRM S.A. amounted to EUR 4 million prior to the cash contribution by SCOR. Including the cash contribution by SCOR total cash and cash equivalents of MRM S.A. amounted to EUR 57 million.
Gross value at 31 December 2012 969 1,463 210 2,642 Foreign exchange rate movements - (53) (1) (54) Additions - - 28 28 Disposal - (8) (6) (14) Change in scope of consolidation - 453 - 453 Gross value at 31 December 2013 969 1,855 231 3,055 Foreign exchange rate movements - 141 5 146 Additions - - 30 30 Disposal - (9) (4) (13) Change in scope of consolidation - - (2) (2) Gross value at 31 December 2014 969 1,987 260 3,216 Cumulative amortization and impairment at 31 December 2012 (181) (432) (88) (701) Foreign exchange rate movements - 5 1 6 Amortization for the period - (35) (18) (53) Impairment for the period - - - - Shadow accounting - - - - Cumulative amortization and impairment at 31 December 2013 (181) (462) (105) (748) Foreign exchange rate movements - (17) (3) (20) Amortization for the period - (32) (7) (39) Impairment for the period - - (3) (3) Shadow accounting - (21) - (21) Cumulative amortization and impairment at 31 December 2014 (181) (532) (118) (831) Carrying value as at 31 December 2012 788 1,031 122 1,941 Carrying value as at 31 December 2013 788 1,393 126 2,307 Carrying value as at 31 December 2014 788 1,455 142 2,385
The IFRS 4 liability adequacy testing which includes VOBA recoverability, showed no indicators of impairment for the years ended 31 December 2014, 2013 or 2012.
Other intangible assets at 31 December 2014 were EUR 142 million compared with EUR 126 million at 31 December 2013.
Other intangible assets with finite useful lives at 31 December 2014 were EUR 111 million compared with EUR 96 million at 31 December 2013. During 2012, SCOR received indications that the business-venture agreement with the Medical Defense Union (MDU), acquired through the Converium business combination would be terminated and consequently management decided to impair the intangible to its recoverable value. At 31 December 2013, the remaining value of the intangible was EUR 0.2 million. At 31 December 2014, it is fully amortized.
The Group conducted its annual assessment of the amortization period and amortization method of these finite life intangible assets and has concluded that both the amortization period and existing amortization methodology are appropriate. The amortization charge associated with other intangible assets with finite lives was EUR (7) million, EUR (18) million, and EUR 9 million (1), for the years ended 31 December 2014, 2013, and 2012 respectively.
Other intangible assets also include indefinite life intangible assets associated with Lloyd’s syndicate participations acquired through the Converium business combination. The Lloyd’s intangibles of EUR 16 million as at 31 December 2014 and 31 December 2013 are deemed to have an indefinite life due to the ability to realize cash for these contractual rights through the Lloyd’s auction process. Other intangible assets having an indefinite useful life amounted to EUR 15 million as at 31 December 2014 compared with EUR 14 million as at 31 December 2013.
Tangible assets as at 31 December 2014 were EUR 542 million compared to EUR 544 million as at 31 December 2013. These primarily relate to buildings used by SCOR as offices, office furniture and equipment, and building fixtures and fittings.
Payments for operating leases relate primarily to rental payments for offices and business premises of the Group. They include extension options as well as restrictions regarding subleases. In the period under review, minimum lease payments of EUR 21 million (2013: EUR 18 million; 2012: EUR 29 million) were recognized as an expense, net of sublease payments of EUR (2) million (2013: EUR (3) million; 2012: EUR (6) million). The main lease contracts are for the US and Zurich offices. The minimum payments are as follows: 2014 2013 In EUR million Minimum payments Minimum payments Less than one year 21 16 From one to five years 54 66 More than five years 31 33 TOTAL MINIMUM PAYMENTS 106 115
Investments at fair value through income - designated as such for their initial recognition
Note 6 – (A) 450 369 Loans and receivables Note 7 (also Note 6 – (A)) 8,947 8,881 Derivative instruments (1) Note 8 (also Note 6 – (A)) 51 94
(1) Liabilities of EUR 78 million arising from derivative financial instruments are disclosed in the liability section of the consolidated balance sheet
 EUR 240 million (31 December 2013: EUR 82 million) are excluded from SCOR’s balance sheet (in accordance with the short cut method).
Analysis of insurance business investments and financial liabilities carried at fair value by valuation method: Investments and cash as at 31 December 2014
Cost or amortized cost In EUR million Level 3 Real estate investments 845 - - - 845 Equities 726 313 347 - 66 Fixed income 13,958 12,888 1,068 - 2 Available-for-sale financial assets 14,684 13,201 1,415 - 68 Equities 417 155 262 - - Fixed income 33 - 33 - -
Investments at fair value through income - designated as such for their initial recognition 450 155 295 - - Loans and receivables 8,947 93 - - 8,854 Derivative instruments Note 6 – (B) 51 - 32 19 - TOTAL INSURANCE BUSINESS INVESTMENTS 24,977 13,449 1,742 19 9,767 Cash and cash equivalents 860 860 - - - INVESTMENTS AND CASH AS AT 31 DECEMBER 2014 25,837 14,309 1,742 19 9,767 Percentage 100% 55% 7% - 38%
Real estate investments 861 - - - 861 Equities 734 342 318 - 74 Fixed income 11,333 10,322 1,009 - 2 Available-for-sale financial assets 12,067 10,664 1,327 - 76 Equities 322 107 215 - - Fixed income 47 3 44 - -
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. At each end of a reporting period, the Group considers the classification relevancy of financial instruments that are recognized at fair value. The valuation methodology of financial instruments is monitored to identify potential reclassifications.
Included within this category are financial investments that are measured by direct reference to published quotes within an active market. Financial instruments are included within this category if quoted prices or rates represent actual and regularly occurring transactions that are available from a stock exchange, dealer or broker. Such instruments comprise listed equities, mostly government, covered and agency bonds, as well as short-term investments.
During the financial year ended 31 December 2014, there were no net transfers out of the Level 3 fair value measurement category (2013: EUR 2 million).
(1) Movements in derivative instruments are due to the change in fair value of ATLAS VI and IX derivatives recorded in other operating expenses
(1) Movements in derivative instruments are mainly due to the change in fair value of ATLAS V, VI and IX derivatives recorded in other operating expenses (2) Acquisition of Atlas IX Mortality Risk Transfer Contract
(1) Movements in derivative instruments are mainly due to the change in fair value of ATLAS V and VI derivatives recorded in other operating expenses
The 2014 additions to real estate investments relate to renovation work on existing buildings (EUR 39 million) and the acquisition of land (EUR 21 million).
Fair value technique and unobservable inputs Fair value of real estate investments is categorized within Level 3. The fair value technique and unobservable inputs are as follows as at 31 December 2014 and 2013 respectively: Real estate
The table below presents the estimated maturity profiles of financial assets, which are expected to generate cash inflows to meet cash outflows on financial and contract liabilities: Less than one year One to five years Five to 10 years 10 to 20 years More than 20 years Total As at 31 December 2014 In EUR million 1,938 6,298 5,091 503 161 13,991 In percentage 14% 45% 36% 4% 1% 100% As at 31 December 2013 In EUR million 1,445 6,345 2,897 362 331 11,380 In percentage 13% 56% 25% 3% 3% 100%
The following table summarizes the fixed income securities and unrealized gains / (losses) by class of fixed income security: As at 31 December 2014 As at 31 December 2013
(1) During 2014 and 2013, SCOR has no investment exposure related to sovereign risk of Portugal, Ireland, Italy, Greece, Hungary or Spain (2) The balance includes EUR 33 million fixed income securities which are classified as fair value through income (as at 31 December 2013: EUR 47 million)
The change in the valuation of the available-for-sale portfolio affecting shareholders’ equity is as follows: In EUR million 2014 2013 2012 Net unrealized gains / (losses) net of tax 1 January 21 66 (178) Transferred to consolidated net income during the period, net of impairment (19) 18 47 Change in unrealized gains and losses (including investments purchased during the period)
159 (61) 169 Impact of foreign exchange 13 (2) 28 Net unrealized gains / (losses) net of tax 31 December 174 21 66
(1) Change in unrealized gains and losses is net of shadow accounting
(b) Unrealized gains / (losses) on investments included in other comprehensive income
Total impairment losses recognized in 2014 amounted to EUR 3 million (2013: EUR 74 million) exclusively on the equity portfolio (2013: EUR 72 million related to the equity portfolio and EUR 2 million to fixed-income securities).
(8) - - - (8) Unrealized gains and other (1) - - - - 64 Net unrealized gains / (losses) (8) - - - 56
As at 31 December 2013 Duration of decline in months Magnitude of decline - - - - - Total unrealized losses subject to an in-depth analysis
Due to their strategic nature these investments are not assessed under the same impairment rules .
In EUR million 2014 As at 31 December 2013 Funds held by ceding companies 8,108 8,016 Short-term investments 505 699 Loans secured against collateral 16 17 Infrastructure and Real estate loans 248 94 Other loans maturing in more than one year 45 53 Deposits 25 2 TOTAL 8,947 8,881
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. Shortterm investments include government bonds, certificates of deposit (CDs) and treasury bills (T-bills) maturing between three 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 “other loans maturing in more than one year”. Part of the assets presented within loans and receivables are managed by SCOR Global Investments (short-term government bonds, infrastructure and real estate loans, and most of loans secured against collateral).
In 2014, the increase of EUR 66 million mainly results from real estate and infrastructure loan activities, and from the impact of the foreign exchange on funds held by ceding companies. It is partially offset by sales of short-term investments.
Derivative financial instruments include the following items: Derivative assets Derivative liabilities Fair value through income
Subsequent to 31 December 2014, SCOR has sponsored a new catastrophe bond, Atlas IX Series 2015-1, which will provide the Group with multi-year risk transfer capacity of USD 150 million for US Named Storm and U.S. and Canada Earthquake events. This transaction replaces the US tranches of Atlas VI Series 2011-1, which matured on 8 January 2015. The risk period for Atlas IX 2015-1 runs from 11 February 2015 to 31 December 2018. The instrument will be accounted for as a derivative instrument.
ATLAS VI CATASTROPHE BONDS SPECIAL PURPOSE VEHICLE On 9 December 2009, SCOR completed the EUR 75 million Atlas VI transaction, replacing Atlas Reinsurance III. Atlas VI provided EUR 75 million of protection against European windstorms and Japanese earthquakes risks until 31 March 2013.
On 11 September 2013, SCOR entered into a Risk Transfer Contract (“RTC”) with Atlas IX Capital Limited (“Atlas IX”), providing the Group with protection against extreme mortality events in the US, such as pandemics, natural catastrophes and terrorist attacks. The RTC will provide USD 180 million of extreme mortality protection, for a risk period extending from 1 January 2013 to 31 December 2018.
The transaction is recorded as a derivative asset recognized at fair value through P&L and a liability for the value of interest payments. SCOR values the derivative asset using a model that is based on indicative secondary market interest spread, considering both the probability of trigger and alternative investment opportunities to the extent that trades in these instruments are active.
The average indicative secondary market interest spread is calculated based on third-party sources, which provide regular overviews on the current indicative secondary market. The average indicative secondary market interest spread used as at 31 December 2014 was 2.843% (31 December 2013: 3.095%).
SCOR has entered into interest rates swaps to cover its exposure to financial debt with variable interest rates relating to real estate investments. The fair value of these swaps is obtained from the banking counterparty and is based on market inputs. As part of the usual analysis of accounts processes these third party valuations are checked for reasonableness against internal models. The total notional amount relating to these swaps is EUR 286 million as at 31 December 2014 (2013: EUR 294 million). Net interest paid under these swaps amounted to EUR 13 million in 2014 (2013: EUR 11 million).
In order to hedge the foreign exchange risk associated with certain debts issued in CHF (CHF 650 million issued in 2011, CHF 315 million issued in 2012, CHF 250 million issued in 2013, see Note 14 – Financial Debt), SCOR entered into cross-currency swaps which exchange the principals and the coupons on the notes into EUR, and mature on 2 August 2016, 8 June 2018 and 30 November 2018 respectively.
SCOR purchases and sells forward currency contracts to reduce its overall exposure to balances held in currencies other than the functional currencies of its subsidiaries. The contracts are recorded at their net fair value from valuations
provided by banking counterparties using market inputs. The outstanding contracts at 31 December 2014 and 2013, converted into EUR at the closing rates, were as follows: Forward sales Forward purchases In EUR million Notional Fair value Notional Fair value 31 December 2014 2,136 (23) 1,525 (9) 31 December 2013 860 43 401 (21)
See Note 13 - Information on Share Capital, capital management, regulatory framework and shareholders’ equity, for the details on the issuance of warrants to UBS in the context of the contingent capital facility program.
Amounts are recorded in the balance sheet representing the instrument asset recognized at fair value through income and other liabilities representing the value of interest payments. In the absence of observable market inputs and parameters to reliably determine a fair value for this derivative instrument, the best measure of fair value is the expected cost of the instrument, corresponding to the total annual fees payable under the arrangement net of the warrants’ subscription amount received, amortized over the life of the instrument. These assets are disclosed as level 3 investments within insurance business investments (see Note 6 – Insurance Business Investments).
The changes in fair value through income as presented above are recognized in investment income.
In EUR million 2014 2013 Aggregate net book value (in SCOR) of individually immaterial associates 108 63
Table above is based on 2014, 2013 provisional financial information. The increase of the net book value mainly relates to the two private equity investments acquired in 2014.
P&C Total Gross receivables from ceding companies (69) 376 307 47 363 410 Provision for bad debts (3) (12) (15) (3) (10) (13) Estimated premiums receivable from cedents, net of commission 2,300 1,999 4,299 2,008 1,774 3,782 Assumed insurance and reinsurance accounts receivable 2,228 2,363 4,591 2,052 2,127 4,179 Amount due from reinsurers 114 79 193 47 55 102 Provision for bad debts - (1) (1) - - - Receivables from ceded reinsurance transactions 114 78 192 47 55 102 Assumed insurance and reinsurance accounts payable (315) (113) (428) (264) (146) (410) Liabilities for cash deposits from retrocessionaires (400) (300) (700) (388) (248) (636) Amount due to reinsurers (80) (35) (115) (59) (13) (72) Estimated premiums payable to retrocessionaires, net of commission (160) (193) (353) (137) (143) (280) Accounts payable on ceded reinsurance transactions (639) (529) (1,168) (584) (404) (988)
P&C Total Carrying value at 1 January 529 379 908 451 359 810 397 325 722 Capitalization of new contracts for the period / Change of the period 196 415 611 169 390 559 224 360 584 Change in scope of consolidation and contract portfolio exchanges - - - - - - - - - Amortization for the year (88) (379) (467) (87) (351) (438) (176) (329) (505) Impairment losses during the year - - - - - - - - - Foreign exchange rate movements 24 26 50 (21) (19) (40) 6 3 9
During the year the Group received and paid out operational cash relating to investment income and taxes. Dividend and interest cash receipts relating to investments held during the year were EUR 14 million (2013: EUR 27 million and 2012: EUR 34 million) and EUR 360 million (2013: EUR 309 million and 2012: EUR 354 million).
The authorized share capital of the Company at 31 December 2014 was 192,691,479 shares with a nominal value of EUR 7.8769723 each compared with authorized share capital of 192,757,911 shares with a nominal value of EUR 7.8769723 at the end of 2013 and with authorized share capital of 192,384,219 shares with a nominal value of EUR 7.8769723 at the end of 2012.
 All other movements presented above relate to the issuance of shares on the exercise of stock options for EUR 9 million (EUR 4 million in share capital and EUR 5 million in additional paid-in capital). This resulted in the creation of 579,166 new shares throughout the year.
 All other movements presented above relate to the issuance of shares on the exercise of stock options for EUR 20 million (EUR 10 million in share capital and EUR 10 million in additional paid-in capital). This resulted in the creation of 1,254,162 new shares throughout the year.
