In 2016, the movements were due to the following operations: ●● the Board of Directors’ meeting held on April 27, 2016 decided to reduce the Group’s share capital by cancellation of 672,638 treasury shares for EUR 16 million (EUR 5 million in share capital and EUR 11 million in additional paid-in capital); ●● the issuance of new shares relates to the exercise of stock options for EUR 10 million (EUR 4 million in share capital and EUR 6 million in additional paid-in capital). This resulted in the creation of 554,112 new shares throughout the year.
The shares issued in 2017, 2016 and 2015 were issued at a par value of EUR 7.8769723 per share.
SCOR’s Ordinary and Extraordinary Shareholders’ Meeting of April 27, 2017 resolved to distribute, for the 2016 financial year, a dividend of one euro and sixty-five cents (EUR 1.65) per share, being an aggregate amount of dividend paid of EUR 308 million, calculated on the basis of the number of shares eligible for dividend as at the payment date. The ex-dividend date was May 2, 2017 and the dividend was paid on May 4, 2017.
The Groups’ capital management objectives are to: ●● match the profile of its assets and liabilities, taking into account the risks inherent to the business; ●● maintain strong credit ratings and healthy capital ratios in order to support its business objectives and maximize shareholder value; ●● ensure a high degree of capital fungibility; ●● retain financial flexibility by maintaining strong liquidity and access to a range of capital markets; ●● allocate capital efficiently and support the development of business by ensuring returns on capital employed meet the requirements of regulators and shareholders; and
In this regard, and in line with its Group’s strategic plan “Vision in Action” for the period from mid-2016 to mid-2019, the Group aims to achieve the following two specific targets: ●● a ROE > 800 basis points above the five-year risk-free rate over the cycle (1); ●● a solvency ratio (2) in the optimal range between 185% and 220%
On December 14, 2016, SCOR arranged a contingent capital facility with BNP Paribas taking the form of a contingent equity line, providing the group with EUR 300 million coverage in case of extreme natural catastrophes or life events impacting mortality. Under this arrangement, SCOR issued 9,599,022 warrants in favor of BNP Paribas; each warrant giving BNP Paribas the right to subscribe to two new SCOR shares. BNP Paribas has undertaken to exercise accordingly the number of warrants necessary for the subscription of up to EUR 300 million (issuing premium included) of new shares, without exceeding 10% of SCOR’s share capital, when the aggregate amount of (i) the estimated ultimate net losses resulting from eligible natural catastrophes incurred by the Group (in its capacity as an insurer/reinsurer) between January 1, 2017 and December 31, 2019 or (ii) the ultimate net claims amount recorded by SCOR Group Life segment (in its capacity as an insurer/ reinsurer) over two consecutive semesters over the period from July 1, 2016 and December 31, 2019 reaches certain contractual thresholds as reviewed by SCOR’s Statutory Auditors. In addition, subject to no drawdown having already been conducted under the facility, if SCOR’s daily volume-weighted average share price falls below EUR 10 an individual tranche of EUR 150 million will be drawn down out of the EUR 300 million facility.
BNP Paribas 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 BNP Paribas have entered into a profit sharing arrangement whereby 75% 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 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.
On July 27, 2017, SCOR announced its intention to buy-back own shares on the basis of robust underlying fundamentals and strong solvency. From that date, SCOR started buying back its own shares with an amount up to EUR 200 million over the next 24 months, subject to market conditions. SCOR intends to cancel all repurchased shares. The buy-back will be conducted within the framework approved by the Annual Shareholders’ Meeting held on April 27, 2017, which authorizes a share buy-back program capped at 10% of the Group’s share capital, and if necessary, in the event of renewal, of the authorizations expected to be given by the 2018 Annual Ordinary and Extraordinary Shareholders’ Meeting.
Insurance and reinsurance regulators are primarily interested in protecting the interests of policyholders. They ensure that the Group maintains an adequate solvency position to meet unforeseen liabilities arising from economic shocks or natural disasters.
This caption includes debt relating to the acquisition of real estate. At initial recognition, real estate financing is recorded at fair value less directly attributable transaction costs. After initial recognition, it is measured at amortized cost using the effective interest rate method.
SCOR has entered into a cross-currency swap which exchanges CHF 250 million of the principal for EUR and exchanges the CHF coupon on the notes for fixed-rate EUR 5.8975% and matures on November 30, 2018. See Note 7 – Insurance business investments (Derivative instruments).
The following table summarizes the amounts included in contingency provisions: In EUR million Reserves for post employment benefits Other reserves Total
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 US and Germany. Group employees in some countries receive additional pension benefits, 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.
The amounts paid under defined contribution plans were EUR 27 million, EUR 26 million, and EUR 23 million for the years ended December 31, 2017, 2016, and 2015 respectively.
Amortization of actuarial gains and losses through profit and loss for other long term benefits - - - - - - - - - - - -
Administration expenses recognized in pension expense 1 - - 1 1 - - 1 - - - -
(2) Actuarial (gains)/losses due to changes in assumptions include for 2017 actuarial (gains)/losses due to changes in financial assumptions for EUR (1) (EUR 35 million in 2016) and actuarial (gains)/losses due to change in demographic assumptions for EUR (3) million (EUR (7) million in 2016).
In EUR million Total 2017 Europe Switzerland North America Total 2016 Europe Switzerland North America Total 2015 Europe Switzerland North America
Fair value of assets as at January 1 238 28 148 62 243 29 137 77 209 27 111 71
NET DEFINED BENEFIT OBLIGATION AS AT DECEMBER 31 – DEFICIT 182 112 28 42 197 112 41 44 165 101 28 36
Funded or partially funded obligation as at December 31 362 94 174 94 371 90 181 100 354 89 158 107
Fair value of plan assets as at December 31 242 30 154 58 238 28 148 62 243 29 137 77
TOTAL FUNDED STATUS AS AT DECEMBER 31 – DEFICIT 182 112 28 42 197 112 41 44 165 101 28 36
The following table summarizes the movements in accrued (prepaid) balances recorded in the consolidated balance sheet as at December 31, 2017, 2016 and 2015: In EUR million Total 2017 Europe Switzerland
Accrued/(Prepaid) as at January 1 197 112 41 44 165 101 28 36 149 101 19 29
Accrued/(Prepaid) as at December 31 182 112 28 42 197 112 41 44 165 101 28 36
At December 31, 2017, other provisions (total of EUR 22 million) include EUR 6 million for provisions mainly covering contingent liabilities related to the Generali U.S. acquisition in 2013 (2016: EUR 50 million). The other provisions also include provisions related to litigations for EUR 13 million (2016: EUR 11 million).
The liability adequacy test for the Life segment compares the carrying amount of the reserves less deferred acquisition costs and value of business acquired with the fair value of the liabilities from the reinsurance portfolio recognized. Fair value is calculated as the present value of the projected future cash flows using current actuarial assumptions and inputs. In case of deficiency, SCOR would impair deferred acquisition costs and value of business acquired and increase reserves. The liability adequacy test is performed at the level of portfolios that are managed together and are subject to broadly similar risks.
Total gross insurance contract liabilities 14,163 14,588 28,751 14,468 14,045 28,513
Contract liabilities are subject to the use of estimates. Payments linked to these reserves are usually not fixed, neither by amount nor by due date. Liquidity information related to contract liabilities is included in the Registration Document, in Section 3.6 – Liquidity risks.
A significant portion of SCOR Global P&C’s reserves relates to liabilities payable in currencies other than the Euro. To permit an analysis of claims developments excluding the impact of foreign exchange movements, all figures are now translated into Euro at current balance sheet foreign exchange rates as of the date of these financial statements.
Gross UPR – end of year 1,108 1,099 1,135 1,384 1,516 1,683 1,663 1,938 2,239 2,261 2,270
Net UPR – end of year 1,069 1,059 1,095 1,333 1,432 1,590 1,562 1,796 2,052 2,094 2,110
Gross DAC – end of year 230 227 238 278 325 359 379 441 536 551 560
Ceded claims reserves & estimates – end of year (1) 598 467 473 412 765 690 629 619 634 660 1,175
Net claims reserves & estimates – end of year 8,727 8,660 8,683 9,284 9,837 10,167 10,062 10,469 11,116 11,124 11,143
Gross claims reserves and claims estimates as at January 1 11,784 11,750
Net claims reserves and claims estimates as at January 1 11,124 11,116
Revaluation of opening balance at current year end exchange rates (479) (248)
Net claims reserves and claims estimates as at January 1 – revalued 10,645 10,868
Net claims incurred relating to the current calendar year 2,234 1,960
Ceded claims reserves and claims estimates as at December 31 (1,175) (660)
GROSS CLAIMS RESERVES AND CLAIMS ESTIMATES AS AT DECEMBER 31 12,318 11,784
(1) Consists of a reduction of Incurred but not reported reserves for a net amount of Euro 123 million, following one of the Lloyds Syndicates Reinsurance To Close (RITC) on 2015 Year Of Account that occurred at the end of December 2017. Most of this movement was offset on the asset side by a movement on funds withheld.
Gross reserves, including IBNR reserves (in EUR million) 72 88 15 16
Actual number of claims notified under non-proportional and facultative treaties (in EUR million) 10,883 10,727 8,551 8,468
Average cost per claim (in EUR) (1) 19,976 21,750 4,762 4,756
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 December 31, 2017 and 2016 is as follows: In EUR million AAA AA A BBB < BBB Not rated Total as at
Share of retrocessionaires contract liabilities - 474 1,251 25 8 279 2,037
Share of retrocessionaires contract liabilities net of collateral (1) - 175 269 (2) 1 (356) (2) 87
The Group has established various free share allocation and stock option plans in favor of some of its employees and Corporate Executive Officers (the plans are equity settled only). The terms of these plans are defined, and approved or agreed by its Board of Directors at the grant date
The fair value of the services received in exchange for the grant of stock options is recognized as an expense. The total amount recognized over the vesting period is measured by reference to the fair value of options granted, excluding non market vesting conditions (ROE, for example). These conditions are taken into account when determining the expected number of vesting shares which will be acquired by the beneficiaries. At each closing date, the number of options that are expected to vest is reviewed and the impact of any adjustments to initial estimates is recognized in the income statement with a corresponding increase in equity.
The Group offers stock option plans to certain of its employees. The fair value of the services received in exchange for the granting of options is recognized as an expense. The total amount that is recognized over the vesting period is established by reference to the fair value of options granted, excluding conditions of attribution that are not linked to market conditions (return on equity (ROE), for example). These conditions are taken into account when determining the probable number of options which will vest for the beneficiaries. At each reporting date, the Group reviews the estimated number of options which will vest. Any impact is then recorded in the statement of income with the offsetting entry in shareholders’ equity over the remaining vesting period.