In 2014, the movements are due to the following operations:  The Board of Directors held on 4 March 2014 decided to reduce the Group capital by cancellation of 777,454 treasury shares for EUR (13) million (EUR (6) million in share capital and EUR (7) million in additional paid-in capital).
 All other movements presented above relate to the issuance of shares on the exercise of stock options for EUR 12 million (EUR 6 million in share capital and EUR 6 million in additional paid-in capital). This resulted in the creation of 711,022 new shares throughout the year.
The number of shares held as treasury shares by the Company or its subsidiaries at 31 December 2014 amounted to 6,593,132 shares compared to 7,343,237 shares at the end of 2013. These treasury shares are not entitled to dividends.
On 20 December 2013, SCOR has arranged a new EUR 200 million contingent capital facility line with UBS and issued 12,695,233 warrants in favor of UBS. This contingent capital facility which is effective since 1 January 2014, replaced the previous contingent capital arrangement which ended on 31 December 2013. Under the new arrangement, the protection is triggered in case of extreme life events, as well as natural catastrophe events included within the last facilities. Each warrant commits UBS to subscribe to two new SCOR shares (maximum amount of EUR 200 million available per tranche of EUR 100 million each, including issuance premium) when the aggregated amount of (i) the estimated ultimate net losses resulting from eligible natural catastrophes incurred by the Group (in its capacity as an insurer/reinsurer) or (ii) the ultimate net claims amount recorded by SCOR group life segment (in its capacity as an insurer/reinsurer) reaches certain contractual thresholds between 1 January 2014 and 31 December 2016. In addition, subject to no drawdown having already been conducted under the facility, if the price of the SCOR shares falls below EUR 10 an individual tranche of EUR 100 million will be drawn down out of the EUR 200 million facility. UBS is committed to subscribing to the new shares but does not intend to become a long-term shareholder of SCOR and will resell the shares by way of private placements and/or sales on the open market. In this respect SCOR and UBS have entered into a profit sharing arrangement whereby 50% of the gain, if any, will be retroceded to SCOR. If the resale of the new shares occurs immediately upon exercise through an off-market transaction, the profit share ratio owed to SCOR will be paid in the form of SCOR shares in order to limit the dilutive impact of the transaction for SCOR’s shareholders.
The Group’s capital management policy is to optimize the utilization of its capital and debt structure in order to maximize the short-term and long-term profitability to shareholders while at the same time providing its customers with an adequate level of security as measured by internal capital allocation models, rating agencies and national regulators.
The Groups’ capital management objectives are:  To match the profile of its assets and liabilities, taking into account the risks inherent to the business;  To maintain strong credit ratings and healthy capital ratios in order to support its business objectives and maximize shareholder value;  To retain financial flexibility by maintaining strong liquidity and access to a range of capital markets;  To allocate capital efficiently and support the development of business by ensuring returns on capital employed meet the requirements of the regulators and stakeholders; and
The Group seeks to optimize the structure and sources of capital to ensure that it consistently maximizes returns to the shareholders. The objective of the Group’s overall capital management process is the setting of target risk adjusted rates of return for divisions, which are aligned to performance objectives and to promote the creation of value to shareholders.
In this regard, and in line with the Group’s new strategic plan “Optimal Dynamics” which is in effect from mid-2013 to mid-2016, the Group aims to achieve the following two specific targets:  A ROE of 1 000 basis point above the three-month risk-free rate over the cycle;  A solvency ratio (1) in the 185-220% range (percentage of SCR, according to the Group Internal Model). SCOR believes that its working capital is sufficient to meet the requirements of its consolidated companies. The Group reconciles its strategic objectives with the protection of its capital via its “capital shield” policy, which articulates the Group’s risk appetite. This policy is based on an economic approach and aims to protect the Group against potential shock losses, some of which are not immediately recognized from a pure accounting view. The policy builds on the following two concepts: (a) Active hedging of peak exposures through retrocession
It should be noted that regulatory filings in the majority of countries in which the Group operates are not prepared on an IFRS basis. The statutory basis of accounting in various countries is very often different from IFRS giving rise to potential differences between IFRS capital and statutory capital.
SCOR’s Combined General Meeting of 6 May 2014 resolved to distribute, for the 2013 fiscal year, a dividend of one euro and thirty cents (EUR 1.30) per share, being an aggregate amount of dividend paid of EUR 243 million, calculated on the basis of the number of shares eligible for dividend as at the payment date. The ex-dividend date was 12 May 2014 and the dividend was paid on 15 May 2014. The resolution to be presented to the Annual General Meeting to approve, during the first half of 2015, the accounts for the financial year 2014, sets out the distribution of a dividend of EUR 1.40 per share for the financial year 2014.
The following table sets out an overview of the debt issued by the Group: In EUR million
SCOR’s subordinated debt is classified as liabilities because under the terms and conditions of the issuance contracts, SCOR does not have an unconditional right to avoid delivering cash to settle the contractual obligations and based on projected cash flow there is no equity component of the instruments.
A 30-year subordinated note totaling USD 100 million was issued on 7 June 1999. These notes are redeemable by SCOR quarterly as from the tenth year following their issue date. These floating-rate bonds bear interest indexed on the 3-month Libor rate plus (i) 0.80% for the first ten years and (ii) 1.80% thereafter. The Group decided not to redeem the USD 100 million of subordinated floating rate notes due 2029 at their first call date in June 2009.
During 2011, the Group re-purchased USD 33 million out of this debt, at a price of 82.5%. The purchase price of this debt at a discount rate gave rise to a consolidated pre-tax profit of EUR 4 million. During 2013, the Group re-purchased USD 43 million and USD 3 million of this debt at a price of 89.75% and 85% respectively. These debt repurchases gave rise to a consolidated pre-tax profit of EUR 4 million
During 2009, the Group provided liquidity to both its perpetual super-subordinated debt security (Tier 1 type) (TSSDI EUR 350 million) and its EUR 100 million subordinated debt issuance (call date July 2010) resulting in acquisition of own
debt of EUR 99 million at an average price of 46.5%. The purchase of this debt at a discount gave rise to a consolidated pre-tax profit of EUR 53.4.
Covenants applicable to the aforementioned notes: The following clauses, which are binding on the issuer, allow for anticipated reimbursement:  A change in legislation or tax law which would deprive the bondholders of all or part of the interest payments stipulated in the initial operating note.
On 11 May 2011, SCOR reopened its existing CHF perpetual subordinated notes placement by issuing an additional amount of CHF 225 million. The placement was increased to CHF 250 million at the settlement date of 3 June 2011, given the market appetite. The notes are fungible to those issued on 2 February 2011. The conditions and the accounting treatment are similar to the first placement. SCOR has entered into a cross-currency swap which exchanges the principal into EUR and exchanges the CHF coupon on the notes to EUR 6.925% and matures on 2 August 2016. Refer to Note 8 – Derivative Instruments.
SCOR has entered into a cross-currency swap which exchanges CHF 250 million of the principal into EUR and exchanges the CHF coupon on the notes to EUR 6.2855% and matures on 8 June 2018. SCOR has entered into a second cross-currency swap which exchanges CHF 65 million of the principal into EUR and exchanges the CHF coupon on the notes to EUR 6.2350% and matures on 8 June 2018. Refer to Note 8 – Derivative Instruments.
Real estate financing relates to the acquisition of investment properties through property-related bank loans of EUR 469 million (EUR 497 million as at 31 December 2013). The main property related bank loan amounts to EUR 165 million and is used to finance the Group’s head-office in Paris, at Kléber. It bears interest indexed to the 3-month Euribor rate plus 1.35% and is redeemable in June 2018. SCOR entered into three interest rate swaps which cover its exposure to the variable interest rate whereas SCOR pays fixed 2.97% and receives three-months Euribor. The interest rate swaps have been accounted for as cash flow hedges (for further detail refer to Note 8 – Derivative instruments). The other property-related bank loans bear interests indexed to the 3 - month Euribor and redeemable between 2016 and 2021. They are used to finance other buildings owned by the Group. Certain real estate financing contracts contain accelerated repayment clauses and other debt covenants. Such covenants define certain ratios to comply with, among which loan to value ratios (LTV), defined as the relation between the carrying amount of the financing and the market value of the real estate being financed, interest coverage rates (ICR), representing the percentage at which interest charges are covered by rental income, and debt service coverage ratios (DSCR), representing the percentage at which debt amortization and interest expense are covered by rental income. Under existing financing contracts LTV ratios vary between 60% and 90% and ICR / DSCR between 120% and 200%.
As at 31 December 2014, the Group is in compliance with the LTV and ICR / DSCR covenants, except for one credit line for which the LTV threshold was exceeded (62% instead of 60%). On 20 January 2015, a payment of EUR 1.5 million was made to restore full compliance with this covenant.
On 1 October 2013, SCOR entered into a short-term financing agreement with a principal amount of USD 228 million maturing 14 July 2014 to partly finance the acquisition of Generali U.S. This short-term financing was early repaid during the first quarter of 2014. Other financial debt relates mainly to deposits and guarantees.
At 31 December 2014, the other reserves comprise EUR 132 million additional reserves covering pre-existing creditors and other liabilities related to the Generali U.S. acquisition in 2013 (2013: EUR 135 million. At 31 December 2014, the other reserves include provisions related to litigation of EUR 16 million (2013: EUR 12 million).
P&C Total Gross contract liabilities Gross claim reserves 4,428 11,088 15,516 3,936 10,691 14,627 Mathematical reserves 8,165 - 8,165 7,834 - 7,834 Unearned premium reserves 101 1,938 2,039 80 1,663 1,743 Total gross insurance contract liabilities 12,694 13,026 25,720 11,850 12,354 24,204 Reserves for financial contracts - 119 119 - 133 133 Total gross contract liabilities 12,694 13,145 25,839 11,850 12,487 24,337 Reinsurance recoverable Ceded claims reserves & claims expense reserves (380) (619) (999) (304) (629) (933) Ceded mathematical reserves (52) - (52) (106) - (106) Ceded unearned premium reserves (2) (142) (144) - (101) (101) Ceded contract liabilities (434) (761) (1,195) (410) (730) (1,140) Net contract liabilities 12,260 12,384 24,644 11,440 11,757 23,197
The table begins by showing the reported year-end gross and net reserves, including IBNR, recorded at the balance sheet date at the exchange rates applicable at each balance sheet date.
In EUR million 2004 2005 2006 2007 (1) 2008 (1) 2009 (1) 2010 (1) 2011 (1) 2012 (1) 2013 (1) 2014 (1) Gross claims reserves & estimates – end of year (2) 6,135 6,310 5,791 9,325 9,127 9,156 9,696 10,602 10,857 10,691 11,088 Ceded claims reserves & estimates – end of year (2) 533 554 490 598 467 473 412 765 690 629 619 Net claims reserves & estimates – end of year (2) 5,602 5,756 5,301 8,727 8,660 8,683 9,284 9,837 10,167 10,062 10,469 Net paid losses (3) (4) 1 year later 896 1,000 1,026 1,766 1,992 2,069 2,080 2,407 2,369 2,530 - 2 years later 1,569 1,657 1,626 2,931 3,263 3,239 3,576 3,858 3,899 - - 3 years later 2,075 2,092 2,155 3,870 4,107 4,107 4,637 4,925 - - - 4 years later 2,455 2,351 2,805 4,414 4,649 4,682 5,294 - - - - 5 years later 2,640 2,917 3,205 4,841 5,112 5,156 - - - - - 6 years later 3,151 3,265 3,501 5,226 5,518 - - - - - - 7 years later 3,467 3,520 3,779 5,567 - - - - - - - 8 years later 3,687 3,755 4,042 - - - - - - - - 9 years later 3,900 3,994 - - - - - - - - - 10 years later 4,116 - - - - - - - - - - Net incurred losses (3) 1 year later 5,917 5,987 5,701 9,480 9,491 9,622 10,584 10,809 11,094 10,953 - 2 years later 5,989 6,262 5,765 9,482 9,490 9,385 10,412 10,647 10,937 - - 3 years later 6,243 6,312 5,784 9,381 9,248 9,098 10,132 10,471 - - - 4 years later 6,306 6,305 5,630 9,172 9,028 8,828 10,049 - - - - 5 years later 6,302 6,184 5,427 8,980 8,801 8,758 - - - - - 6 years later 6,200 6,022 5,229 8,762 8,750 - - - - - - 7 years later 6,062 5,875 5,021 8,719 - - - - - - - 8 years later 5,949 5,683 4,995 - - - - - - - - 9 years later 5,783 5,659 - - - - - - - - - 10 years later 5,754 - - - - - - - - - - Cumulative redundancy / (deficiency) (152) 97 306 8 (90) (75) (765) (634) (770) (891) - Gross cumulative inception to date incurred losses as at 31 December 2014 (2) 6,528 6,352 5,416 9,404 9,316 9,207 10,498 11,364 11,717 11,634 - Ceded cumulative inception to date incurred losses as at 31 December 2014 (2) 774 693 422 684 566 449 448 893 780 681 - Net cumulative inception to date incurred losses as at 31 December 2014 (2) 5,754 5,659 4,995 8,719 8,750 8,758 10,049 10,471 10,937 10,953 - Unearned premium reserve (UPR) Gross UPR – end of year 978 637 575 1,108 1,099 1,135 1,384 1,516 1,683 1,663 1,938 Ceded UPR – end of year 40 24 18 39 40 40 51 84 93 101 142 Net UPR – end of year 938 613 557 1,069 1,059 1,095 1,333 1,432 1,590 1,562 1,796 Deferred acquisition costs (DAC) Gross DAC – end of year 132 137 108 230 227 238 278 325 359 379 441 Ceded DAC – end of year 3 2 - 2 1 - 1 5 7 8 10 Net DAC – end of year 129 135 108 228 226 238 277 320 352 371 431
(1) Does not include claims which result in no ultimate cost and claims notified only for precautionary reasons for which the amount is not evaluated
Business of this type is not within the scope of the SCOR Global Life underwriting policy, and no GMDB new business is being underwritten. These treaties are all in run-off and, as at 31 December 2014, cover in total approximately 0.5 million policies.
There are some risks which are specific to the GMDB portfolio such as developments on the financial markets, fluctuations in interest rates and the implied volatility on equity options. The liability is also dependent on policyholder behavior.
As a retrocessionaire, SCOR Global Life is exposed to uncertainties concerning data received from its retrocedents 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.
An analysis of the share of retrocessionaires in the Group’s contract liabilities by rating of the retrocessionaires and collateral from retrocessionaires in favor of SCOR at 31 December 2014 and 2013 is as follows: In EUR million
The amounts paid under defined contribution plans were EUR 20 million, EUR 19 million, and EUR 17 million for the years ended 31 December 2014, 2013, and 2012 respectively.
An employer’s obligation under a defined benefit plan is to provide the agreed amount of benefits to current and future beneficiaries. If the defined benefit plan is not wholly funded, provisions are recognized.
The discounted obligation is calculated based on the projected unit credit method by taking into consideration actuarial assumptions, salary increase, retirement age, mortality, turnover and discount rates. Assumptions defined are based on the macroeconomic environment of each country in which the Group operates.
Modifications to actuarial assumptions or differences between these assumptions and actual amounts give rise to actuarial differences which are recorded in other comprehensive income during the period in which they occur, in accordance with Group accounting principles.
The main defined benefit pension plans and other long-term benefits relate mainly to Switzerland, North America, France and Germany. These locations represent 36%, 28%, 18% and 13% respectively, as at 31 December 2014, (38%, 27%, 17% and 13%, respectively, as at 31 December 2013), of the Group’s obligation under defined benefit plans.
US Canada Switzerland UK Euro zone Assumptions as at 31 December 2014 Discount rate 4.21% 3.80% 1.35% 4.00% 2.06% Salary increase - - 1.70% 3.40% 2.50% Assumptions as at 31 December 2013 Discount rate SCOR plans: 5.07%
The average duration of plans by geographic area is disclosed in the table below: Europe Switzerland US UK Canada Global Duration as at 31 December 2014 11 years 18 years 13 years 30 years 9 years 15 years Duration as at 31 December 2013 11 years 17 years 14 years 31 years 9 years 15 years
Service cost, net of plan amendments (3) 1 (1) (3) 10 4 6 - 9 4 5 - Interest cost on obligation 10 3 3 4 7 3 2 2 7 3 2 2 Interest income on plan assets (7) (1) (3) (3) (4) - (2) (2) (4) (1) (2) (1) Amortization of actuarial gains and losses through profit and loss for other long-term benefits 1 1 - - 1 1 - - 2 2 - - Administration expenses recognized in pension expense - - - - 1 - - 1 - - - - Settlement - - - - - - - - - - - - Total pension cost 1 4 (1) (2) 15 8 6 1 14 8 5 1
The actual returns on plan assets were EUR 13 million for the year ended 31 December 2014 (2013: EUR 10 million and 2012: EUR 12 million).
In EUR million 2014 2013 2012 Defined benefit obligation 358 296 254 Plan assets 209 179 145 Deficit 149 117 109 Asset ceiling limitation - 1 4
The following schedule reconciles the movements in the balance sheet amounts for the year ended 31 December 2014, 2013 and 2012: In EUR million Total
Obligation as at 1 January 296 102 115 79 254 92 111 51 216 73 101 42 Service cost 11 5 5 1 10 4 6 - 9 4 5 - Interest cost on obligation 10 3 3 4 7 3 2 2 7 3 2 2 Employee contributions 3 - 3 - 3 - 3 - 3 - 3 - Plan amendment (14) (4) (6) (4) - - - - 1 - - 1 Acquisition / divestiture (2) - - - - 34 - - 34 - - - - Benefit payments (10) (2) (4) (4) (8) (3) (3) (2) (7) - (5) (2) Actuarial (gains) / losses due to change in
Experience (gains) / losses 1 1 - - 3 2 - 1 4 4 - - Effect of foreign exchange 11 3 1 7 (4) - (1) (3) 2 - 2 - Obligation as at 31 December 358 128 130 100 296 102 115 79 254 92 111 51 Reconciliation of fair value of plan assets
Fair value of assets as at 1 January 179 25 97 57 145 23 89 33 125 16 78 31 Interest income on plan assets 7 1 3 3 4 - 2 2 4 1 2 1 Employer contributions 15 3 5 7 9 3 5 1 11 5 5 1 Employee contributions 3 - 3 - 3 - 3 - 3 - 3 - Acquisition / divestiture (2) - - - - 24 - - 24 - - - - Benefit payments (10) (2) (4) (4) (8) (3) (3) (2) (7) - (5) (2) Asset gains / (losses) due to experience - - - - (1) - - (1) - - - - Effect of foreign exchange 8 1 2 5 (3) 1 (1) (3) 2 - 1 1 Fair value of assets as at 31 December 209 27 111 71 179 25 97 57 145 23 89 33 Net defined benefit obligation as at 31 December - Deficit
Fair value of plan assets as at 31 December 209 27 111 71 179 25 97 57 145 23 89 33 Funded status as at 31 December - deficit 94 57 13 24 68 37 14 17 64 30 19 15 Unfunded obligation as at 31 December 55 44 6 5 49 40 4 5 45 39 3 3 Total funded status as at 31 December – deficit
(2) In 2013, acquisition / divestiture includes pension plans from the acquisition of Generali U.S.
The following table summarizes the movements in accrued (prepaid) balances recorded in the consolidated balance sheets as at 31 December 2014, 2013 and 2012: In EUR million
The following table includes the allocation of plan assets as at 31 December 2014 and 2013: Total in EUR million Europe Switzerland North America 2014 Equities 82 41% 25% 61% Government Bonds 3 11% - - Corporate Bonds 88 - 58% 33% Property 18 - 16% - Insurance Contracts 13 48% - - Other 5 - 1% 6% TOTAL 209 100% 100% 100% 2013 Equities 66 39% 25% 55% Government Bonds 7 10% - 9% Corporate Bonds 72 1% 56% 31% Property 16 - 17% - Insurance Contracts 13 50% - - Other 5 - 2% 5% TOTAL 179 100% 100% 100%
2014 Equities 82 11 28 43 Government Bonds 3 3 - - Corporate Bonds 88 - 64 24 Property 18 - 18 - Insurance Contracts 13 13 - - Other 5 - 1 4 TOTAL 209 27 111 71 2013 Equities 66 10 24 32 Government Bonds 7 2 - 5 Corporate Bonds 72 - 55 17 Property 16 - 16 - Insurance Contracts 13 13 - - Other 5 - 2 3 TOTAL 179 25 97 57
The terms and conditions of the stock options plans of 20 March 2014 and 1 December 2014, which are similar to those previously granted by SCOR (notably with regards to the presence condition), provide that the options allocated to Partners can be exercised at the earliest four years after the grant date, if the presence condition is met in addition to the satisfaction of certain performance conditions.
The exercise of all of the stock options allocated in 2014 is subject to performance conditions which are based on the strict observance of the principles set forth in the SCOR Code of Professional Conduct and on the solvability ratio, SCOR Global P&C’s combined ratio, SCOR Global Life’s technical margin and the SCOR group’s ROE in 2014 and 2015.
The average weighted remaining life of the options for 2014 and 2013 was 5.52 and 5.98 years respectively. The fair value of options is estimated by using the Black & Scholes method which takes into account the terms and conditions under which the options were granted. The following table lists the characteristics used at the end of 2014, 2013 and 2012: Fair value at grant date (EUR) 1.40 1.80 2.00 2.15 2.28 3.10 Exercise price (EUR) 24.41 25.06 25.82 24.65 22.25 20.17 Expected life 4 years 4 years 4 years 4 years 4 years 4 years Historical volatility 18.34% 21.29% 21.86% 20.30% 22.23% 29.11% Dividend 5.03% 5.03% 5.03% 5.03% 5.03% 5.58% Risk-free interest rate 0.292% 1.004% 1.006% 1.155% 0.870% 1.924%
The Group also awards free shares to its employees under the following terms: Date of grant Date of vesting Number of shares originally granted Estimated price on grant date 22 September 2004 10 January 2005 1,962,555 EUR 1.20 7 December 2004 10 January 2005 2,434,453 EUR 1.41 7 December 2004 10 November 2005 2,418,404 EUR 1.41 7 November 2005 1 September 2007 8,471,998 EUR 1.584 4 July 2006 5 July 2008 8,030,000 EUR 1.638 7 November 2006 8 November 2008 666,000 EUR 1.988 21 November 2006 22 November 2008 2,760,000 EUR 2.108 24 May 2007 24 May 2009 1,442,000 EUR 20.85 7 May 2008 8 May 2010 195,000 EUR 15.63 7 May 2008 8 May 2012 84,000 EUR 15.63 26 August 2008 27 August 2010 427,500 EUR 15.16 26 August 2008 27 August 2012 771,500 EUR 15.16 3 March 2009 4 March 2011 65,800 EUR 15.155 3 March 2009 4 March 2013 149,600 EUR 15.155 16 March 2009 17 March 2011 593,500 EUR 15.085 16 March 2009 17 March 2013 694,000 EUR 15.085 15 April 2009 16 April 2011 30,500 EUR 16.29 15 April 2009 16 April 2013 85,500 EUR 16.29 25 November 2009 26 November 2011 72,000 EUR 16.66 25 November 2009 26 November 2013 16,500 EUR 16.66 2 March 2010 3 March 2012 746,430 EUR 18.25 2 March 2010 3 March 2014 862,130 EUR 18.25 12 October 2010 13 October 2012 26,500 EUR 17.91 12 October 2010 13 October 2014 18,410 EUR 17.91 17 December 2010 18 December 2014 6,120 EUR 19.00 7 March 2011 8 March 2013 663,480 EUR 21.06 7 March 2011 8 March 2015 687,060 EUR 21.06 1 September 2011 2 September 2013 15,800 EUR 16.68 1 September 2011 2 September 2015 320,850 EUR 16.68 1 September 2011 (LTIP) 2 September 2017 415,500 EUR 16.68 1 September 2011 (LTIP) 2 September 2019 297,500 EUR 16.68 12 December 2011 13 December 2013 51,340 EUR 17.44 12 December 2011 13 December 2015 108,480 EUR 17.44 19 March 2012 20 March 2014 464,600 EUR 20.49 19 March 2012 20 March 2016 1,226,340 EUR 20.49 3 May 2012 4 May 2014 125,000 EUR 19.815 26 July 2012 27 July 2014 3,180 EUR 19.265 26 July 2012 (LTIP) 27 July 2018 57,500 EUR 19.265 26 July 2012 (LTIP) 27 July 2020 51,000 EUR 19.265 30 October 2012 31 October 2014 74,400 EUR 20.33 30 October 2012 31 October 2016 24,000 EUR 20.33 05 March 2013 06 March 2015 528,800 EUR 22.215 05 March 2013 06 March 2017 878,450 EUR 22.215 05 March 2013 (LTIP) 06 March 2019 85,500 EUR 22.215 05 March 2013 (LTIP) 06 March 2021 232,500 EUR 22.215 02 October 2013 03 October 2017 304,300 EUR 24.66 05 November 2013 05 November 2015 61,200 EUR 25.635 05 November 2013 05 November 2017 13,500 EUR 25.635 18 December 2013 18 December 2016 9,500 EUR 25.135 18 December 2013 18 December 2018 28,000 EUR 25.135 4 March 2014 5 March 2016 641,335 EUR 24.70 4 March 2014 5 March 2018 1,263,695 EUR 24.70 4 March 2014 (LTIP) 5 March 2020 31,500 EUR 24.70 4 March 2014 (LTIP) 5 March 2022 88,500 EUR 24.70
The terms and conditions of the performance share plans of 4 March 2014 (except Long Term Incentive Plan - LTIP) and 5 November 2014, similar to those usually granted by SCOR (notably with regards to the presence conditions for the first two years) provide that after the vesting period of two years for beneficiaries tax resident 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 beneficiaries not tax resident in France, the final acquisition of these shares will be subject to the condition of presence of two years and to the satisfaction of performance conditions.
The terms and conditions of the performance share LTIP plan of 4 March 2014, provide that after the vesting period of six years for beneficiaries tax resident 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 beneficiaries not tax resident in France, the final acquisition of these shares will be subject to the condition of presence of six years for each beneficiary and to the satisfaction of performance conditions. The collective free shares plan of 30 July 2014 is neither subject to performance conditions nor subject to presence conditions. The final acquisition of these shares is effective, with no condition, two years after grant date.
The terms and conditions of the performance share plan of 1 December 2014, provide that after the vesting period of three years for beneficiaries tax resident in France (and an obligation to retain shares for a period of two years after the end of the vesting period) and of five years for beneficiaries not tax resident in France, the final acquisition of these shares will be subject to the condition of presence of three years and to the satisfaction of performance conditions.
French residents 20.12 20.67 20.47 20.85 9.94 Non-French residents 18.05 18.56 20.47 18.71 8.25
Vesting period French residents 3 years 2 years 2 years 2 years 6 years Non-French residents 5 years 4 years 2 years 4 years 8 years
Dividend 5.03% 5.03% 5.03% 5.03% 5.03% Risk-free interest rate 0.292% 0.189% 0.332% 0.655% 1.22%
French residents 20.05 21.64 - 18.75 9.08 Non-French residents 17.98 19.42 18.68 16.83 7.51
Vesting period French residents 3 years 2 years - 2 years 6 years
French residents 16.96 16.07 7.49 16.51 17.06 Non-French residents 15.04 - 6.09 - 15.13
Vesting period French residents 2 years 2 years 6 years 2 years 2 years
INCOME TAX EXPENSE The main components of income taxes for the years ended 31 December 2014, 2013 and 2012 are presented below: In EUR million 2014 2013 2012 Amounts reported in the consolidated statements of income Current tax - current year (164) (124) (152) Current tax - prior years (6) (17) 14 Deferred taxes due to temporary differences (15) 52 44 Deferred taxes from tax losses carried-forward 20 (5) (16) Changes in deferred taxes due to changes in tax rates or tax law (1) 3 2 INCOME TAX (EXPENSE) / BENEFIT REPORTED IN STATEMENT OF INCOME (166) (91) (108)
A reconciliation of the income tax expense, obtained by applying the French tax rate of 38.00% for 2014 and 2013 and 36.10% for 2012 to income before income taxes to the actual income tax expense recorded in the statement of income is presented in the table below. The effective tax rate in 2014 is 24.5% (2013: 14.2% and 2012: 20.4%).
In EUR million 2014 2013 2012 Income before income tax 675 640 526 Theoretical income tax at 38.00% (for 2014 and 2013) and 36.10% (for 2012) (257) (243) (190) Reconciling items to actual income tax (expense) / benefit Differences between French and local tax rates 106 120 91 Tax-exempt income 26 88 4 Non-deductible expenses (28) (38) (15) Write-down and reversal of previous write-down of deferred tax assets (1) - (3) Change in tax risk provision (17) (2) (1) Non creditable / refundable withholding tax (1) - (3) Change in tax rates (1) 3 2 Share based payments 2 (1) (8) Income taxes prior years 1 (13) 16 Others 4 (5) (1) ACTUAL TAX (EXPENSE) / BENEFIT (166) (91) (108)
The standard tax rates for the primary locations in which the Group has operations are as follows: 2014 2013 2012 France 38.00% 38.00% 36.10% Switzerland 21.15% 21.15% 21.17% Germany 32.45% 32.45% 32.45% Ireland 12.50% 12.50% 12.50% United Kingdom 21.50% 23.25% 24.50% United States 35.00% 35.00% 35.00% Singapore 17.00% 17.00% 17.00%
benefit Net of tax amount Remeasurements of postemployment benefits (43) 7 (36) 9 (3) 6 (16) 8 (8) Items that will not be reclassified subsequently to profit or loss (43) 7 (36) 9 (3) 6 (16) 8 (8) Effect of changes in foreign exchange rates 361 7 368 (163) (2) (165) (20) 8 (12) Revaluation of assets available for sale 236 (56) 180 (89) 24 (65) 331 (98) 233 Shadow accounting (36) 9 (27) 29 (9) 20 8 3 11 Net gains / losses on cash flow hedge (8) 2 (6) 8 (1) 7 (25) 6 (19) Other changes 3 - 3 (19) - (19) 2 - 2 Items that will be reclassified subsequently to profit or loss 556 (38) 518 (234) 12 (222) 296 (81) 215 TOTAL 513 (31) 482 (225) 9 (216) 280 (73) 207
DEFERRED TAX Deferred tax assets and liabilities and the related expense or benefit as at and for the years ended 31 December 2014, 2013 and 2012 were generated by the following items: Balance sheet as at 31 December Deferred taxes benefits (expense) for the period
The operating losses which have not been recognized as deferred tax assets relate primarily to the French tax Group.