The Group also grants shares to certain of its employees. These grants are recorded in expenses over the vesting period with the offset recorded as an increase in shareholders’ equity.
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 during 2017, 2016 and 2015: December 1, 2017 Plan
Fair value at grant date (in EUR) 2.44 4.00 2.61 1.98 1.94 1.94
The terms and conditions of the performance share “LTIP” plan of February 21, 2017 provide that for all beneficiaries, the final vesting of these shares will be subject to the condition of presence of six years and to the satisfaction of performance conditions.
All shares granted under the “LTIP” plans of February 21, 2017 and are subject to performance conditions which are based on the strict observance of the principles set forth in the SCOR Code of Professional Conduct, on the solvency ratio and the SCOR Group’s ROE between 2017 and 2022.
Non-French residents 6 years 3 years 6 years 2 years 6 years
The current income tax expense is calculated on the basis of tax laws enacted or substantively enacted at the end of the reporting period in countries where the Group’s subsidiaries and branches operate and generate taxable income. Management periodically evaluates positions taken to prepare tax returns. Assessing the outcome of uncertain tax positions requires judgments to be made regarding the result of negotiations with, and enquiries from, tax authorities in a number of jurisdictions. Provisions for tax contingencies require management to make judgments and estimates in relation to tax issues and exposures. Amounts provided are based on management’s interpretation of country specific tax law and the likelihood of a settlement. Tax benefits are recognized to the extent that it is probable that they can be sustained. In arriving at this position, management reviews each material tax benefit to assess whether a provision should be taken against full recognition of the benefit on the basis of potential settlement through negotiation and/or litigation.
Deferred tax assets are recognized on net operating losses carried forward to the extent that it is probable that future taxable income will be available against which they can be offset. Management makes assumptions and estimates related to income projections to determine the availability of sufficient future taxable income. SCOR uses a discounted cash flow model comprising an earnings model, which considers forecasted earnings, and other financial ratios of legal entities based on Board-approved business plans, which incorporate key drivers of the underwriting result. Business plans include assessments of gross and net premium expectations, expected loss ratios and expected general expense ratios, together with actuarial assumptions. To the extent that net operating losses carried forward cannot be utilized or expire, deferred income tax expenses may be recorded in the future.
The main components of corporate income taxes for the years ended December 31, 2017, 2016 and 2015 are presented below: In EUR million 2017 2016 2015
Changes in deferred taxes due to changes in tax rates or tax law (57) (62) -
Income before corporate income tax (excluding share in results of associates) 342 766 873
For the year 2015 the temporary increase of the exceptional contribution on income tax (contribution exceptionnelle sur l’impôt sur les sociétés) led the effective French corporate income tax rate to 38.00%. In 2016, the exceptional contribution has expired and the global French corporate income tax rate is 34.43% again.
In 2017, the French Finance Bill for 2018 has enacted a new progressive decrease of the global corporate income tax rate from 34.43% to 25.83% by 2022. The global French corporate income tax rate will be respectively reduced to 32.02% for 2019, 28.92% for 2020, 27.37% for 2021 and 25.83% from 2022 onwards. The impact of this amendment mostly relates to the deferred tax assets (DTA) on French tax losses carried forward and net deferred tax liabilities (DTL) on temporary differences and is a loss of EUR 19 million for 2017 through profit and loss (decrease in the measurement of the net DTA).
An amending Finance Bill for 2017 has introduced two additional contributions to the French corporate income tax (CIT): a first contribution of 15% of the CIT amount for entities subject to CIT with revenue exceeding EUR 1 billion and an additional contribution of 15% of the CIT amount for entities subject to CIT with revenue exceeding EUR 3 billion. The additional contributions should finance part of the future refunds related to claims filed on the 3% distribution tax censored by the French Constitutional Council. As a consequence, the global CIT applicable to SCOR for 2017 fiscal year increases from 34.43% to 44.43% and the impact is a payment of EUR 0.3 million for fiscal year 2017.
On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted, reducing the statutory rate of US federal corporate income tax to 21% effective January 1, 2018. The TCJA also introduces a new minimum tax regime, referred to as the Base Erosion and Anti-Abuse Tax (BEAT) in the form of a 5% tax on all deductible payments to foreign related persons, and gross premiums specifically - starting in 2018 – with an increase of the tax rate up to 12.5% in 2026. BEAT is payable if, calculated on a modified taxable income base, it is higher than the regular federal corporate tax in a given year.
For the year ended December 31, 2017, the impact of this new legislation mostly relates to the DTA on US tax losses carry forward and is estimated to be a net loss of EUR 39.3 million through profit and loss and a net loss of EUR 4.9 million through Other Comprehensive Income. The BEAT has no impact on the financial statements as at and for the year ended December 31, 2017.
The difference between French and local tax rates reflects the geographical tax rate mix of the Group.
Remeasurements of post-employment benefits 12 (8) 4 (38) 8 (30) (7) 2 (5)
Items that will not be reclassified subsequently to profit and loss 12 (8) 4 (38) 8 (30) (7) 2 (5)
Revaluation of available-for-sale assets 66 (12) 54 (25) 12 (13) (112) 23 (89)
Net operating losses for carry forward 505 (81) - - (13) 411
As at December 31, 2017, the operating tax losses available for carryforward expire as follows: In EUR million Available tax loss carryforwards
The recognition of deferred tax assets for tax loss carryforwards is assessed based on the availability of sufficient future taxable income and local tax rules, e.g. unlimited carry forward in France and 20-year carryforward period in the United States. Under French tax law related to tax loss carryforwards, the utilization of tax losses is capped at EUR 1 million plus 50% of the remaining current year’s taxable result. Taxable income is forecast based on the main assumptions described in the accounting principles of this note. SCOR expects to utilize all recognized tax loss carryforwards before expiration.
Interest expense on funds withheld and contract deposit (10) (12) (12)
Other (including cash and cash equivalents), net of other investment expenses (43) 93 (215)
The second half of 2017 was marked for SCOR Global P&C by an exceptional series of large natural catastrophes, with hurricanes Harvey, Irma and Maria, earthquake in Mexico and fires in California. The in-force retrocession programs have responded as expected, with significant recoveries on proportional and non proportional covers.
Net income attributable to ordinary shareholders 286 186,532 1.53 603 185,022 3.26 642 185,668 3.46
Parties are considered to be related if one party has the ability to directly or indirectly control the other party or exercises significant influence over the other party in making financial or operational decisions.
There is no shareholder (except key management personnel) meeting the criteria of a related party according to IAS 24 for the years ended December 31, 2017, 2016 and 2015.
The total gross compensation of key management personnel, allocated or paid, which includes short-term employee benefits, post-employment benefits, other long-term benefits, termination benefits and share-based payments, for the years ended December 31, 2017, 2016, and 2015 is outlined below: Fixed cash compensation 6,061,319 5,974,813 5,856,849
In addition, SCOR pledges assets to the benefit of its consolidated subsidiaries as collateral for its internal retrocessions. As at December 2017, the amount of assets pledged internally is EUR 2,259 million (as at December 2016: EUR 2,338 million).
As security for the Group’s technical liabilities, various financial institutions have furnished sureties for our Company in the form of letters of credit. The total amount, not included in the table above, as at the reporting date was EUR 1,438 million (2016: EUR 1,503 million). In accordance with the terms of these letter of credit facilities, the Group must meet certain minimum requirements relating to net worth. The Group currently meets all such requirements.
Minimum payments under operating lease commitments, estimated future minimum rental income amounts as part of SCOR’s real estate investment activities and commitments to purchase or dispose real estate properties are not included in the table above but are disclosed within Note 9 – Miscellaneous assets and Note 7 – Insurance business investments.
The transaction, which was subject to the authorization of the ACPR and the relevant competition authorities received approval from all regulatory bodies.
SCOR has been a 33% shareholder and a major technical and commercial partner of MutRé since the company was created in 1998. As at December 31, 2017, MutRé continues to be included in the Group’s consolidated financial statements as an equity method investee. The carrying value of SCOR’s participation into MutRé amounts to EUR 45 million as at December 31, 2017 and MutRé’s contribution to the 2017 net income of the Group is EUR 2 million, including EUR 0.7 million of dividend received.
On July 18, 2017, SCOR Global P&C SE acquired the remaining 51% of M&S Brazil Participações Ltda (“M&S Brazil”), holding company of ESSOR (a direct insurance company in Brazil) held by La Mutuelle des Architectes Français Assurances (“MAF”) and the single share of Essor Seguros S.A. also held by MAF.
This transaction was subject to SUSEP’s (Brazilian regulatory body) prior and final approvals, respectively received on September 18, 2017 and on January 2, 2018, which led to the effective control of M&S Brazil by the Group.
Based on M&S Brazil’s financial statements as of October 31, 2017, the acquisition has no significant impact on the Group’s consolidated financial statements. At the end of October 2017, the total balance sheet value of M&S Brazil represents less than 0.04% of SCOR’s total balance sheet, and at the end of December 2017, the equity value of M&S Brazil represents approximatively 0.1% of the SCOR‘s shareholder’s equity.
SCOR Global Life Reinsurance Ireland dac 4th Floor, Whitaker Court – Whitaker Square – Sir John Rogerson's Quay –
See Section 4.6.20 – Notes to the consolidated financial statements, Note 20 – Other operating and administrative expenses for a breakdown of audit fees.
●● The report of the Statutory Auditors on the consolidated financial statements for the financial year ended December 31, 2015 published on pages 232 to 233 of the Registration Document filed with the AMF on March 4, 2015 under Number D.16-0108 (and from pages 220 to 221 of the free translation into English of such Registration Document, such translation being available on SCOR’s website www.scor.com).
We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2017 to the date of our report and specifically we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No 537/2014 or in the French Code of ethics (Code de déontologie) for auditors.
In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code (Code de commerce) relating to the justification of our assessments, we inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most significance in our audit of the financial statements of the current period, as well as how we addressed those risks.
In these circumstances, we considered the measurement of technical reserves related to reinsurance contracts as a key audit matter
(see Notes 1 and 4 of the Notes to the consolidated financial statements)
Gross written premiums in 2017 amount respectively to EUR 8,764 million for the Life segment SCOR Global Life and EUR 6,025 million for the Non-Life segment SCOR Global P&C, as stated in Note 4 of the notes the consolidated financial statements.
The Group’s intangible assets are mainly composed of goodwill and Value of Business Acquired of Life reinsurance portfolios respectively for EUR 859 million and EUR 1,412 million as at December 31, 2017.
Goodwill represents the future economic benefits arising from assets acquired in a business combination that are not individually identified and separately recognized. It is initially measured at cost which is calculated as the difference between the business combination cost and the net fair value of identifiable assets and assumed liabilities at the acquisition date. Their fair value depends on forecasts and budgets established by the management.
As part of the yearly impairment testing on goodwill, the Group assesses whether the recoverable amount of cash generating units (CGU) to which the goodwill is allocated, is at least equal to their total carrying value, as stated in Note 5 of the notes to the Consolidated financial statements. If it is determined that an impairment exists, the total carrying amount is adjusted to the recoverable value.
Estimates performed to determine the recoverable value of the Group, CGUs are based on assumptions and extrapolations involving a significant part of judgement. Furthermore, any negative deviation of expected future results could have an impact on the recoverable value and lead to an impairment of the goodwill.
With the support of our Life Actuarial Specialists, we have completed the following procedures: ●● we assessed the proper application of internal procedures on the evaluation of VoBAs, as well as their depreciation schedules; ●● in order to analyze the valuation of VoBAs and their correct amortization, we examined the expected cash flows on the relevant portfolios; ●● we assessed the recoverability of the VoBAs taking into consideration the liability adequacy test.
Deferred tax assets on tax losses carried forward An asset of EUR 411 million related to tax losses carried forward is recognized in the balance sheet of the Group at financial year ended 2017. Deferred tax assets are recognized on net operating losses carried forward to the extent that it is probable that future taxable income will be available against which they can be offset. As stated in Note 17 of the notes to consolidated financial statements, management makes assumptions and estimates related to income projections to determine the availability of sufficient future taxable income. To the extent that net operating losses carried forward could not be utilized or would expire, deferred income tax expenses may be recorded in the future to reduce corresponding deferred tax assets. We consider deferred assets on losses carried forward to be a key audit matter, given the Management’s judgement related to their recognition in the balance sheet.
Impacts of the US Tax reform As stated in Note 17 of the notes to consolidated financial statements, on December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted, reducing the statutory rate of US federal corporate income tax to 21% effective January 1, 2018. The TCJA also introduces a new minimum tax regime in the form of a 5% tax on all deductible payments to foreign related persons (the “Base Erosion and Anti-Abuse Tax” or “BEAT”), and gross premiums specifically – starting in 2018 – with an increase of the tax rate up to 12.5% in 2026. For the year ended December 31, 2017, the impact of this new legislation mostly relates to the remeasurement of deferred tax assets on US tax losses carried forward. Given the potential future implications of the TCJA on SCOR business structure, we consider the assessment of the impacts of the US tax reform to be a key audit matter.
We were appointed as auditors of SCOR SE by the Annual General Meeting held on June 22, 1990 for MAZARS and on May 13, 1996 for ERNST & YOUNG Audit.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIAL STATEMENTS
As specified in Article L. 823-10-1 of the French Commercial Code (Code de commerce), our audit does not include assurance on the viability of the Company or the quality of management of the affairs of the Company.
As part of an audit conducted in accordance with professional standards applicable in France, the auditor exercises professional judgment throughout the audit and furthermore: ●● Identifies and assesses the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient and appropriate to provide a basis for the audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
●● Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of the audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the consolidated financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein.
●● Collects information related to persons and entities included in the scope of consolidation that it deems sufficient and appropriate to express an opinion on the consolidated financial statements. The auditor is responsible for the management, supervision and execution of the audit of the consolidated financial statements as well as the opinion expressed on these accounts.
The related party agreements executed in 2017 or continued during 2017, as defined by Articles L. 225-38 et seq of the French Commercial Code are the subject of a specific report by the Statutory Auditors in Section 2.3.3.
SCOR SE’s corporate accounts for the financial years ended December 31, 2017, 2016 and 2015, included respectively in Appendix C of this Registration Document, in Appendix C of the Registration Document filed with the AMF on March 3, 2017 under the number D.17-0123 and in Appendix C of the Registration Document filed with the AMF on March 4, 2016 under the number D.160108, were the subject of reports by the Statutory Auditors, featured respectively in Appendix C of this Registration Document, in Appendix C of the Registration Document filed with the AMF on March 3, 2017 under the number D.17-0123 and in Appendix C of the Registration Document filed with the AMF on March 4, 2016 under the number D.16-0108.
5.1. CHARTER AND BYLAWS 242 5.1.1. Corporate purpose of the issuer (Article 3 of the bylaws) 242 5.1.2. Summary of the bylaws and internal regulations of the Company concerning the members of its administrative, management and supervisory bodies 242 5.1.3. Rights, privileges and restrictions attached to existing shares 243 5.1.4. Actions required to modify shareholders’ rights 244 5.1.5. Conditions for calling Annual Shareholders’ Meetings and Extraordinary Shareholders’ Meetings (Articles 8 and 19 of the bylaws) 246 5.1.6. Provisions that could delay, defer or prevent a change in control or in the shareholder structure 246 5.1.7. Disclosure thresholds 247 5.1.8. Conditions governing modifications to the share capital (other than legal provisions) 247 5.2. DESCRIPTION OF SCOR’S SHARE CAPITAL 248 5.3. THIRD-PARTY INFORMATION AND STATEMENTS BY EXPERTS AND DECLARATIONS OF ANY INTEREST 250 5.3.1. Expert’s report 250 5.3.2. Information from third parties 250 5.4. PUBLISHED INFORMATION 250 5.5. MATERIAL CONTRACTS 250
Pursuant to Article 13 of the Company’s bylaws, the directors receive attendance fees, the maximum aggregate amount of which, determined by the shareholders acting at an annual Ordinary Shareholders’ Meeting, remains in effect until a new decision is made.
The Company may also acquire its own shares without having to cancel them: ●● redemption with the aim of allocating them to employees or Company officers (Article L. 225-208 of the French Commercial Code); ●● redemption as part of a share buyback program (Article L. 225-209 of the French Commercial Code).
Under current French regulations, and in particular Article L. 225-132 of the French Commercial Code, any cash capital increase gives shareholders a pre-emptive right to subscribe to new shares proportionate to the amount of shares owned.
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 tranches of said increase and may or may 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 Monetary and Financial Code without pre-emptive subscription rights, the issue price must be set according to Article L. 225-136 of the French Commercial Code.
Subject to legal provisions concerning shareholders’ voting rights in General Meetings and their right to information, shares are not divisible with regard to the Company. This means that joint co-owners must be represented by one of said co-owners or by a single agent, appointed by the Court in the event of a dispute.
Ordinary Shareholders’ Meetings are required for matters such as the election, replacement and removal of directors, the appointment of Statutory Auditors, the approval of the annual report prepared by the Board of Directors and of the annual accounts and the distribution of dividends. The Board of Directors is required to convene an annual Ordinary Shareholders’ Meeting, which must be held within six months of the end of the financial year. This period may be extended by an order of the President of the competent French Commercial Court. The Company’s financial year begins on the first day of January of each calendar year and ends on the last day of December of that year.
The court may be requested to appoint an agent either by shareholder(s) holding at least 5% of the share capital, or a duly authorized association of shareholders holding their ordinary shares in registered form for at least two years and jointly owning a certain percentage of voting rights (computed on the basis of a formula related to capitalization which on the basis of the Company’s outstanding share capital as at December 31, 2017, would represent approximately 1% of voting rights) or by any interested party, including the Works’ Council in urgent situations.
At least 15 days before the date set for any Shareholders’ 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 said ordinary shares in registered form for at least one month prior to the notice date.
One or several shareholder(s), together holding a certain percentage of SCOR’s voting rights (computed on the basis of a formula related to capitalization which, on the basis of outstanding share capital as at December 31, 2017, would represent approximately 0.5% of voting rights), the Works’ Council or a duly authorized association of shareholders holding ordinary shares in registered form for at least two years and holding together a certain percentage of the voting rights (calculated on the basis of a formula relating to capitalization which on the basis of the outstanding share capital as at December 31, 2017, would represent approximately 1% of SCOR SE’s voting rights) may, within 10 days of such publication, propose resolutions to be submitted for approval by the shareholders at the Shareholders’ Meeting.
ADDITIONAL INFORMATION05 Charter and bylaws of the votes validly cast. Abstentions by those present in person or by correspondence or represented by proxy is not deemed as a vote against the resolution submitted to a vote.
5.1.5. CONDITIONS FOR CALLING ANNUAL SHAREHOLDERS’ MEETINGS AND EXTRAORDINARY SHAREHOLDERS’ MEETINGS (ARTICLES 8 AND 19 OF THE BYLAWS)
All shareholders may attend the meetings, in person or through an agent, with proof of identity and share ownership, either in the form of registration in his/her name or a certificate from an authorized intermediary designated as account holder.
Pursuant to Articles L. 322-4 and R. 322-11-1 of the French Insurance Code, any transaction allowing a person acting alone or in concert with other persons, as defined by Article L. 233-10 of the French Commercial Code, to acquire, increase, decrease or cease holding, directly or indirectly an equity stake in an insurance or reinsurance company, shall be notified by such person(s) to the ACPR prior to its completion when any one of the three following conditions is met: ●● the portion of voting rights or capital shares held by said person(s) exceeds or falls below the tenth, fifth, third or half thresholds; ●● the Company becomes or ceases to be a subsidiary of said person(s); ●● the transaction enables this or these persons to exercise a significant influence on the management of this company.
5.1.8. CONDITIONS GOVERNING MODIFICATIONS TO THE SHARE CAPITAL (OTHER THAN LEGAL PROVISIONS)
ADDITIONAL INFORMATION05 Third-party information and statements by experts and declarations of any interest 5.3. THIRD-PARTY INFORMATION AND STATEMENTS BY EXPERTS AND DECLARATIONS OF ANY INTEREST
APPENDIX C: UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SE 264 1. Significant events of the year 264 2. Balance sheet 266 3. Income statement 268 4. Off-balance sheet commitments 271 5. Notes to the corporate financial statements 272 6. Certification of audit of historical financial information 295
The structure of this Section is based on these components corresponding to the framework implemented by SCOR: ●● components 1 and 2 are addressed in the “Internal environment” and “Setting of objectives” sections; ●● components 3, 4 and 5 are described in the section “Identification and assessment of risks”; ●● components 6, 7, and 8 are respectively addressed in the “Principal activities and participants of risk control”, “Information and communication”, and “Monitoring of the risk management and internal control system” sections; ●● the elements concerning accounting and financial reporting are separate and are presented in the last section.
INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES AInternal environment 1. INTERNAL ENVIRONMENT
Within this environment, control responsibilities are exercised as follows: ●● SCOR SE’s Board of Directors relies on several dedicated committees, including, but not limited to, the Audit Committee and the Risk Committee to exercise its control responsibility over the objectives it has set for the Company. These two committees are both chaired by independent directors; ●● SCOR SE’s Board of Directors, following a recommendation made by the Compensation and Nomination Committee, decided that several independent directors of SCOR SE should be members of the Boards of some of the main subsidiaries in various countries with a view to enhancing the Group’s oversight of local operations; ●● the Group’s Executive Committee is chaired by the Chairman and Chief Executive Officer of SCOR SE and meets on a weekly basis. The Executive Committee defines the procedures for implementing the strategy approved by SCOR SE’s Board of Directors in line with the principles set out in Group policies, approved by the Board of Directors, for its main areas of activity (e.g. investment, finance, risk management) and for certain topics, such as the underwriting plan and the allocation and management of resources. The Executive Committee also supervises the functioning of the Group and the Hubs by monitoring, on a quarterly basis, the bodies contributing to the sound administration of the Group. In addition to the Chairman and Chief Executive Officer, the Executive Committee is currently made up of: – the Group Chief Financial Officer (CFO), – the Group Chief Risk Officer (CRO), – the Group Chief Operating Officer (COO), – the SCOR Global P&C Chief Executive Officer (CEO) and his deputy,
– the SCOR Global Life Chief Executive Officer (CEO) and his deputy,
– the SCOR Global Investments Chief Executive Officer (CEO); ●● the Group Risk Committee meets quarterly and is comprised of the members of the Group Executive Committee. Other risk management and control functions of the divisions and the Head of Group Internal Audit are regularly invited to the meetings. The main missions of the Group Risk Committee are to steer the Group’s risk profile, maintain an effective ERM Framework and spread an appropriate Risk Culture throughout the Group; ●● monitoring of the internal control procedures falls under the remit of the Group’s Executive Management. The Group departments and functional or transversal departments of SCOR Global P&C, SCOR Global Life and SCOR Global Investments with a control responsibility have the task of defining and controlling the implementation of rules pertaining to the areas of their responsibility and applicable to all of the Group’s entities. These rules, and the participants, are described in detail in the paragraph 1.3 of this report on control activities; ●● the three divisions as well as the Hubs’ support departments must apply the rules defined above. They carry out all of the first-level controls related to business management and ensure compliance with regulatory, accounting and fiscal laws, at both local and Group levels; ●● the Head of Group Internal Audit reports directly to the Chairman and Chief Executive Officer of SCOR SE and functionally to the Chairman of the Audit Committee of the Board of Directors of SCOR SE. This positioning gives the Head of Group Internal Audit the necessary independence and objectivity, and allows for the largest possible room for investigation. Group Internal Audit checks independently the effectiveness and relevance of the governance, risk management and internal control procedures for the Group’s entities following a methodical risk based approach, as promoted by the “International Standards for the Professional Practice of Internal Auditing” set out by the Institute of Internal Auditors and the Institute’s Code of Ethics. The Internal Audit Charter, approved by the Audit Committee, defines the position within the organization, the role and areas of activity, the principles and main operating procedures of Group Internal Audit.
INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES ASetting of objectives 1.2. GROUP STANDARDS AND PRACTICES
Group business standards and practices are governed by Group policies and underlying guidelines established in a common format, by the three divisions (SCOR Global P&C, SCOR Global Life, SCOR Global Investments) and the central functions such as Group Internal Audit and the functions managed by the Group Chief Financial Officer, the Group Chief Operating Officer and the Group Chief Risk Officer respectively. Group policies are approved by the Group Executive Committee and for certain topics are submitted regularly to the relevant committees of the Board and, ultimately, to the Board of Directors of the Company. These Group policies are not intended to enumerate all the rules governing SCOR’s activities in the different countries in which the Group operates, but rather to establish certain principles intended to ensure that SCOR Group companies and employees share a common understanding of the Group’s standards and that they work in compliance with these standards. When approved, these documents are all made available to employees on the SCOR intranet on a dedicated page.
In 2017, several Group policies were reviewed for accuracy, completeness and reliability.
The Executive Committee defines the procedures for implementing the strategy and ensures the consistency of the operational plans or policies (e.g. underwriting, finance, retrocession, information technology) with the strategic plan. The Executive Committee also ensures that there is an optimal risk-based allocation of capital and diversification. Under the responsibility of the Group Chief Risk Officer, the Capital Shield Strategy sets risk limits to ensure a protection of the Group’s capital in line with the strategic plan’s objectives. The Capital Shield Strategy is approved and monitored by the Group Risk Committee and the Board Risk Committee.
(1) Based on a 5-year rolling average of 5-year risk-free rates.
INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURESA Identification and assessment of risks 3. IDENTIFICATION AND ASSESSMENT OF RISKS
Where relevant, the analyses from these processes are reported to the Group Risk Committee and to the Risk Committee of SCOR SE’s Board of Directors (the “Board Risk Committee”) and to the Board of Directors on a regular basis.
INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES AMain control activities 4. MAIN CONTROL ACTIVITIES
This section summarizes the principal activities and participants of risk control for the following important areas: ●● group functions; ●● activities related to reinsurance; ●● asset management; ●● accounting management.
●● The General Secretariat contributes to the management of the following functions: – legal and functional governance of the Group, – compliance, with the Group Chief Compliance Officer reporting to the General Secretariat (special attention is given to anti-trust/competition law, anti-money laundering and terrorism financing, sanctions and embargoes, anti-bribery, anti-fraud, data protection and privacy, insider trading and conflicts of interest),
– management of the regulatory supervision of the Group and coordination at legal entity level with the relevant legal departments,
●● The Group Project Office monitors the Group project portfolio and defines standard project management methodology. It regularly provides reports to the management detailing key indicators and recommendations on the project portfolio for effective management. On the Executive Committee’s request, it can also manage strategic projects.
●● The Prudential & Regulatory Affairs Department advises the Group on prudential regulations. It ensures the Group actively positions itself in relation to the different jurisdictions and requirements to which it is exposed, or could be exposed and continuously develops and promotes SCOR’s leading risk management expertise through regular dialogue with internal and external stakeholders, including our staff, clients, supervisors, the (re)insurance industry, academia and the public. Prudential and Regulatory Affairs also provides specialist expertise to SCOR colleagues via the Solvency II Centre of Excellence and prepares the Group for the adoption of major new prudential regulations.
●● The Financial Analysis and Risk Modeling Department manages and operates SCOR’s Internal Model and provides a detailed quantitative analysis on the modelled range of changes in economic value. It provides reports to management on risk assessment and actively assists the Company in its various uses of the Internal Model.
●● creates value for its shareholders in line with the objectives set out in the strategic plan.
As a general rule, and in compliance with local regulations, legal entities of SCOR appoint the Group to supervise and implement the investment and reinvestment of all of their invested assets. This relationship is put in place through an Investment Management Agreement (“IMA”) which includes local investment guidelines.
Financial communication: The establishment and centralization of all financial information – particularly press releases, intended for the market, investors, financial analysts, and the press – are the responsibility of the Corporate Communications Department and the Investor Relations Department, according to a formalized process. Financial information intended for rating agencies is the responsibility of the Rating Agencies Department. All of this information is ultimately controlled by General Management.
The monitoring of the internal control and risk management systems is ensured by a number of complementary mechanisms with the support of several departments across the Group.
The approach used to develop and maintain the internal control system is specified in the ICS Group Policy. The policy sets out the reference framework and details the Group principles, the responsibilities of the different participants in internal control and the quality requirements. The principal characteristics of the internal control system are as follows: ●● a risk-based approach, i.e. addressing critical operational risks that, if not controlled, could significantly impact SCOR’s franchise, balance sheet or statement of income and indirectly its solvency. The optimal risk response is obtained through appropriately designed key controls at Group level, process level and IT level; ●● on a process level, appointment of global process owners (GPO) at Group, SCOR Global P&C, SCOR Global Life and SCOR Global Investments levels and local process owners (LPO). The GPOs’ responsibility is to document the processes, identify the related critical risks, define the appropriate key controls and to ensure their deployment and application in the various entities of the Group. The LPOs’ main responsibilities are to assess processes, risks and key controls on a local level based on the defined global process and to ensure application of risk based control activities; ●● monitoring, upon completion of the initial documentation, through a self-assessment procedure on the maturity (quality) of control processes based on pre-defined criteria by their owners.
Group Internal Audit develops a multi-year internal audit plan (revised at least annually) in a risk-based manner, taking the organization’s risk management framework and including risk appetite levels set by management for the different activities, or parts of the organization, into account. The expectations of senior management and the Audit Committee are considered in this process. Once reviewed and approved by the Audit Committee, it is communicated internally and summaries are published on the SCOR intranet.
The recognition and measurement of underwriting reserves (in particular mathematical reserves) and related intangible assets and related deferred acquisition costs are largely based on contractual and settlement data and subject to the following controls: ●● the reinsurance treaties are either reviewed individually or are pooled within an affiliation treaty based on certain criteria defined in advance; ●● the treaties are then subject to reserving estimates, which are reviewed at each quarterly closing either by the actuaries or at meetings attended by underwriters, technical assistants and actuaries.
Monitoring of financial assets and cash flows is provided through various operating methods. The information systems used provide an audit trail of the transactions carried out. In certain entities, accounting activities are delegated to external service providers; controls implemented by these entities make it possible to verify the proper recording of accounting data and consistency of the figures. “Cash” reconciliations are made on a daily basis, for the most part, and security transactions are reconciled the following day (D+1) with reports from the various custodians. Portfolios managed directly are monitored in real time.
SCOR believes that its risk management and internal control systems are appropriate and adapted to its activities and is engaged in an ongoing process to improve its internal control standards and their implementation. In 2017, the Group continued its efforts on compliance issues as briefly summarized in this Section by releasing new Group policies, and by improving existing policies to align them with the Group’s developments.
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 December 31, 2016 and the Statutory Auditors’ report pertaining thereto published on pages 249 to 276 and 277 to 278, respectively, of the Registration Document filed with the AMF on March 3, 2017 under number D.17-0123 and from pages 249 to 276 and from pages 277 to 278, respectively, of the free translation into English of the Registration Document filed with the AMF with such translation being available on SCOR’s website www.scor.com; (ii) the corporate financial statements for the year ended December 31, 2015 and the Statutory Auditors’ report pertaining thereto published on pages 262 to 291 and 292 to 293, respectively, of the Registration Document filed with the AMF on March 4, 2016 under number D.16-0108 and from pages 249 to 278 and from pages 279 to 280, respectively, of the free translation into English of the Registration Document filed with the AMF with such translation being available on SCOR’s website www.scor.com.