In EUR million 2014 2013 2012 Real estate investments 35 60 59 Available for sale investments 446 213 452 Investments at fair value through income 7 18 13 Loans and receivables 192 178 193 Derivative instruments (28) 13 (4) Other (including cash and cash equivalents), net of other investment expenses (15) 35 (90) TOTAL 637 517 623
The table below shows the net results of retrocession for the years ended 31 December 2014, 2013 and 2012: In EUR million
Other operating and administrative expenses include expenses incurred by the Group, excluding gross commissions, as follows: In EUR million 2014 2013 2012 Staff costs 390 372 329 Taxes other than income taxes 9 16 18 Other costs 251 211 241 OTHER OPERATING AND ADMINISTRATIVE EXPENSES (1)
Group audit fees for services rendered as per year are detailed below: In EUR thousands
Audit (1) 4,816 4,193 82% 93% 3,186 3,314 92% 95% 8,002 7,507 85% 94% SCOR SE 823 986 14% 22% 828 991 24% 28% 1,651 1,977 17% 25% Fully consolidated subsidiaries
SCOR SE 246 138 4% 3% 188 80 6% 2% 434 218 5% 3% Fully consolidated subsidiaries 669 130 11% 3% 73 99 2% 3% 742 229 8% 2% Other (3) 191 69 3% 1% 11 5 - - 202 74 2% 1% Legal tax social security
Net income - Group share 512 - - 549 - - 418 - - Basic earnings per share Net income attributable to ordinary shareholders 512 186,070 2.75 549 185,041 2.96 418 183,841 2.28 Diluted earnings per share Dilutive effects - - - - - - - - - Stock options and share-based compensation - 2,496 - - 3,270 - - 3,070 - Net income attributable to ordinary shareholders and estimated conversions
Key management personnel are those individuals having responsibility and authority for planning directing and controlling the activities of the Group. The Group considers that the members of the Executive Committee and the Board constitute key management personnel for the purposes of IAS 24. The total gross compensation of key management personnel, which include short-term employee benefits, postemployment benefits, other long-term benefits, termination benefits and share-based payments, for the years ended December 31 2014, 2013, and 2012 is outlined below.
The total commitment of the Group for defined benefit retirement plans for the eligible members of the Executive Committee in France, Germany and Switzerland amounts to EUR 47 million(1) as at 31 December 2014 (EUR 38 million as at 31 December 2013 and EUR 33 million as at 31 December 2012).
In the case of departure of the Chairman and Chief Executive Officer during the current financial year:  all the variable part of his compensation for prior year will be payable during current year as soon as the
(A) SCOR financial strength by S&P rating must be maintained (minimum) “A” on average over the two prior years; (B) SCOR Global P&C’s net combined ratio must be less than or equal to 102% on average over the two prior years; (1) This amount takes into account changes in the pension tax rate (from 30 to 45% for French beneficiaries) when pension annuities are above 8 annual social security ceilings.
(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
Rendering of technical support in relation to risk management information technology and reinsurance services: services are charged for annually on an arms’ length basis.
 In Asia: SCOR Reinsurance Asia/Pacific Pte Ltd.; SCOR Reinsurance Company (Asia) Ltd.
2014 Percentage 2013 Percentage Consolidation method Country Control Interest Control Interest
SCOR SE and its direct subsidiaries SCOR SE France 100 100 100 100 Parent General Security Indemnity Company of Arizona US 100 100 100 100 Full General Security National Insurance Company US 100 100 100 100 Full SCOR Africa Ltd. South Africa 100 100 100 100 Full SCOR Global Investments SE France 100 100 100 100 Full SCOR Perestrakhovaniye Russia 100 100 100 100 Full SCOR Reinsurance Company US 100 100 100 100 Full SCOR U.S. Corporation US 100 100 100 100 Full SCOR Brasil Participações Ltda. Brazil 100 100 - - Full SCOR Global LIFE SE and its subsidiaries SCOR Global Life SE France 100 100 100 100 Full GENERALI Reassurance (Bermuda) Ltd. Company UK 100 100 100 100 Full SCOR Financial Services Ireland 100 100 100 100 Full Revios Canada Holding Corp. Ltd. Canada 100 100 100 100 Full Revios Canada Ltd. Canada 100 100 100 100 Full SCOR Global Life USA Holdings Inc. US 100 100 100 100 Full SCOR Global Life Americas Reinsurance Company US 100 100 100 100 Full SCOR Global Life Americas Holding Inc. (Delaware) US 100 100 100 100 Full SCOR Global Life Reinsurance Company of Delaware US 100 100 100 100 Full
The general reinsurance regulatory environment requires that underwriting liabilities be collateralized by pledged assets, cash deposits or letters of credit. Reinsurance commitments are recognized as liabilities within underwriting reserves and are offset by assets which are maintained for the settlement of claims. When the liabilities are not offset by cash deposited with the ceding companies, the underwriting reserves may be covered by pledged securities or letters of credit granted to ceding companies which are disclosed within off-balance sheet commitments.
(2) Includes letters of credits received from external retrocessionaires detailed in Note 16 – Net contract liabilities. (3) Represents the total amount of letter of credits granted by the Group in favor of its cedents, including those issued by banks on behalf of the Group. (4) This is the total carrying amount of financial assets pledged as collateral for liabilities or contingent liabilities, including Securities pledged, deposits received and letters of credit from retrocessionaires detailed in Note 16 – Net contract liabilities
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, the development of long-tail claims as well as external factors all beyond the Group’s control, especially inflation, legal and regulatory developments, and others, have an influence on the principal risk faced by the Group. Additionally, the Group is subject to the underwriting of cedents for certain reinsurance treaties, and to claims management by companies and the data provided by them. In spite of these uncertainties, the Group seeks to ensure that sufficient reserves are available to cover its liabilities (Refer to Section 6.1.3.5 – Reserves).
For a detailed description of the risks SCOR faces in its Property and Casualty business, as well as the cyclicality of the business refer to section 4.1.1 – SCOR is Exposed to Diverse Risk Factors in the Non-Life and Life Reinsurance Businesses, A. Non-Life reinsurance. Further see section 4.1.2 – SCOR is Exposed to Losses From Catastrophic Events, for a description of natural and man-made catastrophic events.
Catastrophe management is split into three sections under SCOR Global P&C: portfolio accumulation, optimization and procedures; research and development; and modeling in support of underwriting. Descriptive guidelines for each of the main business processes are available: ‘catastrophe methodologies’, ‘data quality & modeling’, ‘accumulation control’, ‘CAT pricing’ and ‘system & processes’. For CAT pricing, a matrix organization described in the guidelines has been implemented in each Hub, distributing the responsibility of CAT pricing to the CAT modelers, the pricing actuaries or the underwriter. In addition, a system of CAT referrals has been introduced in excess of a given threshold. For all SCOR's property business, it evaluates the accumulations generated by potential natural events and other risks. Pursuant to the rules and procedures, Regional Managers from SCOR’s natural catastrophes risks modeling team monitors the structure of the portfolio for each region or country and the data is consolidated under the supervision of the Head of natural catastrophes risks modeling.
These tools enable the Group to quantify its exposure in terms of a probable maximum loss (“PML”) at various levels of probability for each peril and geographic location. The overall aggregate annual PML per peril, allowing for potential multiple events, provides the information required to determine the level of retrocession and other alternative risk
 Accumulations are performed either on a notional basis (i.e. sum of event limits for underwritten share), or on a “manual PML” basis, applying a mean damage ratio to the peak zone aggregates.
For details on the concentration risks related to broker business refer to section 4.1.1 A. (d) – SCOR Global P&C faces concentration risks related to its broker business.
Information on exposures to asbestos and environmental claims is included in Note 16 – Net Contract Liabilities. Refer also to section 4.1.4 – SCOR Could be Subject to Increased Reserves from Business that it Does Not Actively Underwrite.
The main categories of risks for the life reinsurance underwritten by SCOR’s Life division are biometric, behavioral and catastrophe risks as well as risks linked to the types of guarantees, collateral requirements and recapture risks (see section 4.1.1 B – Life reinsurance for a detailed description of these risks. Refer also to section 4.1.2 – SCOR is Exposed to Losses From Catastrophic Events and section 6.1.3.4 Catastrophe (cat) Risk and Exposure Controls).
For a description of risks from business that SCOR does not actively underwrite refer to section 4.1.4 – SCOR Could be Subject to Increased Reserves from Business that it Does Not Actively Underwrite.
Further risks relate to 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 – Risk related to Financial Markets and section 4.2.3 – SCOR is Exposed to Other Risks Arising from the Investments it Owns).
Mandates for underwriting life reinsurance business are assigned to teams on a mutually exclusive basis. Life reinsurance treaties are underwritten by life reinsurance experts familiar with the specific features of their markets. The life business is underwritten in line with the market specific underwriting and pricing guidelines. Underwriting and pricing guidelines defined by SCOR Global Life specify the underwriting rules and principles to be complied with, underwriting capacities delegated to the underwriters and pricing actuaries in each of the markets in which the Group operates, as well as maximum acceptable commitments per risk and per event. In particular, these guidelines specify the type and the terms and conditions under which business is considered as acceptable. Furthermore, they set out the retention of SCOR Global Life for various risks and types of covers. They are approved by the Chief Executive Officer, the Head of the Central Actuarial and Underwriting Department, the Chief Risk Officer and the Chief Financial Officer of SCOR Global Life. Business opportunities going beyond the stipulations of these guidelines are subject to a special referral procedure at two key levels in order to ensure that the business respects defined riskadjusted return criteria and risk tolerance limits. These cases are examined at the SCOR Global Life level by the Life Central Actuarial and Underwriting Department and by the Risk Management Department and, where applicable, the Finance Department. These departments are located in Cologne and Paris. Cases which may have a significant impact on the balance sheet of the Group are additionally reviewed by the Group Risk Management function. Thresholds or conditions for a referral to Group Risk Management are defined in specific guidelines.
behavior, CI and disability risks. The SCOR Global Life Research & Development Centers provide recommendations for the implementation of the research results into the pricing, underwriting control and determination of exposure limits.
Biometric risks, other than pandemic risk, are diversified on a geographic and a product basis.
SCOR mitigates the credit risks related to bond and loans portfolios by implementing a policy of geographic and sector diversification. Limits by counterparty exposure and by rating are also defined. An exposure analysis is performed at a minimum, on a quarterly basis (sector, geographical area, counterparty, rating) and enables critical risks to be identified and evaluated in order to take appropriate actions. The Group has a prudent investment policy and put great importance on several selection criteria including internal assessments, the rating provided by the rating agencies to the issuer and the liquidity of the securities purchased.
SCOR’s retrocession departments regularly monitor its exposure to retrocessionaires by taking into account all relevant accounting balances (estimated and actual claims, premiums, reserves and deposits, pledges and security deposits). Summary reports are disclosed quarterly to the Risk Committee.
SCOR's capital shield policy includes traditional retrocession as well as the use of alternative risk transfer solutions (e.g., the multi-year securitization of catastrophic risk in the form of catastrophe bonds) and contingent capital facilities, which are designed as tools of last resort. The credit risk that SCOR may be exposed to through these alternative risk transfer solutions can be more limited than the credit risk related to traditional retrocession arrangements because alternative retrocession is usually fully collateralized, which is not the case with traditional retrocession. The retrocessionaires’ part in the reserves split by retrocessionaires’ financial rating is included in Note 16 – Net Contract Liabilities.
Credit risks related to contracts with cedents are mitigated through a quarterly examination of exposure and associated risks. Depending on the financial situation of the principal cedents, actions aimed at reducing or limiting exposure or mitigating the risk through guarantees on deposits (for example, via offset clauses) may be carried out. Moreover, should their financial strength deteriorate between the time their financial commitment is made and the time it must be honored, an appropriate financial provision is established in the Group’s accounts corresponding to the liability for which a loss is considered probable.
SCOR is exposed to credit risk in the event of a payment default by a debtor not linked to the Group by a reinsurance or retrocession treaty. Examples are advances to providers, social security contribution collection agencies or states, or loans to employees.
Concentration risk from cash deposits at banks is mitigated by defining counterparty exposure limits. Furthermore, SCOR selects bank counterparties according to their rating and credit quality. SCOR also considers the public assistance (e.g., loans, guarantees of deposits, nationalizations) certain banks may benefit from during a financial crisis, as they are important in the economy of their country.
Custodians are selected at Group level. Deposits are kept on segregated accounts in the name of SCOR.
Credit risk on future profits from Life reinsurance policies is in several countries mitigated by industry-wide protection solutions. In addition, SCOR follows the development of its clients through regular client contact, which allows SCOR to take appropriate action when deemed necessary. For more details on the impact of the valuation of intangible assets refer to section 4.2.5 – The Valuation of SCOR’s Intangible Assets And Deferred Tax Assets May Significantly Affect its Shareholders’ Equity and the Price of its Securities, and to Note 4 – Intangible assets.
Refer to section 4.1.14 I – Default of pool members, for a description of the related risks.
Insurance receivables 4,501 212 30 12 28 4,783 Taxes receivables 127 - - - - 127 Other assets 277 - - - - 277 Cash and cash equivalents 860 - - - - 860 TOTAL 31,090 214 30 12 28 31,374
As at 31 December 2014 3,531 4,086 3,044 2,365 13,026 As at 31 December 2013 3,571 3,532 2,688 2,563 12,354
Life insurance liabilities < 1 year 1-5 years 6-10 years > 10 years Total In EUR million
As at 31 December 2014 2,362 1,540 1,088 7,704 12,694 As at 31 December 2013 1,589 972 1,068 8,221 11,850
Total Subordinated debt 1.06% - 6.98% 92 280 1,623 1,995 Real estate debt 1.18% - 4.50% 64 385 82 531 Other financial debt 0.42% 6 2 1 9 TOTAL 162 667 1,706 2,535
Details on financial debts are presented in Note 14 – Financial Debt.
Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate fluctuations have direct consequences on the market value of SCOR’s fixed-income investments and therefore on the level of unrealized capital gains or losses of the fixed-income securities held in its portfolio. The return on the securities held also depends on changes in interest rates. Floating rate instruments expose the Group to cash flow interest risk, whereas fixed interest rate instruments expose the Group to fair value interest risk.
Refer to section 4.2.1 – SCOR Faces Risks related to Its Fixed Income Investments Portfolio, A. Interest rate risks, for a detailed description of interest rate risks. The Group’s objective is to maintain an appropriate mix of fixed and variable rate instruments. It also manages the maturities of interest bearing financial assets. The Group analyzes 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.
 For the business written in the UK, Scandinavia, US (traditional, non-savings products), and France (excluding Long-Term Care), valuation interest rates are locked-in based on a prudent estimate of the expected rate earned on assets held less a provision for adverse deviation.
The Group’s valuation exposure relates to financial assets and financial liabilities whose values will fluctuate as a result of changes in market prices, principally investments in equity securities.
Equity prices are likely to be affected by risks which affect all of the market (uncertainty on economic conditions in general, such as anticipated changes in inflation rate, fluctuations of interest rates, sovereign risk, etc.) and/or by risks which influence a single asset or a small number of assets (specific or idiosyncratic risk).
The Non-Life business has minimal sensitivity to equity price movements. The market sensitivities of the Group are estimated as follows: In EUR million Income (2) (3) Equity
Interest +100 basis point 12 (390) 13 (271) 10 (203) % of Equity 0.2% (6.8)% 0.3% (5.5)% 0.2% (4.2)% Interest – 100 basis points (13) 324 (13) 225 (10) 144 % of Equity (0.2)% 5.7% (0.3)% 4.6% (0.2)% 3.0% Equity markets +10% (1) 5 26 4 29 4 54 % of Equity 0.1% 0.5% 0.1% 0.6% 0.1% 1.1% Equity markets -10% (1) (5) (26) (5) (29) (15) (54) % of Equity (0.1)% (0.5)% (0.1)% (0.6)% (0.3)% (1.1)%
(1) Excludes investments in hedge funds which normally do not have a uniform correlation to equity markets and securities where SCOR has a strategic investment including where the Group has a substantial shareholding but does not meet the “significant influence” criteria in IAS 28. (2) The reduction in equity represents the estimated net asset impact including the additional impairment recognized in the profit and loss account. (3) Net of tax at an estimated average rate of 24% in 2014 (26% in 2013 and 30% in 2012).
The Group has one net investment hedge in place to reduce its exposure to variations in the net assets of USD functional currency subsidiary.
The Group recognized a net foreign exchange gain of EUR 11 million for the year ended 31 December 2014 (2013: loss of EUR 10 million and 2012: gain of EUR 23 million).
Equity impact In EUR million Currency movement 2014 2013 2012 USD/EUR 10% 271 252 211 % of Equity 4.8% 5.1% 4.4% USD/EUR (10)% (271) (252) (211) % of Equity (4.8)% (5.1)% (4.4)% GBP/EUR 10% 37 33 33 % of Equity 0.6% 0.7% 0.7% GBP/EUR (10)% (37) (33) (33) % of Equity (0.6)% (0.7)% (0.7)%
On 21 December 2009 SCOR filed an appeal to the sanctioning decision before the Administrative Chamber of the National Audience (Audiencia Nacional, or the "NA"). On 28 December 2012, the NA issued its judgment on the appeal, annulling the decision of the CNC. The NA accepted SCOR's grounds and declared that the company did not infringe the Competition Act. Consequently, the economic sanction impose on SCOR by the CNC has been annulled. The State Attorney (Abogado del Estado) representing the CNC has appealed the NA judgment to the Supreme Court (Tribunal Supremo) on January 2013. The Supreme Court has accepted the State attorney’s appeal on 10 October 2013. As a consequence the appeal is currently pending.
In application of the EC Commission Regulation No. 809/2004, the following information is included by reference in this Registration Document: (i) The report from the Statutory Auditors on the consolidated financial statements for the financial year ending 31 December 2013 published from pages 305 to 307 of the Registration Document filed with the Autorité des marchés financiers on 5 March 2014 under Number D.14-0117 (and from pages 297 to 299 of the free translation into English of such Registration Document, such translation being available on SCOR’s website www.scor.com).
In compliance with the assignment entrusted to us by your annual general meeting, we hereby report to you, for the year ended December 31, 2014, on:  the audit of the accompanying consolidated financial statements of SCOR SE;  the justification of our assessments;  the specific verification required by law.
These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these consolidated financial statements, based on our audit.
We have assessed the approaches used in this impairment test, the forecasted future taxable income and the assumptions made. We have verified that the information described in note 19 “Taxes” to the consolidated financial statements is appropriate.
The Report of the Chairman of the Board of Directors featured in Appendix B, has been the subject of a report by the SCOR statutory auditors, which is also included in Appendix B.
The notes 3, 4 and 5 of the management report published in appendix D of this registration document relate to the social and environmental impacts of SCOR's activities and the Group's social commitments. The information published in these paragraphs has been reviewed by one of the statutory auditors whose report is presented in appendix D.
The resolution to be presented to the Annual General Meeting to approve, during the first half of 2015, the accounts for the financial year 2014, sets out the distribution of a dividend of EUR 1.40 per share for the financial year 2014.
No material change has occurred in the Group’s financial or commercial situation since the end of the financial year 2014.
Date Amount of capital subscribed (In EUR) Number of shares outstanding 7 March 2012 1,512,842,643.14 192,058,901 3 May 2012 1,512,224,741.93 191,980,457 31 December 2012 1,512,224,741.93 191,980,457 5 March 2013 1,516,681,107.50 192,546,203 25 April 2013 1,512,224,741.93 191,980,457 31 December 2013 1,512,224,741.93 191,980,457 5 March 2014 1,512,224,741.93 191,980,457 31 December 2014 1,512,224,741.93 191,980,457(1) 4 March 2015 1,517,825,442.53 192 691 479
According to the decision of the Shareholders General Meeting of the Company dated 3 May 2012, the Board of Directors of the Company decided on 3 May 2012 the share capital reduction of EUR 1,703,397.26 by cancellation of 216,250 treasury shares to reduce the share capital from EUR 1,513,928,137.19 to EUR 1,512,224,741.93 divided by 191,980,457 ordinary shares. The reason for such decision of capital reduction is to avoid any dilutive effect of the exercise of stock options upon the share capital.
According to the decisions of the Extraordinary Shareholders General Meetings of the Company dated (i) 18 May 2004, in its fourth resolution, (ii) 31 May 2005 in its sixth resolution, (iii) 16 May 2006 in its fifth resolution, (iv) 24 May 2007 in its 21st resolution and (v) 7 May 2008 in its 19th resolution to authorize the Board to grant to officers and employees options to subscribe for or purchase of shares and to acknowledge, if necessary, at its first meeting following the year end of the Company, the number and amount of new shares issued during that period following the exercise of options, the Board of Directors of SCOR SE acknowledged, on 5 March 2013, the capital increase of EUR 4,456,365.57 by creation of 565,746 shares with a nominal value of EUR 7.8769723 each.
According to the decision of the Shareholders General Meeting of the Company dated 25 April 2013, the Board of Directors of the Company decided on 25 April 2013 the share capital reduction of EUR 6,935,437.80 by cancellation of 880,470 treasury shares to reduce the share capital from EUR 1,519,160,179.73 to EUR 1,512,224,741.93, divided by
According to the decisions of the Extraordinary Shareholders General Meetings of the Company dated (i) 18 May 2004, in its fourth resolution, (ii) 31 May 2005 in its sixth resolution, (iii) 16 May 2006 in its fifth resolution, (iv) 24 May 2007 in its 21st resolution, (v) 7 May 2008 in its 19th and (vi) 15 April 2009 in its 22nd resolution to authorize the Board to grant to officers and employees options to subscribe for or purchase of shares and to acknowledge, if necessary, at its first meeting following the year end of the Company, the number and amount of new shares issued during that period following the exercise of options, the Board of Directors of SCOR SE acknowledged, on 4 March 2015, the capital increase of EUR 5,600,700.60 by creation of 711,022 shares with a nominal value of EUR 7.8769723 each. As a result, on the date of the Registration Document, the registered share capital of SCOR SE is EUR 1 517,825,442.53 divided into 192,691,479 shares with a par value of EUR 7.8769723 each.
Document Date of availability of options Expiration date 16 Sept 2005 207,850 177,486 132,594 16 Sept 2009 16 Sept 2015 14 Sept 2006 421,223 377,121 353,457 15 Sept 2010 15 Sept 2016 14 Dec 2006 115,500 107,500 101,000 15 Dec 2010 15 Dec 2016 13 Sept 2007 772,000 679,000 618,238 13 Sept 2011 13 Sept 2017 22 May 2008 219,000 219,000 219,000 22 May 2012 22 May 2018 10 Sept 2008 588,000 474,250 430,050 10 Sept 2012 10 Sept 2018 23 March 2009 999,650 847,150 792,650 23 March 2013 23 March 2019 25 Nov. 2009 21,000 19,000 19,000 25 Nov. 2013 25 Nov. 2019 18 March 2010 1,237,000 991,300 927,100 19 March 2014 19 March 2020 12 Oct. 2010 28,000 22,700 14,500 13 Oct. 2014 13 Oct. 2020 22 March 2011 645,000 647,000 647,000 23 March 2015 23 March 2021 1 Sept 2011 240,000 214,500 214,500 2 Sept 2015 2 Sept 2021 23 March 2012 865,000 852,000 852,000 24 March 2016 24 March 2022 21 March 2013 716,000 707,500 707,500 22 March 2017 22 March 2023 2 October 2013 170,000 170,000 170,000 3 October 2017 3 October 2023 21 November 2013 25,000 25,000 25,000 22 November 2017 22 November 2023 20 March 2014 - 694,875 694,875 21 March 2018 21 March 2024 1December 2014 - 9,000 9,000 2 December 2018 2 December 2024 Total 7,270,223 7,234,382 6,927,464
Refer to Section 21.1.4 – Amount of convertible securities, exchangeable securities or securities with subscription warrants for a description of the warrants issued on 20 December 2013.
17th resolution (Delegation of authority granted to the Board of Directors for the purpose of making determinations with respect to the issuance, in the context of an offer referred to in paragraph II of Article L.411-2 of the French Monetary and Financial code, of shares and/or of securities granting access to capital or entitling the holder to a debt instrument, with cancellation of preferential subscription rights)
19th resolution (Delegation of authority granted to the Board of Directors for the purpose of the issuance of shares and/or securities granting access to the Company’s capital or giving entitlement to a debt instrument, as remuneration for shares contributed to the Company in the context of contributions in kind within a limit of 10% of the share capital, without preferential subscription rights)
21th resolution (Delegation of authority granted to the Board of Directors for the purpose of issuing securities granting access to the Company’s share capital, with cancellation of preferential subscription rights, reserved for one category of entities, ensuring the underwriting of the Company’s equity securities)
This resolution can only be used with the 15th and 16th resolutions and is in any case capped by the 26th resolution 23nd resolution (Authority to issue shares for stock option plans)
Except for the authorization granted pursuant to the 20th resolution, which is granted for a 26-month duration, the authorizations granted by the Shareholders’ Meeting of 6 May 2014 are each granted for 24-month duration as from the date of the Shareholders’ Meeting, i.e. until 6 May 2016, date on which it will be deemed expired if the Board of Directors did not use it.
The total amount of shares authorized at the date of the Registration Document, including the shares that could be issued in connection with the implementation (i) of stock option plans and allotment of free shares plans, (ii) equity securities and (iii) the current delegations and authorizations is 142,078,864.
In the context of the above mentioned buyback program and this liquidity agreement were as follows: SCOR proceeded, between 6 May 2014 and 31 December 2014, to:  the purchase of 2,682,403 treasury shares;  the sale of 1,659,510 treasury shares;  the transfer of 91,850 treasury shares. On 31 December 2014, SCOR held 6,593,132 shares compared with 7,167,371 shares at 31 December 2013. The par value of these treasury shares is EUR 51,933,918.13 and their book value is EUR 139,798,498.76.
In the context of a contingent capital facility program, SCOR issued 12,695,233 warrants (“Warrants”) on 20 December 2013 to UBS, each warrant committing UBS to subscribe for two new SCOR shares (maximum amount of EUR 200 million - including issuance premium available per tranche of EUR 100 million each - including issuance premium) when the aggregated amount of the estimated ultimate net losses resulting from eligible natural catastrophes or extreme events Life incurred by the Group (in its capacity as an insurer/reinsurer) reaches certain contractual thresholds in any given calendar year between 1 January 2014 and 31 December 2016 or if no drawdown already took place in the context of the agreement and SCOR’s share price drops below EUR 10.
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
French corporate law and the Company’s bylaws provide for prior approval and control of transactions entered into between, directly or indirectly, the Company and one of its Directors, Chief Executive Officer (Directeur Général), Chief Operating Officer (Directeur Général Délégué), any of its shareholders holding more than 10% of the registered capital or of the voting rights or, if a legal entity, the company controlling it within the meaning of article L. 233-3 of the French commercial code and, or any entity in which any of these persons is at the same time an owner, partner with unlimited liability, manager, director, member of the supervisory board or an executive officer, unless the transaction is entered into in the ordinary course of business and under normal terms and conditions. Article L. 225-38 of the French commercial code, as amended by the ordinance (ordonnance) no. 2014-863 of 31 July 2014, now also provides that the prior approval of the Board of Directors must be justified by the transaction interest for the company, in particular by specifying the financial conditions related thereto.
Under Article L. 225-43 of the French Commercial Code, the Directors, other than the legal entities, Chief Executive Officer (Directeur Général) and Chief Operating Officers (Directeurs Généraux Délégués) may not borrow money or obtain a guarantee from the Company. Any such loan or guarantee would be void and may not be relied upon by third parties.
As of the date of this Registration Document, the voting right attached to shares is proportional to the portion of share capital they represent. During a period of two years from the reverse stock-split of the Company’s shares implemented on 3 January 2007, any old share gave the right to one vote and any new share to ten votes, so that the number of votes attached to the shares shall remain proportional to the portion of share capital they represent.
The remaining old shares have been cancelled on 3 January 2009 and since then subject to applicable laws, all the shares of the Company give right to one voting right. At all meetings, each shareholder has as many votes as the number of shares he holds or represents without limitation other than those which may result from legal requirements and the stipulations above. The difference between the distribution of share capital and the distribution of voting rights arises from the existence of treasury shares with no voting rights.
Pursuant to the new provisions of article L. 225-123, paragraph 3, of the French commercial code, introduced by law no. 2014-384 of 29 March 2014, a dual voting right as compared to the single voting right attached to other shares, based on the portion of share capital they represent, is granted to fully paid-up shares in the registered form and in the name of the same shareholder for more than two years. It is specified that this period of time of two years is determined as from the date of entry into force of this law, i.e. 2 April 2014, insofar as the bylaws of SCOR SE do not contain any provision on dual voting right.
Where the shares are held by a beneficial owner, the voting rights attached to those shares belong to the beneficial owner at ordinary shareholders’ meetings, and to the bare owner at extraordinary shareholders’ meetings. Failure to observe the legal and statutory obligations concerning thresholds may be sanctioned by the removal of voting rights for those shares or rights exceeding the undeclared fraction.
Under French law, the Board of Directors is entitled to redeem a set number of shares as authorized by the extraordinary shareholders’ meeting to the aim of a capital reduction not motivated by losses. In the case of such an authorization, the shares redeemed must be cancelled within one month after the end of the offer to purchase such shares from shareholders. The Company may also acquire its own shares without having to cancel them:  Redemption to the aim of allocating them to the employees or to the officers of the Company (article L. 225208 of the French commercial code);  Redemption in the context of a share buyback program (article L. 225-209 of the French commercial code).
The Shareholders’ Meeting which decides or authorizes a capital increase may, under Article L. 225-135 of the French Commercial Code, eliminate the pre-emptive subscription right for the entire capital increase or for one or more segments of said increase and may allow or not allow a priority subscription period for shareholders. When the issue is carried out through a public offering or through an offer referred to in Article L.411-2, II of the French Financial and Monetary Code without pre-emptive subscription rights, the issue price must be set according to Article L. 225-136 of the French Commercial Code.
In accordance with French law concerning dematerialization (“dématérialisation”) of securities, the ownership rights of holders of the Ordinary Shares are not represented by share certificates but by book entries. Equity securities, such as the Ordinary Shares, may be held in either bearer or registered form, and a holder of equity securities may change from one form of holding to the other.
We maintain a share account with Euroclear France in respect of all Ordinary Shares in registered form (the “Company Share Account”), which, in France, is administered by BNP Paribas (“BNP”) acting on our behalf as our agent. Ordinary Shares held in registered form are inscribed in the name of each shareholder (either directly, or, at the shareholders’ request, through such shareholders’ accredited intermediary) in separate accounts (the “Shareholder Accounts”) maintained by BNP on our behalf. Each Shareholder Account shows the name of the holder and such shareholder’s shareholdings and, in the case of Ordinary Shares inscribed through an accredited intermediary, shows that they are so held. BNP, as a matter of course, issues confirmations as to holdings of Ordinary Shares inscribed in the Shareholder Accounts to the persons in whose names the shareholdings are inscribed, but these confirmations do not constitute documents of title.
In the case of Shares held in bearer form, the Ordinary Shares can be held on the Shareholder’s behalf by an accredited intermediary and are inscribed in an account maintained by such accredited intermediary with Euroclear France separately from the Company Share Account. Ordinary Shares held in this manner are referred to as being in bearer form. Each accredited intermediary maintains a record of Ordinary Shares held through it and will issue certificates of inscription in respect thereof. Transfers of Ordinary Shares held in bearer form may only be effected through accredited intermediaries.
The Ordinary Shares held by non-French residents can be registered in an account, either maintained by an accredited intermediary or us, under the name of their intermediary, who can represent several holders. These intermediaries, acting on behalf of shareholders living outside of France, are required to declare their capacity as intermediaries as soon as the account is opened. If we request, they must also provide the identity of the actual shareholder(s).
The rights of shareholders are set forth in the bylaws of the Company. Under Article L. 225-96 paragraph 1 of the French Commercial Code, amendments to the bylaws must be approved by the Extraordinary Shareholders’ Meeting, by a majority vote of two-thirds of the shareholders present or represented.
Special meetings of shareholders of a certain class of shares (such as shares with double voting rights or preferred shares) are required for any modification of the rights associated with such class of shares. The resolution of the shareholders’ general meeting affecting these rights is effective only after approval by the relevant special meeting.