During 2017, SCOR SE received EUR 81 million in dividends from its affiliates.
In 2016, SCOR SE obtained R3 authorization from the Insurance Regulatory and Development Authority of India (IRDAI) allowing the Group to open a composite branch in India to conduct Life and P&C reinsurance business.
On December 14, 2016, SCOR SE launched a new 3-year contingent capital facility with BNP Paribas SA for EUR 300 million and issued 9,599,022 warrants in favor of BNP Paribas SA. This equity line facility has replaced, as of January 1, 2017, the previous contingent capital facility which came to an end on December 31, 2016.
On July 27, 2017, SCOR SE launched a share buy-back program with an amount up to EUR 200 million over the following 24 months, capped at 10% of the Group’s share capital with an intention to cancel all repurchased shares.
The second semester of 2017 was marked by an exceptional series of large natural catastrophes, with hurricanes Harvey, Irma and Maria, earthquakes in Mexico and fires in California. The in-force retrocession programs have responded as expected, with significant recoveries on proportional and non-proportional covers.
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SEC Balance sheet 2. BALANCE SHEET
Share of retrocessionaires in underwriting reserves 5.2.9 704 - 704 616
Accrued income and deferred expenses 5.2.8 & 5.2.9 214 - 214 251
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SEC Income statement 3. INCOME STATEMENT
Expenses for Life reinsurance and other underwriting reserves 30 5 35 39
Internal and external investment management expenses and interest expenses (1) - (1) (10)
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SE COff-balance sheet commitments 4. OFF-BALANCE SHEET COMMITMENTS
Other commitments on investment securities, assets or revenues 10 471 481 474
Various financial institutions provide sureties for SCOR SE in the form of letters of credit to collateralize SCOR SE’s technical liabilities. The total amount that benefits to cedents, not included in the table above, is EUR 4 million as at December 31, 2017 (EUR 4 million in 2016).
The corporate financial statements for the year ended December 31, 2017 are presented in accordance with the accounting provisions grouped under title IV of book III of the Insurance Code and with the French standard-setter (Autorité des Normes Comptables – ANC) regulation No. 2015-11 of November 26, 2015 approved by the Order of December 28, 2015, relative to the annual accounts of insurance undertakings, as amended by the ANC regulation No. 2016-12 of December 12, 2016. In the absence of specific provisions in the aforementioned ANC regulation No. 2015-11, the provisions of ANC regulation No. 2014-03 relating to the general accounting plan (Plan Comptable Général – PCG) are applicable.
For active reinsurance companies, the fair value is the revaluated net assets, value including the value of Life reinsurance portfolio and the forecasts of future profits in Non-Life reinsurance, net of taxes.
When the realizable value is more than 20% lower than the initial cost for more than six consecutive months, a detailed line-by-line analysis is performed to determine whether the impairment is permanent. An impairment allowance is recorded on a line-by-line basis for securities which are considered permanently impaired.
Within the framework of reinsurance treaties, the ceding companies can request cash deposits to guarantee the technical provisions ceded to the reinsurer. The receivables representing those cash deposits are recorded in the item “Cash deposited with ceding companies” on the asset side of the balance sheet or in the item “Investments in associates” if the ceding company is an associate company, according to the Reinsurance accounting plan (Plan Comptable Assurance).
An allowance for bad debts relating to accounts receivable from reinsurance transactions and other receivables is recorded to the extent that recoverability is uncertain.
SCOR applies the 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 No. 2002-09 dated December 12, 2002.
The foreign currency differences on off-balance sheet positions (forward financial instruments) and the related accounts represent unrealized foreign currency gains or losses. These differences are recorded in the balance sheet in the accounts “Net translation adjustments” and “Regularization of forward financial instruments”, based on the underlying strategy.
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SEC Notes to the corporate financial statements 5.1.11. PRINCIPLES RELATING TO THE PRESENTATION OF THE FINANCIAL STATEMENTS
In the corporate income statement of SCOR SE under French GAAP, the Non-Life segment encompasses personal accident/sickness reinsurance in accordance with Article 410-1 and followings of regulation No. 2015-11 dated November 26, 2015 of the French standard-setter (Autorité des Normes Comptables – ANC). Personal accident/sickness reinsurance is classified in the Life segment in the consolidated financial statements under IFRS.
Cash deposited with ceding companies (related and associated companies) 1,717 (19) 63 - 1,761
On March 6, 2017, SCOR SE has reduced its share in ASEFA from 19.97% to 9.97% and holds an option to sell the remaining share to the buyer.
●● The cash advance to SCOR GIE Informatique increased by EUR 77 million and was partly reimbursed for EUR 60 million.
●● On July 1, 2017, SCOR SE granted a SGD 8 million loan (EUR 5 million) to SCOR Services Asia Pacific Pte.
Unrealized gains and losses 1 − Real estate investments and real estate investments in process 309 308 463 155 2 − Shares and other variable-income securities (other than mutual fund units) 3,921 3,917 9,355 5,438 3 − Mutual funds units (other than those in 4) 3 3 3 4 − Mutual fund units exclusively invested in fixed-income securities 61 61 61 5 − Bonds and other fixed-income securities 830 830 822 (8)
●● investments valued according to Article R. 343-10 8,288 8,283 13,876 5,593
●● investments and forward instruments issued in OECD countries 8,270 8,265 13,871 5,606
●● investments and forward instruments issued in non-OECD countries 868 868 848 (20)
●● SCOR GLOBAL LIFE SE 5 avenue Kléber, 75116 Paris, France EUR 287 690 99.99% 471 471 732 64 5,211 3,978 87 -
●● SCOR GLOBAL P&C SE 5 avenue Kléber, 75116 Paris, France EUR 582 1,778 99.99% 1,615 1,615 469 271 4,086 2,894 176 -
●● SCOR Holding (Switzerland) AG General Guisan-Quai 26, 8022 Zurich, Switzerland EUR 382 1,429 20.68% 399 399 107 - - - 111 27
(1) Data based on 2017 IFRS accounts. (2) SCOR guarantees with limits as to the 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 SCOR SE’s payment obligations under all insurance, reinsurance and financial contracts entered into by SCOR SE.
As of December 31, 2017, loans and advances granted by SCOR SE to its subsidiaries amounted to EUR 1,801 million, breaking down as follows: ●● EUR 732 million with SCOR Global Life SE; ●● EUR 469 million with SCOR Global P&C SE; ●● USD 250 million (EUR 210 million) with SCOR Reinsurance Company; ●● EUR 162 million with SCOR GIE Informatique; ●● CHF 125 million (EUR 107 million) with SCOR Holding Switzerland AG; ●● EUR 40 million with SCOR Auber SAS; ●● USD 40 million (EUR 34 million) with SCOR Reinsurance AsiaPacific Pte LTD; ●● EUR 22 million with MRM; ●● EUR 12 million with SCOR Capital Partners SAS; ●● EUR 7 million with SCOR Properties; ●● SGD 8 million (EUR 5 million) with SCOR Services Asia-Pacific Pte LTD; ●● USD 1 million (EUR 1 million) with GIE Colombus.
The breakdown of the EUR 2,211 million balance as of December 31, 2016 was as follows: ●● EUR 832 million with SCOR Global Life SE; ●● EUR 701 million with SCOR Global P&C SE; ●● USD 250 million (EUR 233 million) with SCOR Reinsurance Company; ●● EUR 145 million with SCOR GIE Informatique; ●● EUR 115 million with SCOR Holding Switzerland AG; ●● EUR 88 million with SCOR Auber SAS; ●● EUR 51 million with SCOR Reinsurance Asia-Pacific Pte LTD; ●● EUR 22 million with MRM; ●● EUR 15 million with SCOR Properties; ●● EUR 9 million with SCOR Capital Partners SAS.
●● SCOR PERESTRAKHOVANIYE.O.O.O. 10 Nikolskaya Street, 109012, Moscou, Russian Federation RUB 800 794 100.00% 21 21 - 5 8 1,867 102 -
As at December 31, 2017, the number of shares held as treasury shares amounted to 5,866,249 shares (3.03% of capital) for a total value of EUR 179,215,496. These shares were acquired in the context of anticipated awards to Company employees and corporate officers as part of share allocation plans and under its share buy-back program launched in July 2017.
The share capital comprising 193,500,317 shares with a par value per share of EUR 7.8769723 amounted to EUR 1,524,196,637 as at December 31, 2017.
●● The issuance of shares relating to the exercise of options until December 31, 2017 for a total of EUR 26.9 million was allocated to the share capital of the Company for EUR 12 million and to additional paid-in capital for EUR 14.9 million. The exercise of options resulted in the creation of 1,519,860 shares.
In EUR million Net book value Fair value Net book value Fair value
The balance includes EUR 38 million of accrued interest (as at December 31, 2016: EUR 39 million).
●● On December 7, 2015, SCOR issued EUR 600 million in dated subordinated notes, redeemable at interest payment dates from June 8, 2026. The coupon has been set at 3.00% (until June 8, 2026), and will be reset every 10 years at the prevailing 10-year EUR mid-swap rate +3.25%.
●● Debt of a branch for EUR 16 million (EUR 16 million as of December 31, 2016).
– EUR 7,3 million with SCOR Investment Partners SE; – EUR 3.4 million with SGF SAS; – EUR 0.3 million with SCOR Global Life SE.
The maturity of assets and liabilities at December 31, 2017 is as follows: In EUR million Total Less than 1 year 1 to 5 years More than 5 years Total
Receivables on related companies and other affiliates 159 159 - - 230
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SE CNotes to the corporate financial statements 5.2.7. GROSS UNDERWRITING RESERVES
Due and accrued interests on rental income 32 31 - -
The breakdown of the reinsurance estimates – assumed is as follows as at December 31, 2017: ●● reinsurance estimates – assumed – Life (EUR (41) million) includes premiums for EUR 482 million, commissions payable of EUR (93) million and claims payable amounting to EUR (446) million, and EUR 16 million of accrued interest on the cash deposit; ●● reinsurance estimates – assumed – Non-Life (EUR 631 million) includes premiums for EUR 1,469 million, commissions payable of EUR (452) million and claims payable for EUR (412) million and EUR 26 million of accrued interest on the cash deposit.
Accounts receivable from reinsurance transactions 356 - 287 643 533 - 192 725
Deferred acquisition costs assumed (Non-Life) 51 - 93 144 51 - 93 144
Liabilities arising from reinsurance operations 338 - 1 339 147 - - 147
Deferred commissions received from reinsurers (Non-Life) 71 - - 71 75 - - 75
In EUR million Related companies Other affiliates Other Total Related companies Other affiliates Other Total 5.2.10. ASSETS – LIABILITIES BY CURRENCY
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, from SCOR Switzerland AG, and from SCOR Global Life Reinsurance Ireland as well as the Chinese and Indian branches’ activity.