The notice calling such meeting must state the agenda for such meeting. At least 15 days before the date set for any general meeting on first call, and at least ten days before any second call, notice of the meeting must be sent by mail to holders of Ordinary Shares who have held such Ordinary Shares in registered form for at least one month prior to the date of the notice. Such notice can be given by e-mail to holders of Ordinary Shares in registered form who have accepted in writing this method of convocation.
For all other holders of Ordinary Shares notice of the meeting is given by publication in a journal authorized to publish legal announcements in the county in which we are registered and in the Bulletin des annonces légales obligatoires ("BALO") with prior notice given to the AMF.
One or several shareholder(s), holding at least a certain percentage of SCOR’s share capital (computed on the basis of a formula related to capitalization which on the basis of our outstanding share capital as at 31 December 2014, would represent approximately 0.5% of our share capital), the Workers’ Council or a duly authorized association of shareholders holding their Ordinary Shares in registered form for at least two years and holding together a certain percentage of the voting rights (computed on the basis of a formula related to capitalization which on the basis of the outstanding share capital as at 31 December 2014, would represent approximately 1% of SCOR SE’s voting power) may, within 10 days after such publication, propose resolutions to be submitted for approval by the shareholders at the meeting.
The registration of shares in the bearer share accounts held by the authorized financial intermediary shall be demonstrated by a participation certificate issued by the latter, which must be attached to the remote voting form, to the proxy voting form, or to the request for an entry card completed in the name of the shareholder or on behalf of the shareholder represented by an authorized intermediary. A certificate shall also be issued to any shareholder wishing to take part in person in the Shareholders’ Meeting and who has not received his or her entry card by T-0 (Paris time) on the second trading day preceding the Shareholders’ Meeting. Each Ordinary Share confers on the shareholder the right to one vote. There is no provision in the bylaws (statuts) for double or multiple voting rights for the Company’s shareholders. Under French company law, Ordinary Shares held by entities controlled directly or indirectly by the Company are not entitled to any voting rights. Proxies may be granted by a shareholder or, under certain conditions, by its intermediary, to his or her spouse, to another shareholder, or by sending a proxy in blank to the Company without nominating any representative. In the latter case, the chairman of the meeting of shareholders will vote the Ordinary Shares covered by such blank proxy in favor of all resolutions proposed or approved by the Board of Directors and against all others.
Voting by mail is also allowed under French company law. Forms for voting by mail or proxy forms must be addressed to the Company, either by regular mail or, pursuant to a decision of the Board of Directors, in electronic format. Mail voting forms must be addressed to the Company within a period prior to the meeting as established by the Board of Directors. Such period may not exceed 3 days before the meeting date. Proxy forms must be received by the Company no later than 3 p.m. (Paris time) on the day prior to the meeting. The Board of Directors can also decide to allow the shareholders to participate in and vote at any shareholders’ meeting by videoconference or by any means of telecommunication that allows them to be identified and in compliance with the conditions set by applicable regulations. The presence in person (including those voting by correspondence) or by proxy of shareholders holding not less than one fifth (in the case of an ordinary general meeting or an extraordinary general meeting where an increase in our share capital is proposed through incorporation of reserves, profits or share premium) or one-fourth (in the case of any other extraordinary general meeting) of the Ordinary Shares entitled to vote is necessary for a quorum. If a quorum is not present at any meeting, then the meeting is adjourned. On a second call, there is no quorum requirement in the case of an ordinary general meeting or an extraordinary general meeting where an increase in the Company’s share capital is proposed through incorporation of reserves, profits or share premium and the presence in person (including those voting by correspondence) or by proxy of shareholders holding not less than one fifth of the Ordinary Shares entitled to vote is necessary for a quorum in the case of any other extraordinary general meeting.
At an ordinary general meeting, a simple majority of the votes cast is required to pass a resolution. At an extraordinary general meeting, a two-third majority of the votes cast is required, except for an extraordinary general meeting where an increase in our share capital is proposed through incorporation of reserves, profits or share premium, in which situation, a simple majority is sufficient. However, a unanimous vote is required to increase liabilities of shareholders.
Meetings are held at corporate head offices, or elsewhere as indicated in the notice of meeting. All shareholders may attend the Meetings, in person or through an agent, with proof of identity and of the ownership of shares, either in the form of registration in his name or a certificate from an authorized intermediary designated as account holder. The Board of Directors of the Company determines the time period during which formalities for the immobilization of bearer shares must be completed. This period is 24 hours under ordinary circumstances.
Subject to the terms and conditions set forth by the legal and regulatory provisions in force, shareholders may send their proxy voting forms or remote voting forms concerning any Shareholders’ Meeting either in paper format or, if approved by the Board of Directors, by an electronic means of communication. For instructions issued by shareholders via electronic means including proxy instructions or for electronic remote voting forms, the capture and electronic signature of the shareholder may be carried out directly, if applicable, on the dedicated website set up by the Company, by any reliable identification process that safeguards the link between the signature and the form as determined by the Board of Directors and in accordance with the conditions defined by the legal and regulatory provisions in force. The deadline for the return of remote voting forms and proxies shall be determined by the Board of Directors. Such deadline cannot be less than one day before the date of the Shareholders’ Meeting. However, if authorized by the Board of Directors, electronic remote voting forms and instructions given by electronic methods involving a proxy or a power of attorney may validly be received by the Company up until 3 p.m. (Paris time) on the day preceding the Shareholders’ Meeting.
21.2.7 PROVISIONS THAT COULD DELAY, DEFER OR PREVENT A CHANGE IN CONTROL OR IN THE SHAREHOLDING OF THE COMPANY
When a decrease or sale of an equity stake, whether directly or indirectly, has been notified, the ACPR verifies whether such transaction is likely to negatively affect the company's reinsured clients as well as the sound and prudent management (gestion saine et prudente) of the company itself.
The authorization granted to the acquisition or increase of stakes, whether directly or indirectly, may be subject to the compliance with commitments taken by one or several of the applying persons. In case of failure of these rules, and without prejudice of the provisions of Article L. 233-14 of the French commercial code, upon request from the ACPR, the District Attorney (procureur de la République) or any shareholder, the judge shall adjourn the exercise of the voting rights of the failing persons, until regularization of the situation. Pursuant to Article L. 322-4-1 of the French Code of Insurance, the ACPR shall also inform the European Commission of any acquisition of a stake that may grant control of a reinsurance company to a company whose registered office is located in a State not party to the European Economic Area agreement.
French law provides that any individual or legal entity, acting alone or in concert with others, that holds, directly or indirectly, more than 5%, 10%, 15%, 20%, 25%, 30%, 33 1/3%, 50%, 66 2/3%, 90%, or 95% of the shares or the voting rights attached to the shares, or whose holding decreases below any such thresholds, must notify us within four trading days of crossing that threshold, of the number of shares and voting rights it holds. An individual or a legal entity must also notify the AMF within four trading days of crossing such threshold. Any shareholder who fails to comply with these requirements will have its voting rights in excess of such thresholds suspended for a period of two years from the date such shareholder complies with the notification requirements and may have all or part of its voting rights suspended for up to five years by the Commercial Court at the request of our Chairman, any of our shareholders or the AMF. In addition, every shareholder who, directly or indirectly, acting alone or in concert with others, acquires ownership of shares representing 10%, 15%, 20% or 25% of our share capital must notify us and the AMF of its intentions for the six months following such acquisition. Failure to comply with this requirement will result in the suspension of the voting rights attached to the shares exceeding the applicable threshold held by the shareholder for a period of two years from the date on which the shareholder has cured such default and, upon a decision of the Commercial Court, part or all the shares of such shareholder may be suspended for up to five years. In addition to the above statutory requirements, the Company’s bylaws (statuts) provide that any natural person or legal entity, acting alone or in concert, which comes to hold or ceases to hold, either directly or indirectly, a fraction of the share capital or of the voting rights of the Company equal to or greater than 2.5%, or 5%, or 10%, or 15%, must inform us by registered letter, return receipt requested, addressed to the registered office, within five trading days of the date of the crossing of such threshold, of the total number of shares and/or of securities giving access to share capital held either directly or indirectly or in concert by such natural person or legal entity. The failure to comply with this requirement is sanctioned, upon request of one or more shareholders holding at least 2.5% of our share capital, noted in the minutes of the Shareholders’ Meeting, by the suspension of voting rights from all shares in excess of the non-declared fraction for any Shareholders’ Meeting that may take place during a period of two years following the date of the regularization of the notification.
Regulations of the AMF generally require, subject to limited exemptions granted by the AMF, any individual or entity that acquires, alone or in concert with others, shares representing 30% or more than SCOR’s share capital or voting rights, to initiate a public tender offer for all remaining outstanding securities of the company (including, for these purposes, all Ordinary Shares and all securities convertible into or exchangeable for or otherwise giving access to equity securities).
22 MATERIAL CONTRACTS For the two years immediately preceding publication of this Reference Document, there are no material contracts other than contracts entered into in the ordinary course of business, to which the issuer or any member of the Group is a party. As at the present Reference Document, there is no any other material contract (not being a contract entered into in the ordinary course of business) entered into by any member of the Group which contains any provision under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of the Reference Document.
23.2 Information from third parties The Company certifies that all the following information stated in this Registration Document and received from third parties has been accurately reproduced and that as far as the Company is aware and is able to ascertain from information published by such third party, no facts have been omitted, which would render the reproduced information inaccurate or misleading:  Data issued from the Standard & Poor’s Global Reinsurance Highlights (2014 Edition) and relating to the ranking on reinsurance market participants quoted in Section 3.1 – Group key figures and Section 6.5 – Information on SCOR ‘s competitive position;  Data issued from the Standard & Poor's Global Reinsurance Highlights (2010 Edition) and relating to ranking on reinsurance market participants quoted in Sections 5.1.5 - Important events in the development of the issuer's business;  Ratings issued by the Standard & Poor’s, Fitch Ratings, AM Best and Moody’s rating agencies quoted in Section 3.1 - Group key figures; Section 6.3 - Extraordinary events influencing the principal business and markets; Appendix B - Report of the Chairman of the Board of Directors - II. Internal control and risk management procedures;  2013 SOA / Munich Re Life survey of U.S. life reinsurance, published in 2014;  Benchmarking study realized by Mercer in 2014.
As at 31 December 2014, SCOR held indirectly shares or units in the following companies, which represent at least 10% of the consolidated net assets or generate at least 10% of the consolidated net profit or loss.
Registered office Type of business % Capital SCOR Switzerland AG General Guisan – Quai 26 – 8022 Zurich - Switzerland Reinsurance 100%
1 HISTORIC FINANCIAL INFORMATION - CORPORATE FINANCIAL STATEMENTS Pursuant to Article 28 of Regulation (EC) No. 809/2004 of the European Commission, the following information is included by reference in this Registration Document: (i) The corporate financial statements for the year ended 31 December 2013 and the Auditors’ Report pertaining thereto published on pages 342 to 372 and 373 to 374, respectively, of the registration document filed with the (Autorité des marchés financiers) on 5 March 2014 under number D. 14-0117 and from pages 334 to 363 and from pages 364 to 365, respectively, of the free translation into English of the Registration Document filed with the Autorités des marchés financiers with such translation being available on SCOR's website www.scor.com.
(ii) The corporate financial statements for the year ended 31 December 2012 and the Auditors’ Report pertaining thereto published on pages 344 to 372 and 373 to 374, respectively, of the registration document filed with the (Autorité des marchés financiers) on 6 March 2013 under number D. 13-0106 and from pages 331 to 358 and from pages 359 to 360, respectively, of the free translation into English of the Registration Document filed with the Autorités des marchés financiers with such translation being available on SCOR's website www.scor.com.
Reimbursement of the short-term financing agreement with a principal amount of USD 228 million On 1 October 2013, SCOR entered into a short-term financing agreement with a principal amount of USD 228 million maturing 14 July 2014 to partly finance the acquisition of Generali U.S. The loan bears interest indexed to the USD 1month Libor rate plus a spread ranging from 0.55% to 1.40% over the period. The agreement contained accelerated repayment clauses, an option to extend by 4 months the maturity date but did not set any financial covenant. This shortterm financing was early repaid during the first quarter of 2014.
Creation of SCOR BRAZIL RESSEGUROS SA In May 2014, SCOR SE created SCOR Brazil Resseguros SA with a EUR 33.5 million share capital.
Accrued income and deferred charges Note 4 151 - 151 2,020 Due and accrued interests on rental income 4 - 4 3
Reinsurance estimates - assumed - - - 1,914 Other accruals 39 - 39 17
Gross underwriting reserves Note 4 3,583 3,401 Reinsurance reserves (Life) 459 473 Loss reserves (Life) 169 177 Unearned premiums reserves (Non-Life) 404 324 Loss reserves (Non-Life) 1,962 1,871 Other underwriting reserves (Non-Life) 589 556 Equalization reserves (Non-Life) - - Underwriting reserves for unit-linked contracts
Other liabilities Note 4 745 734 Liabilities arising from reinsurance operations 2 - Convertible bond issue - - Debts to credit institutions - - Negotiable debt securities issued by the company - - Other loans, deposits and guarantees received 626 620 Other liabilities 117 114 Deferred income and accrued expenses Note 4 - 6 Deferred commissions received from reinsurers (Non-Life) - - Reinsurance estimates - Retrocession - 1 Other accruals - 5
In EUR million Gross transactions Retroceded transactions 2014 net transactions 2013 net transactions UNDERWRITING ACCOUNT, NON-LIFE
Acquisition and administration costs (339) - (339) (269) Acquisition expenses (321) - (321) (260) Administration expenses (18) - (18) (9) Commissions received from reinsurers - - - -
Investment revenues 51 - 51 48 Investment income 43 - 43 41 Other investment income 6 - 6 6 Realized gains 2 - 2 1
Claims expenses (238) - (238) (281) Benefits and costs paid (253) - (253) (302) Claims reserve expenses 15 - 15 21
Expenses for Life reinsurance and other underwriting reserves 21 - 21 7
Life reinsurance reserves 21 - 21 7 Unit-linked contract reserves - Other underwriting reserves -
Acquisition and administration costs (66) - (66) (115) Acquisition expenses (64) - (64) (108) Administrative expenses (2) - (2) (7) Commissions received from reinsurers -
Investment expenses (140) (145) Internal and external investment management expenses and interest expenses (96) (85)
In EUR million Related companies Other 2014 2013 COMMITMENTS RECEIVED Note 15 2,411 1,816 4,227 1,904
For active reinsurance companies, the fair value is estimated based on consolidated net assets, excluding goodwill and before elimination of shares, including unrealized capital gains or losses and by the Embedded Value for Life Reinsurance and forecasts of future profits for Non-Life Reinsurance, net of tax. It does not include the value of future business for Life Reinsurance. At each balance sheet date, if the carrying value of an investment in associate is below its historical cost, an analysis is conducted in order to determine if an impairment loss should be recorded. The assumptions and outcome of this analysis, conducted as at 31 December 2014, are detailed in Note 2.1. For real estate and financial (holding) companies, the fair value is calculated as the pro rata of the net assets including unrealized gains, net of tax. An impairment allowance is recorded on a line-by-line basis when such values are below historical cost.
When the realizable value is more than 20% below the initial cost for more than six consecutive months, a detailed lineby -line analysis is performed to determine whether the impairment is permanent. In accordance with the Notice of 18 December 2002 (amended on 15 December 2008) issued by the Emergency Committee of the French National Accounting Commission, an impairment allowance is recorded on a line-by-line basis for securities which are considered permanently impaired.
Transport equipment 4 to 5 years Deposits and security deposits relate primarily to rented facilities.
 Senior management pension obligations (Article 39): The valuation of the reserve for senior management pension obligations is based on the following actuarial assumptions: - Discount rate: 2.06%, defined with respect to high quality long-term corporate bonds with duration in line with the duration of the obligations evaluated.
- Updated mortality tables for the various plans, with turnover data for managers and salary increases.  Long-term service awards: the CNC (French accounting standard setter) Notice 2004-05 dated 25 March 2004 requires the recognition of a provision for long-term service awards as from 2004.
The Company recorded all past service costs unrecognized as at 1 January 2013 through retained earnings for EUR 3 million in accordance with Statement 2013-02 dated 7 November 2013.
Debt issuance costs are amortized over the life of the respective debt. Interests on financial debt are included in financing expenses.
The retroceded portion of assumed reinsurance, determined in accordance with the treaty terms, is recorded separately from the assumed reinsurance transaction. The retrocessionaires’ share in estimates of assumed premiums and commissions is shown in liabilities under “Liabilities arising from reinsurance operations”.
SCOR determines the amount of loss reserves at the end of the year at a level which covers the estimated amount of its commitments as well as estimated claims management costs for both reported and unreported claims (net of estimated recovery and subrogation). These reserves, which pertain to all claims, reported or unreported, are evaluated on the basis of their undiscounted “ultimate” cost. Ultimate claims expense for a contract is estimated based on statistical experience for similar policies. Loss reserves, including estimated claims paid, are calculated based on expected results and supplement the information communicated by ceding companies.
The Company is required to have adequate reserves to cover its commitments after consideration of estimated investment returns, mortality, morbidity and lapse rates, and other assumptions. A provision for increasing risk is recorded for long-term care and disability business. This risk increases with the age of the insured although the premiums are typically constant. It is equal to the difference between the discounted values of the respective commitments of the insured and insurer.
Pursuant to the provisions of article R. 341-7 of the French Insurance Code, foreign currency transactions of the Company are recorded in their original currency. For purposes of financial statements’ presentation, balance sheet amounts are converted into Euro using the year end exchange rates or the rate of the closest prior date. Since 1 January 2008, SCOR has applied the new rules relating to the accounting of transactions in foreign currencies by entities subject to the rules of the Insurance Code as required by the CNC in its opinion n° 2007-02 dated 4 May 2007.
At each balance sheet date, items in foreign currencies are converted into Euro by allocating the underlying transactions as follows:  Transactions relating to assets and liabilities generating a “structural” foreign currency position, primarily investments in subsidiaries and related impairments;  Other transactions generating an “operational” foreign currency position.
Interest differences relating to forward contracts are recorded in interest expense or income over the effective life of the hedged operation.
Impact of foreign exchange on opening balances Acquisitions creations Disposals Closing balances In EUR million Land - - - - - Buildings - - - - - Shares in and advances to land and real estate companies 207 - - - 207 Equity interests 4,263 - 56 - 4,319 Cash deposited with ceding companies (related & associated companies) 29 - - 1 28 Loans (related and associated companies) 1,122 - 677 297 1,502 Other investments 171 19 718 560 348 Cash deposited with other ceding companies - - - - - TOTAL 5,792 19 1,451 858 6,404
Land - - - - - Buildings - - - - - Shares in and advances to land and real estate companies 1 - - - 1
Equity interests 240 - 8 62 186 Loans (related and associated companies) - - - - -
The treasury advance with SCOR AUBER SA has increased by EUR 123 million and has been partially repaid for EUR 57 million during the year.
At 31 December 2014, provisions against equity investments can be analyzed as follows:  SCOR US Corporation: EUR 176 million in 2014 compared to EUR 238 million in 2013.
The shares held in SCOR US Corporation were valued using the following method and assumptions: enterprise value was assessed based on revalued net assets increased by the creation of future value determined using the Discounted Cash Flow (DCF) method. Projected income was used for the DCF method.
 MOBILITY: EUR 1 million in 2014 compared to EUR 0 million in 2013  SGF: EUR 3 million in 2014 compared to 2 million in 2013.
As at 31 December 2014, loans and advances granted by SCOR SE to its subsidiaries amounted to EUR 1,503 million (including EUR 750.8 million to SCOR Global Life SE, EUR 400 million to SCOR Global P&C SE, EUR 135.3 million to SCOR AUBER SA and EUR 102.3 million to GIE Informatique) compared to EUR 1,122 million as at 31 December 2013 (including EUR 952 million to SCOR Global Life SE, EUR 70 million to SCOR AUBER SA and EUR 88 million to GIE Informatique). During the fiscal year, the cash advance with SCOR AUBER SA has increased of EUR 123 million and has been partially repaid for EUR 57 million.
(1) Data based on IFRS accounts 2014 (2) SCOR guarantees with limits as to amounts listed above, the underwriting liabilities of its subsidiaries pertaining in particular to their obligations relative to the payment of claims. In return, SCOR GLOBAL P&C SE and SCOR GLOBAL LIFE SE guarantee, on behalf and for the benefit of SCOR SE, the full and prompt performance of all of SCOR SE's payment obligations under all insurance, reinsurance and financial contracts entered into by SCOR SE (*) OC: Original Currency
As at 31 December 2014, the number of shares held as treasury shares amounted to 6,593,132 shares (3.42% of capital) for a total value of EUR 139,798,498. These shares were acquired in the context of anticipated awards to Company employees and officers as part of share allotment plans.
In EUR million Related companies Other affiliates Other Total Related companies Other affiliates Other Total ASSETS (Gross) Investments 6,050 - 354 6,404 5,589 - 203 5,792 Investment properties 205 - 2 207 205 - 2 207 Shares other than variable-income securities and bonds 4,316 - 43 4,359 4,262 - 201 4,463
Other assumed reinsurance transactions - - - - 1,829 - 85 1,914 Other accruals 4 - 35 39 - - 17 17 LIABILITIES Other capital base - - 1,642 1,642 - - 1,270 1,270
Deferred income and accrued expenses - - - - 2 - 4 6
The list of material related-party transactions required by French accounting standard CRC 2010-06 issued on 7 October 2010 is not applicable to SCOR SE as all related-party transactions are with 100%-owned entities.
Other accounts receivable 115 - 82 197 121 - 48 169 Treasury advances granted 37 - - 37 59 - - 59 Transfer pricing receivables 52 - - 52 31 - - 31 Miscellaneous 26 - 82 108 31 - 48 79
 On 28 July 2006 SCOR issued a perpetual super-subordinated notes (Tier 1 type) in an aggregate principal amount of EUR 350 million acquisition to finance the acquisition of Revios Rückversicherung AG. This debt has been reduced to EUR 257 million after repurchase of EUR 93 million during 2009. The bond issuance is represented by last-rank subordinated bearer notes with a par value of EUR 50,000 each bearing interest at an initial rate of 6.154% per annum, a floating-rate indexed on the 3-month EURIBOR plus a margin of 2.90%, payable quarterly. No fixed redemption date is set but SCOR SE reserves the right to redeem the bonds in full or in part as from 28 July 2016. SCOR Holdings Switzerland (SHS) repurchased part of the subordinated perpetual debt (350 million) for EUR 93 million. This repurchase resulted in the cancellation of the debt (EUR 93 million) on 27 July 2009. In SCOR SE’s accounts, this decrease in debt resulted in a new internal loan from SHS for EUR 93 million with the same characteristics as the subordinated perpetual debt.
 CHF 650 million fixed rate perpetual subordinated notes issued in two pari-passu ranking placements on 2 February and 3 June 2011. The notes are redeemable by SCOR each quarter as at payment of interests date as from 2 August 2016 with a first call date of 2 August 2016. The coupon has been set at 5.375% (until 2 August 2016) and to 3-month CHF LIBOR plus a margin of 3.7359% thereafter. The notes are hedged with a cross-currency swap detailed in Note 15.1.1 - Financial instruments received and given, in the analysis of commitments given and received.
 CHF 250 million fixed rate perpetual subordinated notes issued on 10 September 2013. The notes are redeemable by SCOR from 30 November 2018 on a quarterly basis on the payment of interest dates. The coupon has been set at 5% until 30 November 2018 and to 3-month CHF LIBOR plus a margin of 4.10% thereafter. If SCOR does not exercise this option on such date, such repayment may intervene, where applicable, quarterly, at the date of payment of interests. The notes are hedged with a cross-currency swap detailed in Note 15.1.1 - Financial instruments received and given, in the analysis of commitments given and received.
 CHF 125 million fixed rate perpetual subordinated notes issued on 20 October 2014. The notes are redeemable by SCOR from 20 October 2020 on a quarterly basis on the interest payment dates. The coupon has been set at 3,375% until 20 October 2020 and resets every 6 years at the prevailing 6-year CHF mid-swap rate plus a margin of 3.0275% thereafter. The notes are not hedged with a cross-currency swap.
 Loans granted to SCOR by its subsidiaries, mainly SCOR Global P&C SE (see Note 2.3 - Subsidiaries and Affiliates).
In EUR million 2014 2013 2012 Reinsurance reserves (Life) 459 473 484 Loss reserves (Life) 169 177 202 Unearned premiums reserves (Non-Life) 404 324 280 Loss reserves (Non-Life) 1,962 1,871 1,766 Other underwriting reserves (Non-Life) 589 556 541 Gross underwriting reserves 3,583 3,401 3,273
Perpetual debt (other equity) 20 - 1,622 1,642 Other loans and deposits received /(*) 414 - 212 626 TOTAL 434 - 1,834 2,268
The analysis of accrued income and deferred charges at 31 December 2014 is as follows: ASSETS LIABILITIES In EUR million 2014 2013 2014 2013 Reinsurance estimates - assumed - 1,914 - 1 Reinsurance estimates - assumed - Life - 652 - - Reinsurance estimates - assumed - Non-Life - 1,267 - 1 Other reinsurance estimates - (5) - - Due and accrued interests on rental income 4 3 - - Deferred acquisition costs - Non-Life 108 86 - - Other accruals 39 17 - 5 TOTAL 151 2,020 - 6
The share capital comprising 192,691,479 shares with a par value per share of EUR 7.8769723 amounted to EUR 1,517,825,443 as at 31 December 2014.
Retained earnings 21 (16) - 5 Net income 227 (227) 387 387 Regulated reserves 15 - - 15 TOTAL 2,650 (243) 387 2,794
 The issuance of shares relating to the exercise of options until 31 December 2014 for a total of EUR 11.7 million were allocated to the share capital of the Company for EUR 5.6 million and to additional paidin capital for EUR 6.1 million. The exercise of options resulted in the creation of 711,022 shares.
 In the context of a contingent capital arrangement program, SCOR issued 9,521,424 warrants on 17 December 2010 to UBS, each warrant committing UBS to subscribe for two new SCOR shares (maximum amount of EUR 150 million in two tranches of EUR 75 million each, including issuance premium) when the aggregated amount of the estimated ultimate net losses resulting from eligible natural catastrophes incurred by the Group (in its capacity as an insurer/reinsurer) reached certain contractual thresholds in any given calendar year between 1 January 2011 and 31 December 2013 or if no drawdown already took place in the context of the agreement and SCOR’s share price dropped below EUR 10. The issuance of 4,250,962 new shares related to the first tranche of contingent capital for EUR 75 million in July 2011 was allocated to the share capital of the Company for EUR 33.5 million and to additional paid-in capital for EUR 41.5 million.
 SCOR SE launched a new 3-year contingent capital facility to replace, as at 1 January 2014, the contingent capital facilities which came to an end on 31 December 2013. This takes the form of a guaranteed equity line, providing SCOR SE with EUR 200 million coverage in case of extreme natural catastrophe or life events. Under this new EUR 200 million arrangement, SCOR raises its protection versus the existing contingent capital facility by EUR 50 million.
 During 2014, the Board decided upon a share capital reduction by cancellation of a total of 777,454 treasury shares for a total amount of EUR 6.1 million.
Contingency reserves amount to EUR 125 million, of which:  EUR 28 million for free share allotment plans with the following expiry: EUR 10 million at 2015, EUR 8 million at 2016, EUR 5 million at 2017, EUR 3 million at 2018 and EUR 2 million at 2019 and beyond.
A plan amendment to the “congés de fin de carrière” and the “médailles du travail” in France occurred in the second quarter of 2014. The amendments concern the termination of the “congés de fin de carrière” on 1 January 2017 and the termination of the “médailles du travail” as at 14 July 2019. In addition, a temporary scheme called "compte senior" was implemented during the second quarter of 2014 and will be active to 31 December 2020. This scheme aims to provide, under conditions, a premium to employees going into retirement. The plan amendment resulted in a reduction of the retirement provisions. The corresponding income is recorded as a reduction of general expenses.
8.1 BREAKDOWN OF PREMIUMS BY GEOGRAPHIC REGION (COUNTRY WHERE CEDENT IS LOCATED)
SCOR SE premiums are the result of the implementation of four internal quota share retrocession treaties entered into jointly with SCOR Global P&C SE, SCOR Global Life SE, SCOR SOUTH AFRICA and SCOR PERESTRAKHOVANIYE, non-proportional retrocession from the Argentinian branch of SCOR Global P&C SE as well as the Chinese branch's activity.
NOTE 9 - ANALYSIS OF INVESTMENT INCOME AND EXPENSES BY NATURE
Dividends received from subsidiaries amount to EUR 355 million and include: SCOR Global Life SE EUR 125 million, SCOR Global P&C EUR 97 million, SCOR Holding Switzerland EUR 61 million, SCOR AUBER SA EUR 40 million, SCOR Global Investments SE EUR 7 million, MRM SA EUR 3 million and SCOR US USD 28 million (EUR 22 million). Results from transactions involving financial instruments (rate swaps, interest-rate options, real estate swap) were posted to financial income in the net amount of EUR 0 million in 2014 as in 2013.
NOTE 10 - ANALYSIS OF GENERAL EXPENSES BY NATURE AND NON RECURRING RESULT
It breaks down into extraordinary income for EUR 1.3 million and extraordinary expenses for EUR 6.9 million.
SCOR SE, as a stand-alone company, has a tax loss carry-forward. The corporate tax gain of EUR 14 million relates mainly to:  the contribution of subsidiaries that are consolidated for tax purposes by EUR 16.7 million;  taxes from branches of EUR 3.2 million;  tax expenses for the tax group for EUR (1.4) million (of which EUR 0.5 million non-recurring);  tax profit for previous financial years for EUR 3.4 million;  additional contribution on income distributed for EUR (6.5) million.
In 2014, 711,022 rights of options were exercised: 46,534 rights of options exercised under the stock option plan of 25 August 2004 vested on 26 August 2008, 30,188 options exercised under the stock option plan of 16 September 2005 vested on 16 September 2009, 34,050 options exercised under the stock option plan of 14 September 2006 vested on 14 September 2010, 3,000 options exercised under the stock option plan of 14 December 2006 vested on 14 December 2010, 90,00 options exercised under the stock option plan of 13 September 2007 vested on 13 September 2011, 111,250 options exercised under the stock option plan of 10 September 2008 vested on 10 September 2012, 152,500 options exercised under the stock option plan of 23 March 2009 vested on 23 March 2013, 2,000 options exercised under the stock option plan of 25 November 2009 vested on 25 November 2013, 239,200 options exercised under the stock option plan of 18 March 2010 vested on 18 March 2014 and 2,300 options exercised under the stock option plan of 12 October 2010 vested on 12 October 2014.
The following table presents the gross cash compensation paid in 2013 and 2014 to the Group Chairman & CEO: Chairman and CEO
In EUR 2014 2013 Fixed compensation 1,200,000 1,200,000 Variable compensation 1,314,500 950,000 Directors' fees 44,000 48,000 TOTAL CASH COMPENSATION 2,558,500 2,198,000
Total pension benefits commitments relating to the corporate officer (“mandataire social”) amount to EUR 28.3 million.