The non-recurring loss amounted to EUR (1.2) million mainly due to the following items: ●● French tax depreciation on acquisition costs of EUR (0.7) million; ●● impairment of EUR (0.5) million; ●● accrued payables of EUR (0.2) million; ●● reversal of old rent deposits of EUR 0.2 million.
The Group in France is consolidated for tax purposes and is composed of SCOR SE as the parent company of the Group, SCOR Global P&C SE, SCOR Global Life SE, SCOR Investment Partners SE, SGF SAS, SCOR Auber SAS, SCOR Capital Partners SAS, SAS DB Caravelle, ReMark France SAS and Rehalto SA as subsidiaries. Under the tax agreement, SCOR SE benefits from the tax loss carry-forwards of its subsidiaries, and tax benefits are transferred back to the individual subsidiary concerned in the case of future profits.
In 2017, 1,519,860 options were exercised: 386,702 options exercised under the stock option plan of September 13, 2007 vested on September 13, 2011, 176,000 options exercised under the stock option plan of May 22, 2008 vested on May 22, 2012, 106,960 options exercised under the stock option plan of September 10, 2008 vested on September 10, 2012, 226,300 options exercised under the Stock option of March 23, 2009 vested on March 23, 2013, 4,000 options exercised under the stock option plan of November 25, 2009 vested on November 25, 2013, 187,898 options exercised under the stock option plan of March 18, 2010 vested on March 19, 2014, 500 options exercised under the stock option plan of October 12, 2010 vested on October 13, 2014, 131,000 options exercised under the stock option plan of March 22, 2011 vested on March 23, 2015, 47,000 options exercised under the stock option plan of September 1, 2011 vested on September 2, 2015, 135,500 options exercised under the stock option plan of March 23, 2012 vested on March 24, 2016, 98,000 options exercised under the stock option plan of March 21, 2013 vested on March 22, 2017 and 20,000 options exercised under the stock option plan of October 2, 2013 vested on October 3, 2017.
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SEC Notes to the corporate financial statements 5.3.6. EMPLOYEE SHARE OWNERSHIP PLANS
Under these agreements, employees of SCOR SE and certain subsidiaries are entitled to invest the amounts due to them under the profit-sharing plan in a corporate mutual fund entirely invested in SCOR SE shares.
Amount distributed under the profit-sharing plan 1,665 1,216 1,055 1,247 1,153
The following table presents the gross cash compensation paid in 2016 and 2017 to the Group Chairman and Chief Executive Officer: Chairman and Chief Executive Officer
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SE CNotes to the corporate financial statements
Cross-currency swaps are used to hedge foreign exchange and interest rate risks of perpetual notes in CHF issued in 2012: the instruments convert the principal of 2012 placements for a total of CHF 315 million into EUR and the coupon on the CHF 250 million tranche to 6.2850% and on the CHF 65 million tranche to 6.235%. Both instruments mature on June 8, 2018.
In 2017, currency forward purchases and sales generated unrealized gain of EUR 1 million.
As at December 31, 2017, SCOR SE has an outstanding letter of credit capacity of EUR 195 million (EUR 406 million in 2016), recognized as a commitment received from banks. This outstanding capacity can be used to provide collateral on the forthcoming underwritten business. The allocation per bank is the following: ●● BNP Paribas: USD 14 million (EUR 12 million); ●● Deutsche Bank: USD 11 million (EUR 9 million); ●● Natixis: USD 48 million (EUR 40 million); ●● JP Morgan: USD 62 million (EUR 52 million); ●● Helaba: USD 2 million (EUR 2 million); ●● Commerzbank: USD 2 million (EUR 2 million); ●● CACIB: USD 40 million (EUR 34 million); ●● Citibank: USD 49 million (EUR 41 million); ●● Bayern LB: USD 3 million (EUR 3 million).
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SE CCertification of audit of historical financial information 6. CERTIFICATION OF AUDIT OF HISTORICAL FINANCIAL INFORMATION
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SEC Certification of audit of historical financial information
To cover the risk related to the technical reserves estimation, our audit approach was as follows: ●● we reconciled the technical reserves and claims recorded in the financial statements of the company SCOR SE with the financial statements of reinsured affiliates.
●● we obtained an understanding of the report of the Group chief actuary on the global adequacy of reserves.
With regards to the specific review for the measurement of Life and Non-Life technical reserves of affiliates, our response is detailed below: ●● we updated our understanding of the procedures and methods of measurement used in determining the technical reserves; ●● we obtained an understanding of the internal controls framework and tested the efficiency of key controls established by management in order to assess the completeness and reliability of the data and of the implemented models; ●● we examined the relevance of actuarial methods and parameters used as well as the assumptions chosen for a selection of contracts; ●● we performed procedures to analyze differences between expected claims and occurred claims in order to control subsequently the quality of estimates performed by the management; ●● we performed, with the support of our Non-Life actuarial team, a recalculation using our own assumptions and tools, of technical reserves for the most sensitive actuarial segments reserves; ●● for Non-Life business, we analyzed the documentation supporting the measurement of reserves related to catastrophes, both man-made and natural; ●● we included within our team members with specific skills in IT systems to perform procedures aiming at reviewing the internal control environment of the systems used by the management and test the functioning of several automated processes.
As stated in Note 5.3.1 of the notes to corporate financial statements, premiums written by the company SCOR SE are mainly premiums assumed as part of the internal reinsurance program of the Group. They include affiliates’ estimated written premiums which are then ceded to the company SCOR SE.
The company SCOR SE and its affiliates periodically review their assumptions and estimates based on experience as well as various other factors. Actual premiums can turn out to be different from management estimates. Observing a large portion of estimates in the written premiums of a financial year is specific to the reinsurance business. In this context, we considered the measurement of reinsurance premiums as a key audit matter.
On the specific area of the evaluation of affiliates reinsurance premiums, our audit approach was the following: ●● we obtained an understanding of the internal controls framework on processes related to Life and Non-Life premium estimates and we tested the efficiency of key controls established by management; ●● we examined the consistency of premiums estimates over the period, comparing them both to the operational plan prepared by management and approved by Board of Directors and to premiums actuals from previous financial years and we investigated, if any, significant differences identified; ●● we performed, for a selection of contracts, a deep analysis of underlying assumptions taking into account the activity, the records of reinsurance accounts received, and any new information received from ceding companies; ●● for new contracts underwritten in 2017, we performed on a sampling basis, controls on the consistency of premium estimates based on new business information available at the underwriting department; ●● we included, within our team, members with specific skills in IT systems to perform procedures aimed at testing automated computations and controls of Non-Life premiums estimates.
(see Notes 5.1.2 and 5.2.1 of the notes to the corporate financial statements)
ii. For real-estate and financial companies, the share of the net assets including unrealized gains net of tax is calculated. An impairment loss is recorded on a line-by-line basis when such values are below historical cost.
Verification of the Management Report and of the Other Documents Provided to Shareholders
Information given in the Management Report and of the Other Documents Provided to Shareholders with respect to the financial position and the financial statements
We attest the existence, in the Management Report section on corporate governance, of information required by articles L. 225-37-3 and L. 225-37-4 of the French Commercial Code (Code de commerce).
As at December 31, 2017, MAZARS and ERNST & YOUNG were in the 28th year and 22nd year of total uninterrupted engagement.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
UNCONSOLIDATED CORPORATE FINANCIAL STATEMENTS OF SCOR SE CCertification of audit of historical financial information
●● Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of the audit report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the Statutory Auditor concludes that a material uncertainty exists, there is a requirement to draw attention in the audit report to the related disclosures in the financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein.
Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most significance in the audit of the financial statements of the current period and which are therefore the key audit matters that we are required to describe in this report.
The Group Human Resources Department collects the data from the various Hubs and breaks it down by country where necessary. The information system used to manage Group employees is PeopleSoft HR. The Group Human Resources team, in charge of consolidating the data, performs weekly consistency checks of the PeopleSoft HR database.
Each category in this section corresponds to an item of information mentioned in the French “Grenelle II” implementing decree which is itself explicitly mentioned.
The items mentioned in the document pertain to the entire Group except ReMark (154 employees, fully consolidated entity), MRM (5 employees, fully consolidated entity), Telemed (28 employees), Réhalto (45 employees) and the Lloyd’s Channel Syndicate (132 employees). ReMark, Telemed and Réhalto are wholly-owned by SCOR Global Life SE. The Lloyd’s Channel Syndicate is a subsidiary of SCOR Global P&C SE. MRM is a subsidiary of SCOR SE. They are all managed independently from the Group in terms of human resources (HR policies, processes, rules and frameworks, etc.).
Definitions of social indicators may differ slightly from one country to another. Nevertheless, the SCOR indicators used in the tables below are consistent and meaningful at Group level. Unless otherwise indicated, no estimates are made in calculating these indicators.
SOCIAL AND ENVIRONMENTAL INFORMATION DSocial impact of SCOR’s activity 1.2. GROUP HR INDICATORS
(1) Headcount is calculated on the basis of employees registered as at December 31. Each Hub covers a region and may have employees in several countries. For example, the EMEA Hub covers France, the UK, Spain, Italy, Belgium, the Netherlands, Russia, Ireland, Switzerland, Germany, Israel, Sweden, Kenya and South Africa. As temporary workers and external service providers are managed according to specific rules in each site, this data is not mentioned in the headcounts for this year. For a breakdown of countries per Hub, see Section 2.1.5.
(1) Definition of Partner: see Note 1.2.8 – Total compensation: elements of compensation policy. The executive corporate officer is included in this population. This figure includes the decisions taken during the 2018 Partners promotions and nominations process which took place at the end of 2017.
(3) The “Group Functions and Support” division includes the Group’s Finance, Risk and Operations Departments as well as the departments directly managed by the Chairman and Chief Executive Officer. SCOR SE holds 59.9% of the capital of MRM (5 employees at December 31, 2017). Due to its specific activity, business model and organization, MRM’s human resources are managed independently from the Group.
Methodology: the definitions of “fixed-term contract” and “trainee” may vary from one country to another. SCOR defines “fixed-term contract” as a signed employment contract mentioning a termination date and “trainee” as an employee paid by the company under a tripartite agreement between the company, a school and the student employee.
SOCIAL AND ENVIRONMENTAL INFORMATION DSocial impact of SCOR’s activity 1.2.7. DEPARTURES
(3) Amount calculated by multiplying the number of shares granted by the fair value of each plan which is calculated in accordance with IFRS.
As a global group organized into three Hubs located in the world’s main financial centers, SCOR offers competitive base salaries in order to position itself as a competitive player on the labor market and attract and retain talent.
SCOR maintains a holistic approach to compensation. Compensation for both Partners and other employees comprises several components: a fixed and a variable portion, an immediate and a deferred portion, an individual and a collective portion. The components include a base cash salary, an annual cash bonus, shares and options where applicable, pension schemes and any other benefits.
SCOR reviews base salaries on a yearly basis to reward individual performance as well as when new responsibilities are assumed by the employee. An automatic adjustment to account for inflation is not applied as a general rule and is only granted in the few countries where it is legally required.
For non-Partner employees, the SCOR cash bonus rewards individual performance over the previous year. The bonus varies between 0% and 6% of the annual base salary depending on the rating received in the individual appraisal by the employee’s direct superior. This scale is increased by a multiplier (2 or 3) in some Hubs in order to take account of specific local labor markets.
Bonuses are calculated based on annual gross salary. The components of the Partners’ bonuses are linked to their Partnership level.
In addition, the Group pursues a policy of employee share ownership, which resulted in 221,160 shares being allocated to non-Partners in 2010, 141,020 shares in 2011, 168,440 shares notified in 2013, 199,750 shares in 2014 and 154,425 shares in 2015.
Hub In EUR thousand 2017 2016 2015 1.2.10. DISTRIBUTION BY AGE
Male Female Total Male Female Total Male Female Total 1.3. ADDITIONAL INFORMATION
The length of absence (1) within the Group is 14,057 days in France, 11 days in Belgium, 13 days in the Netherlands, 282 days in Spain, 226 days in Italy, 542 days in Russia, 43 days in South Africa, 0 day in Kenya, 1,843 days in Ireland, 1,407 days in the UK, 203 days in Sweden, 2,176 days in Switzerland, 16 days in Israel, 1,979 days in Germany, 2,814 days in the USA, 196 days in Brazil, 15 days in Argentina, 194 days in Canada, 0 day in Mexico, 148 days in Colombia, 247 days in Chile, 179 days in Australia, 59 days in China, 329 days in Hong Kong, 59 days in India, 9 days in Malaysia, 26 days in South Korea, 1,025 days in Singapore, 21 days in Japan, and 9 days in Taiwan.
SOCIAL AND ENVIRONMENTAL INFORMATIOND Social impact of SCOR’s activity 1.3.2. LABOR RELATIONS
Organization of employee/ management dialogue 72 meetings were held with staff representatives in Europe (33 meetings in France (1), 1 in Italy, 22 in Switzerland, 12 in Germany, and 4 in Sweden).
2 collective work agreements were signed in Brazil for the states of Rio de Janeiro and São Paulo: “Convenção Coletiva de Trabalho do Estado de Rio de Janeiro” (February 17, 2017) and “Convenção Coletiva de Trabalho do Estado de São Paulo” (not dated, covering 2017). These are general agreements establishing annual inflation salary adjustment and negociating certains benefits such as pharmacy, life insurance, child care, vacancies, weekly hours and others.
In 2017, on average, approximately 20 hours of training were given per employee (including the global e-learning programs).
●● At the Compensation and Nomination Committee meeting on July 25, 2012, it was noted that SCOR had made progress towards achieving gender equality at work and that the initiatives must continue. This objective is part of the initiatives supported by SCOR to facilitate the access of female employees to key positions within the Group and enhance the talent pool. This approach is also consistent with the internal policy of equality when increasing salaries, performing appraisals or promoting to Partner status (a reminder of this principle is sent to the managers with the guidelines) and with the recruitment process, which is designed to eliminate any risk of discrimination.
In parallel, the following commitments (resulting from the agreement) have been made at the Paris site: 1. develop and maintain diversity in employment and recruitment, especially via the participation in the
“Financi’Elles” network; 2. promote and ensure equal treatment in terms of pay and training between women and men working in equivalent fields and similar functions with the same skills, experience, responsibilities, performance and education; 3. ensure that absences related to maternity do not affect career development and salary; 4. promote compatibility between work and family life, especially through teleworking.
●● In the United Kingdom, several partnerships have been implemented: corporate membership with Cityparents (professional network promoting balancing family life with a progressive career), corporate membership with TWIN (The Women’s Insurance Network), partnerships with various training agencies for mentoring and coaching men and women in leadership. Moreover, a gender diversity committee has been set up.
●● In Ireland, Lunch and Learn events have been organized to discuss age diversity within the Company. ●● In Sweden, a company Code of Conduct on diversity and equal opportunities is in place, as required for all companies with 25 employees or more.
●● In Paris, an agreement was signed in 2009 on non-discrimination and equal treatment, recruitment and job retention, career planning and skills management for seniors.
●● In Germany: “Learning over Lunch” events continue to take place, with objectives such as the ways to help parents manage specific parental situations; there is one woman on the local Management Committee; part-time or flexible working arrangements are discussed to alleviate the difficulties faced by certain employees; paternity leave and child/parent care leave are promoted, teleworking is being considered (implementation of a pilot scheme), personal coaching and support and assistance for older employees are also in place, along with a pension scheme adaptable according to the employee’s personal circumstances.
●● In Switzerland, the employees have been invited to participate and engage in a lively discussion on various aspects of Diversity and how to further improve Diversity at SCOR.
●● In Australia and in Singapore, lunchtime talks have been implemented to identify and overcome the unconcious biasness linked to the intergenerational differences.
In the United Kingdom, evac chairs in the stairwell are made available for persons who are wheelchair bound.
●● The report covers the 12-month period from January 1, to December 31, of the year under review.
●● The items mentioned in the document pertain to the entire Group except ReMark, Telemed, Réhalto, MRM and the Lloyd’s Channel Syndicate. These first three entities are wholly-owned by SCOR Global Life SE and are managed independently from the Group in terms of human resources. The Lloyd’s Channel Syndicate is a subsidiary of SCOR Global P&C SE and is managed independently from the Group in terms of human resources. MRM is a subsidiary of SCOR SE and is managed independently from the Group in terms of human resources.
●● For employees who signed several similar employment contracts during the year, only the initial hiring and the final departure are counted.
●● 2017 Group staff turnover is calculated as follows: number of departures in 2017 (excluding dismissals, deaths, company transfers and trainees)/headcount as at December 31, 2016.
●● The length of absence includes sick leave, accident, maternity/paternity leave, sabbatical leave and exceptional leave.
●● An employee is considered to have a disability when the disability is recognized as such by the relevant body. The disability may be physical or mental or a combination of both. A disability may be present from birth, or develop during a person’s lifetime.
●● The collective agreements are concluded for a positive impact, in particular on the working conditions of employees and on the economic performance of the Company.
At an organizational level, the Group’s environmental policy is monitored by the Group General Secretary through the Head of CSR who, besides being responsible for compliance with environmental information disclosure requirements , encourages, coordinates and federates Group-led environmental initiatives.
2.2.1. FOSTERING RESEARCH INITIATIVES IN THE AREA OF CLIMATE RISK MANAGEMENT
This institutional commitment to climate change adaptation is backed at the highest level of the Group. SCOR’s Chairman and Chief Executive Officer has co-chaired the Geneva Association’s Extreme Events and Climate Risks working group since May 2015 and is a member of the steering committee of the Insurance Development Forum, which is an organization dedicated to climate resilience enhancement.
The SCOR’s Corporate Foundation for Science also promotes climate-related research. Since 2015, the Foundation has organized two scientific climate seminars which brought together international experts representing different disciplines. The last one on “how will risk modeling shape the future of risk transfer?” took place on March 9, 2017. The Foundation has also decided to support a research project on the exposure of coastal zones under different sea-level-rise scenario and its implications in terms of adaptation strategy (see section 3.2 Relationships with stakeholders).
At their own scale, the Group’s operational divisions contribute to the development of climate change adaptation and mitigation solutions in their core activities.
To do so, the Group focuses on the following areas: ●● environmental quality of offices and certification; ●● energy consumption management, and renewable energy use; ●● waste management and water consumption; ●● greenhouse gas emissions and voluntary offsetting.
The focus is put on greenhouse gas emissions for which the Group has reiterated its objective of intensity reduction by 2020 in the French Business Climate Pledge issued in November 2017. A pilot experiment regarding carbon offsetting supplements this objective.
The proactive roll-out of such systems also allows to increase the environmental profile of the office premises which are subjected to them. The environmental profile of one of SCOR’s office in Paris has thus been further increased following the 2017 annual audit of certification on the building’s operation. Since the adoption of the HQE operation standard, the environmental rating of this office building has been upgraded four times.
In addition, information and awareness raising actions are carried out Group-wide through internal communication materials, as well as in several Group’s locations, through events dedicated to environmental issues. For instance, the Group’s Paris office organizes every year an event during the Sustainable Development Week whilst in London, employees have been invited to share ideas that would enable the Group to further enhance its environmental performance.
In the context of its “low-carbon” approach, the Group focuses on the management of its energy consumption sources and the purchase of energy produced from renewable sources.
The Group consumed almost 17.1 GWh in 2017 to operate the premises occupied by its staff (lighting, heating, cooling – including data centers (1) – and power for operating various equipment). Most of the energy consumed by the Group’s sites that were encompassed in the scope of the environmental survey comes from electricity (67%). The share of renewable energies has significantly increased in 2017, thanks notably to the Paris office’s shift to a 100% renewable energy supply of electricity. They now account for 67% of electricity purchases in 2017 whereas this share was 31% in 2015.
The Group has implemented proportionate processes both in terms of reduction and recovery of its waste production on its main locations. In this respect, SCOR selectively monitors its waste, particularly the most toxic products for the environment (electronic and computer waste, batteries, ink cartridges and toners, etc.). The production of paper and cardboard waste is also monitored and consolidated throughout the Group, although the reinsurance industry uses less paper than the insurance industry due to less desktop publishing.
Most of the sites surveyed in 2017, including the smallest locations, were able to consolidate their paper waste volumes. To a lesser extent, these sites also managed to report on the other types of waste listed above.
Amongst the six gases covered by the Kyoto Protocol, carbon dioxide is the main greenhouse gas emitted by SCOR’s operational processes. The Group focuses on the most significant sources of emissions, specifically energy procurement, consumption of fossil fuel linked to employees’ business travel, and emissions stemming from paper consumption although for the latter the volume of emissions is insignificant.
(1) Energy consumption by outsourced data centers is not factored in, unlike data centers directly owned by the Group.