In EUR million 2014 2013 2014 2013 Ordinary business operations (Note 15.1) 4,227 1,904 11,704 1,341 Financial instruments (Note 15.1.1) 1,506 1,324 1,463 1,306 Confirmed credits, letters of credit and guarantees given (Note 15.1.2) 461 580 20 18 Other commitments given and received (Note 15.1.3) 2,260 - 10,221 17 Hybrid transactions (Note 15.2) - - TOTAL 4,227 1,904 11,704 1,341 15.1 COMMITMENTS RECEIVED AND GIVEN IN THE ORDINARY COURSE OF BUSINESS
In EUR million 2014 2013 2014 2013 Rate swaps - - - -
Cross-currency swaps are used to hedge foreign exchange and rate risks of perpetual notes in CHF issued in 2011 and 2012: the instruments exchange the principal of 2011 placements for a total of CHF 650 million into EUR and exchange the coupon on the CHF 400 million placement to 6.98% and on the CHF 250 million placement to 6.925%. Both instruments mature on 2 August 2016. Additional instruments exchange the principal of 2012 placements for a total of CHF 315 million into EUR and exchange the coupon on the CHF 250 million tranche to 6.2855% and on the CHF 60 million tranche to 6.235%. These latest instruments mature on 8 June 2018.
 Commerzbank: USD 20 million (EUR 16 million) and EUR 2 million
In consideration of its commitments relating to technical reserves, SCOR SE has granted letters of credit in the amount of USD 7 million (EUR 6 million) to cedents compared to EUR 461 million in letter of credit capacity received from banks.
The guarantee given in consideration for underwriting commitments with the cedent ACE was USD 15 million (EUR 12 million). This guarantee was in the form of securities pledged to ceding companies.
In EUR million 2014 2013 2014 2013 Guarantees and securities /(*) - - 1 9 Underwriting commitments - - - Assets pledged to ceding companies - - - - Marketable securities pledged to financial institutions - - - -
Parental guarantee 2,260 - 10,219 - Contract termination indemnities - - 1 8 TOTAL 2,260 - 10,221 17
Apart from mentioned commitments in the note above, the Company no longer has any commitment with respect to hybrid transactions such as asset swaps or index default swaps. No facts in connection with the aforementioned commitments given and received have come to SCOR’s knowledge, which may have an adverse impact on cash flows, cash positions or on its liquidity requirements.
On 12 November 2009, and following an administrative sanctioning procedure, the Spanish competition authority (Comisión Nacional de la Competencia, or the “CNC”) sanctioned SCOR Global P&C SE Ibérica Sucursal, a branch of SCOR Global P&C, and a number of other insurance and reinsurance companies for an alleged infringement of Article 1 of Law 15/2007, of 3 July 2007, on Competition (the “Competition Act” which prohibits agreements and concerted practices that may have as an object or effect the restriction of competition in the market). The infraction would have consisted in an agreement to set the minimum price and other commercial conditions applied to customers in the market for decennial insurance for construction in Spain. Pursuant to such decision, SCOR was required to pay a fine of EUR 18.6 million. Other insurers and reinsurers were also fined in relation to the same matter.
On 21 December 2009, SCOR filed an appeal to the sanctioning decision before the Administrative Chamber of the National Audience (Audiencia Nacional, or the "NA"). On 28 December 2012, the NA issued its judgment on the appeal, annulling the decision of the CNC. The NA accepted SCOR's grounds and declared that the company did not infringe the Competition Act. Consequently, the economic sanction impose on SCOR by the CNC has been annulled. The State Attorney (Abogado del Estado) representing the CNC has appealed the NA judgment to the Supreme Court (Tribunal Supremo) on January 2013. The Supreme Court has accepted the State attorney’s appeal on 10 October 2013. As a consequence the appeal is currently pending.
On the basis of the two directors and officers insurance policies in excess coverage, SCOR also commenced two distinct procedures on 10 January 2012 and 22 June 2012 before the Commercial Court of Nanterre and the Commercial Court of Paris against two insurance companies with respect to the recovery of the attorneys’ fees and costs and a portion of the settlement amount relating to the litigation with Highfields Capital LTD, Highfields Capital I LP and Highfields Capital II LP covered by its excess policies.
1.6 Certification of audit of historical financial information This is a free translation into English of the statutory auditors’ report on the financial statements issued in French and it is provided solely for the convenience of English-speaking users. The statutory auditors' report includes information specifically required by French law in such reports, whether modified or not. This information is presented below the audit opinion on the financial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the financial statements taken as a whole and not to provide separate assurance on individual account balances, transactions or disclosures. This report also includes information relating to the specific verification of information given in the management report and in the documents addressed to the shareholders.
In compliance with the assignment entrusted to us by your annual general meeting, we hereby report to you, for the year ended December 31, 2014, on:  the audit of the accompanying financial statements of Scor SE;  the justification of our assessments;  the specific verifications and information required by law.
We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In accordance with the requirements of article L. 823-9 of the French commercial code (“Code de commerce”) relating to the justification of our assessments, we bring to your attention the following matters:  As stated in notes 1.7 and 1.9 to the financial statements, the technical accounts specific to reinsurance are estimated on the basis of reinsurance commitments or on statistical and actuarial bases, particularly the technical estimates accounted for under receivable from reinsurance transactions, gross and ceded technical reserves, and deferred acquisition costs. The methods used to calculate these estimates are described in the notes to the financial statements.
Our work consisted in assessing the data and assumptions on which the estimates are based, with regard to the experience of your company, the regulatory and economic environment, as well as the overall consistency of these assumptions.
 Notes 1.2, 1.10, 1.12, 2 and 15.1.1 to the financial statements describe the principles and methods used to estimate the valuation and impairment of investments and derivative instruments.
 Notes 6 and 17 to the financial statements describe the uncertainties relating to the potential litigation encountered by your company.
We examined the company’s procedures to identify these risks, to evaluate and reflect them in the annual financial statements.
Our work consisted in assessing the data and assumptions used, reviewing your company’s calculations and verifying that the information provided in notes 1.5 and 6 to the financial statements is appropriate.
Concerning the information given in accordance with the requirements of article L. 225-102-1 of the French commercial code (“Code de commerce”) relating to remunerations and benefits received by the directors and any other commitments made in their favor, we have verified its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your company from companies controlling your company or controlled by it. Based on this work, we attest the accuracy and fair presentation of this information.
In accordance with French law, we have verified that the required information concerning the purchase of investments and controlling interests and the identity of the shareholders or holders of the voting rights has been properly disclosed in the management report.
Shareholders' Equity in French GAAP (statutory basis) 2,794 2,650 Deferred taxes under IFRS 414 414 Gain from bargain purchase (net of acquisition costs) - 202 Other consolidation adjustments 2,632 1,859 Treasury shares (139) (142) Increase / decrease of French GAAP accrual for share award plans 28 (3)
APPENDIX B: REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS In accordance with the provisions of article L. 225-37 of the French Commercial Code, this report serves to set forth the composition of the Board of Directors and the implementation of the principle of balanced representation of women and men among its members, the terms and conditions for the preparation and organization of the work of the Company’s Board of Directors, in addition to the internal control and risk management procedures that have been implemented by the Company. This report has been approved by the Board of Directors on 4 March 2015.
It has been incorporated in Appendix B of the 2014 Registration Document of SCOR SE (“SCOR” or the “Company”) which is available on the Company’s web site (www.scor.com) and on the AMF web site (www.amf-france.org). During its meeting on 12 December 2008, the Company’s Board of Directors designated the consolidated corporate governance code listed corporations of the AFEP-MEDEF (Association Française des Entreprises Privées – Mouvement des Entreprises de France) of December 2008 and updated in April 2010 and June 2013 (“AFEP-MEDEF Governance Code”) as its reference code, according to the implementation of this law on 3 July 2008 (act no. 2008-649 aimed at providing various provisions regarding the adaptation of French company law with the European Community law changing articles L. 225-37 and L. 225-68 of the French Commercial Code). Details of this code can be found on the Company’s website www.scor.com or alternatively on MEDEF’s website www.medef.fr.
I. Terms and conditions for preparing and organizing the work of the Board of Directors (A) COMPOSITION AND FUNCTIONNING OF THE BOARD OF DIRECTORS The Board of Directors’ composition is guided by the following principles:  Application of the best in class corporate governance practices;  An appropriate number of Board members in order to allow meaningful individual participation;  A majority of independent Directors, pursuant to criteria adopted by the Board of Directors based on those set forth in the AFEP-MEDEF Governance Code. The Audit, Risk and Compensation and Nomination Committees are fully composed of independent directors, except, since 4 March 2015, for the employee representative who is a member of the Compensation and Nomination Committee ;  A diversity of expertise. In addition to experts drawn from the insurance and reinsurance sectors, the Board of Directors has members representing the sector of banking, asset management and industry;  An international perspective;  A high rate of female Board members pursuant to the French Code of Commerce and to the AFEF-MEDEF
A list of the members of the Company’s Board of Directors as of 31 December 2014 is shown below: Name Age Citizenship Date of 1st appointment End of duty Renewal dates Denis Kessler, Chairman of the Board 62 French 04/11/2002 2017 04/05/2011 Gérard Andreck 70 French 18/03/2008 2015 25/04/2013 Andreas Brandstetter 45 Austrian 25/04/2013 2015 N/A Thierry Derez 57 French 25/04/2013 2017 N/A Peter Eckert 69 Swiss 15/04/2009 2015 04/05/2011 Kevin J. Knoer 57 American 03/05/2012 2016 06/05/2014 Charles Gave 71 French(2) 04/05/2011 2015 25/04/2013 Guillaume Sarkozy (1) 63 French 15/04/2009 2017 04/05/2011 Guylaine Saucier 68 Canadian 04/05/2011 2015 N/A Kory Sorenson 46 British 25/04/2013 2015 N/A Claude Tendil 69 French 15/05/2003 2017 04/05/2011 Daniel Valot 70 French 15/05/2003 2015 04/05/2011
The experience and competences of the Directors are highly diverse. In addition to the Chairman of the Board, six of the Directors listed work or have worked at an executive level within the insurance industry and three Directors within in the financial and banking industry. The main activity of three of them is to be Company Directors. The Board benefits from international experience with Board Members living in United Kingdom, Austria, Switzerland, United States, Canada and Hong Kong.
Concerning the duration of the duties of the Directors, the Annual General Meeting held on 25 April 2013 decided to change the bylaws of the Company by limiting the mandates of the Board members to four years in order to comply with the AFEP-MEDEF Governance Code. The term of mandates being shorter implies that renewals are more frequent, reinforcing the need for the Board to ensure a good spread of these at the Annual General Meeting.
The Board of Directors determines the Group’s business plan, oversees the implementation of the business plan, and supervises management’s administration. The Board meets at least four times a year. In accordance with legal provisions, it approves the financial statements, proposes dividends, and makes investment and financial policy decisions. Since 4 March 2015, some operations are subject to the prior approval of the Board: the organic growth investments and major internal structuring operations, any significant operation falling outside of the strategy announced by the Group and any project regarding a sale or acquisition, merger or asset contribution higher than one hundred million euros (EUR 100 million). According to the French law, the Board of Directors also determines the amount and the nature of the sureties, securities and guarantees that can be granted by the Chief Executive Officer on behalf of the Company. The Board’s duties and responsibilities are set out in SCOR SE’s bylaws (statuts).
At least five days before any meeting of the Board of Directors, the Chairman and Chief Executive Officer is required to submit a file to the Directors including all information and documents that will allow them to participate and to intervene in the Board’s discussions listed on the agenda. Furthermore, outside of Board of Directors meetings, the Chairman and Chief Executive Officer is required to submit to the Directors any information and documents necessary to complete their duties, and the Directors may submit requests for information to the Chairman and Chief Executive Officer. In addition, Directors may ask the Chairman and Chief Executive Officer to invite the principal top executives of the Company to attend Board of Directors meetings, including when executive corporate officers are absent.
The independence of the directors is assessed on the basis of the following criteria, pursuant to the AFEP-MEDEF Governance Code: 1. An independent director must not currently be, or have been within the last five years, an employee or a corporate officer of SCOR or an employee or a director of a company consolidated by the Company. However, a director may be qualified as independent provided that he abstains from taking part in board decisions in the event of conflict of interest with the subsidiary concerned; 2. must not have received, in any form, remuneration greater than EUR 100,000 per year from the Company within the last five years, excluding that received as directors’ fees; 3. must not be a corporate officer in a company in which SCOR directly or indirectly is a director, or in which an employee has been appointed as such, or in which one of SCOR’s corporate officers (currently or within the last five years) is a director; 4. must not be a significant customer, supplier, or investment or corporate banker of SCOR or its Group, nor shall SCOR or its Group represent a significant part of such person’s business activities. A business relationship is deemed significant if it amounts to an annual sum of more than 5% of SCOR’s consolidated turnover, or more than 5% of the turnover, consolidated as necessary, of the director or the company with which he is affiliated; 5. must not have a close family relationship with one of the Company’s officers; 6. must not have been an auditor for the Group within the last five years; 7. must not have been one of SCOR’s Directors for a period exceeding twelve years (pursuant to the AFEP-
MEDEF Governance Code, loss of the status of independent director on the basis of this criterion occurs only upon expiry of the term of office during which the 12-year limit is reached); 8. must not represent a significant shareholder of the Company with the stipulation that: (i) a shareholder is deemed significant if he holds more than 5% of the shares or voting rights (calculation consolidating his various holdings).
(ii) below this threshold, the Board, based on a report of the Compensation and nomination Committee, systematically takes into account the structure of the Company’s capital and the existence of a potential conflict of interest when evaluating independence.
The Board of Directors, upon the recommendations of the Compensation and Nomination Committee, has especially studied the criterion relating to any significant business ties that directors might have with the company as a customer, supplier, investment or commercial banker. It has checked that none of the current directors have business activities with SCOR greater than the threshold indicated in the Board Internal Charter. Moreover, the three following directors are or are directly related to main shareholders of SCOR:  Malakoff Médéric Group (3,05 % of SCOR capital and 3,16 % of voting rights as of 31 December 2014) , represented by Guillaume Sarkozy
 Claude Tendil, Chairman of the Board of Directors of Generali France, Generali Group (2.14 % of SCOR capital and 2.21 % of voting rights as of 31 December 2014)
The Lead Independent Director is appointed amongst the independent Directors by the Board of Directors upon proposal by the Compensation and Nomination Committee. He assists the Chairman and CEO in his duties, in particular in organizing the Board and its Committees and ensuring they function properly, and in supervising corporate governance and internal control.
He is also in charge of assisting the Board concerning the good operation of the Company's corporate governance and advising the Board upon the operations on which the Board is convened to deliberate. He may include any subject he deems necessary to the agenda of the Board of Director’s meetings.
He advises the Directors when they suspect being in a conflict of interest.
 Rights and obligations of Directors Directors may receive training at their request on the specific nature of the Company, its business lines and its business sector. They agree to regularly attend meetings of the Board of Directors, committees of which they may be members, and general shareholders’ meetings. Lastly, they are obligated to express their opposition when they believe that a decision of the Board of Directors is likely to be harmful to the Company.
 Limitations and restrictions on trading SCOR securities The Board Internal Charter sets out the principal recommendations of the market authorities with regard to Directors trading the securities of their company.
(B) PREVENTION OF RISKS OF CONFLICT OF INTERESTS Each Director has a loyalty obligation to the Company. He or she shall not act in his or her own interest, against SCOR’s interests, and must avoid any situation with risks of conflict of interests.
(C) MEETINGS OF THE BOARD OF DIRECTORS During the course of the financial year 2014, the Company’s Board of Directors held 5 meetings on the following dates:  4 March 2014  6 May 2014 (2 meetings, one before the Annual General Meeting and the second after it)
 5 November 2014 The duration of these meetings was approximately 2 to 3 hours.
During its meeting in 2014, the main topics which were discussed were:  Approval of the quarterly, half-yearly, annual accounts
 Update on Group Corporate Finance  Approval of the regulatory reports (Solvency report, internal control report)