(2) As water consumption is sometimes included in rental charges, it may not be possible to identify the actual consumption for some of the sites included in the scope of reporting. In these situations, the consumption is estimated by application of a standard ratio set out in the environmental reporting protocol (50 liters per employee and contractor per day on the basis of 230 business days). The share of water consumption estimated according to this method accounts for 24% of the quantity reported above. Moreover, condensed water used for the cooling of the data center on very few of the locations subject to the environmental reporting is excluded from the scope of reporting.
(1) The coverage rates correspond to the number of employees working in the locations surveyed divided by the number of employees working in the entities which are fully integrated in the financial statements. Channel Syndicate employees are therefore not included in the coverage rate whilst the above indicators include their consumption, their business travel and the related greenhouse gas emissions. Further information on the scope of reporting can be found in Section 2.5 of this report.
In the Group’s underwriting activities, the Group has committed not to issue insurance or facultative reinsurance that would specifically encourage new greenfield thermal coal mines or stand-alone lignite mines or plants.
The Group, which in 2015 had divested from companies that derive more than 50% of their turnover from thermal coal, as part of the first French Business Climate Pledge, whilst pledging not to make any new future investment in these companies, lowered this threshold to 30% in 2017. This initiative applies to SCOR’s Invested Assets porfolio, which includes corporate bonds, equities, loans (including infrastructure loans), real estate and other investments.
This environmental report covers the parent company (SCOR SE) and the main locations of its subsidiaries in France and abroad which are fully consolidated in the financial statements with the exception of Remark Group (154 employees) and MRM (5 employees). These companies account for 5.4% of employees fully consolidated in the financial statements. Although Channel Syndicate (132 employees, 4.5% of employees fully consolidated in the financial statements) is managed independently from the Group in terms of human resources, SCOR includes this entity in its environmental reporting process. Associates and affiliates are excluded from the scope (see Section 4.6.22 – Notes to the consolidated financial statements, Note 22 – Related party transactions).
Consolidated data covers a 12-month period, generally from November 1, 2016 to October 31, 2017.
●● “Scope 2”: indirect emissions induced by electricity consumption, steam and cooling systems. For most of the sites surveyed, most of these emissions are induced by electricity procurement and for some sites, such as Paris, from urban cooling systems. For the calculation of the greenhouse emissions SCOR does not use a discounted factor for renewable energy if a certificate with the discounted rate to be applied is not provided by the energy supplier. Indeed, as the sources of renewable energy purchased are not always known, SCOR adopts a precautionary approach, using the emission factor resulting from the energy mix of a given country. Hence this approach tends to slightly overestimate the measured carbon footprint of the Group.
●● “Scope 3”: other indirect emissions. This Scope usually includes emissions from the use of offices (so-called depreciation), business travel, commuting, waste and so on. In this Scope, SCOR focuses on air travel (the most important source of emissions) as well as rail travel and paper purchases.
Quantitative information is not itemized in SCOR’s control and budget monitoring system. However, besides compliance with local standards and regulations as well as the roll-out of a travel policy calling for environmentally aware use of transport, SCOR devotes proportionate means and resources to the prevention of environmental risk and pollution. As described in Section 2.1.2 of this report, the Group’s affiliates deploy environmental management systems on most of their premises where the Group is the sole or main operator/manager.
The Group has not made any provisions or guarantees covering environmental risks, since SCOR has not been subject to any prosecutions or litigation involving its civil liability.
This category is not material due to the nature of the Group’s business (i.e. financial services). The Group has no tangible influence on food wastefulness. However, in some of the Group’s locations, notably where collective catering is provided to its employees, some measures are taken in this respect in collaboration with the service provider. This is notably the case at the Paris offices where awareness raising campaigns on this issue have been conducted.
Aside from its employees, for whom the conditions for dialogue are set out in Note 1.3.2 – Labor relations, SCOR maintains relationships with a broad range of stakeholders directly affected by its business. These stakeholders include: ●● shareholders and investors; ●● clients and reinsurance brokers; ●● financial and non-financial rating agencies; ●● national supervisory authorities for the insurance and reinsurance industries in countries in which the Group has subsidiaries (e.g. Autorité de contrôle prudentiel et de résolution – France, Prudential Regulation Authority – United Kingdom, Monetary Authority of Singapore – Singapore, Central Bank of Ireland – Ireland, Autorité fédérale de surveillance des marchés financiers – Switzerland, as well as the insurance commissioners of the States in which the Group’s American subsidiaries are registered in the United States of America); ●● trade associations representing the interests of the insurance and reinsurance industry (e.g Fédération Française de l’Assurance, Association des professionnels de la réassurance en France, Insurance Europe, The Geneva Association, American Council of Life Insurers, Reinsurance Association of America, Chief Financial Officers Forum, Chief Risk Officers Forum, Chief Compliance Officers Forum, Reinsurance Advisory Board, Global Reinsurance Forum); ●● non-governmental organisations and institutions such as for the latter the United Nations Program for the Environment via its financial initiative, the United Nations Global Compact as well as the Insurance Development Forum (IFD), which is a multi-stakeholder initiative gathering the United Nations, the World Bank Group, other international institutions and the (re) insurance industry.
SCOR has implemented a number of different methods for communicating with the above-mentioned stakeholders. These methods are tailored to each type of relationship (e.g. regular meetings, participation in working groups, client events on various topics including the technical aspects of reinsurance, on-demand information transmission, the production of regulatory reports). Generally, when such practices are not imposed by regulatory provisions, the Group does its utmost to adopt the best practices identified in each country.
In addition to the previously mentioned stakeholders and besides the relationships between the Group and a number of institutions that promote actuarial science, SCOR makes a particular effort towards educational establishments.
In France in particular, SCOR contributes to the financing of educational institutions through the payment of an apprenticeship tax to schools or institutions that provide work-study programs. Each year, SCOR welcomes apprentices and young interns who occupy technical or administrative functions.
Supporting research and teaching is a core feature of the Group’s corporate responsibility policy. SCOR has for many years developed relationships with different kinds of institutions (foundations, associations, schools and universities, research centers), in various * Relationships between the Group and people and organizations affected by its business, particularly non-profit employment agencies, educational establishments, environmental protection agencies, consumer associations and neighboring residents.
SOCIAL AND ENVIRONMENTAL INFORMATIOND Information related to societal commitments in support of sustainable development forms (corporate sponsorship, scientific research partnerships) and in a number of fields linked to risk, uncertainty, and reinsurance, both in France and abroad.
The Group or its Foundation as appropriate also contribute to the promotion of actuarial science by helping to fund actuarial awards in cooperation with local actuarial institutes both in Europe (Germany, Spain, Portugal, France, Italy, the UK, Switzerland and Sweden) and Asia (Singapore). Besides the actuarial prizes, the SCOR has been organizing since 2015 in partnership with the Institut des Actuaires (Institute of Actuaries) a symposium on actuarial sciences, in Paris. In November 2015, the conference was dedicated to “Actuarial and Data Science”, in December 2016, it focused on “Scientific laws and mathematical models: from physics to actuarial science”, and in December 2017, the theme was “Will Artificial Intelligence revolutionize actuarial science?”.
Cofounded in partnership with Nanyang Technological University in March 2011 and part of Nanyang Business School, The Insurance Risk and Finance Research Center (IRFRC) sponsors and conducts primary research on insurance and insurance-related risk management in the Asia-Pacific region. This Center organizes an annual scientific conference in this region of the world. In collaboration with academic experts and insurance industry partners, of which SCOR, the Center leads the CyRiM project (Cyber Risk Management Project). This project aims to pave the way to the development of an efficient cyber risk insurance market.
In France, SCOR has launched significant research partnerships in the field of economics and finance, notably in collaboration with the Foundation Jean-Jacques Laffont – Toulouse School of Economics (TSE) chaired by the 2014 Nobel Prize winner, Jean Tirole. The two chairs financed by SCOR, “Market Risk and Value Creation” (since 2008) and “Finance” (since 2009), have enabled Jean Tirole and the researchers at TSE to conduct outstanding theoretical and empirical research into risk, which may be consulted on SCOR’s website.
The Foundation benefits from annual financial support from SCOR of EUR 1.5 million to support the Group’s existing scientific research operations as well as new projects. SCOR has pledged EUR 7.5 million to the Foundation’s five-year program.
Since its very early days, the SCOR Coporate Foundation for Science has been financing seminars and colloquiums on various scientific subjects such as emerging infectious diseases, longevity risk for modern retirement schemes, or economic agents’ expectations in an economic crisis. In the same way, it will soon be supporting an international seminar in Paris on meteorites in collaboration the French Muséum national d’Histoire naturelle.
The Foundation also funds scientific research projects as part of its working program. In 2017, its scientific committee and Board of Directors selected two new research projects: (i) a project on the exposure of coastal zones under different scenarios of sea-level rise and its implications in terms of adaptation strategy (University of Amsterdam), (ii) a research chair on macroeconomic risk and its modeling (Paris School of Economics). These new projects add to the commitments taken by the Foundation over the last few years: Death risk modeling for the 90 years old and above in Belgium, France and Quebec and its evolution since 1980 (Institut national des études démographiques – National institute of demographic studies), feasibility and development studies on satellite imagery technology-based insurance solutions for the coverage of forage harvest (University of Ontario), modeling of life expectancy at older ages (University of South Denmark), development of a Global Earthquake Forecast System and an early warning system in collaboration with the ETH Zurich Foundation, emprical research on insurance companies’ attitude towards risk management in the United-States (HEC Montreal Foundation/Campus Montreal Foundation), research on Alzheimer’s disease with the Alzheimer Research Foundation, promotion of actuary in Africa through providing teacher training on actuarial techniques and creating a training program in collaboration with the ISFA of the University Claude Bernard in Lyon.
As an illustration, the SCOR Global Life Americas teams in the United States (Charlotte, Kansas City and Minneapolis), are, with the encouragement from General Management, engaged in social actions by supporting various charity operations under the label “Esprit de Corps”. This program which groups together a number of social and philanthropic activities, enables staff to devote four hours per month to voluntary work for the non profit associations of their choice. Other charity organizations such as United Way are also supported by SCOR Global Life Americas. Also in the United States, the SEAC (SCOR Employee Activity
Committee), an employees’ association of SCOR, mobilized twice in 2017 alongside the NGOs Concrete Safaris and Volunteers of America.
In Europe, the EMEA Hub subsidiaries are also engaged in associative activities. In France in 2017, SCOR employees participated for the second year in a row in a charity run called “Les Foulées de l’Assurance”, which gathers insurance professionals in support of heart disease prevention research.
SCOR is a longstanding partner of culture and the arts, notably in France (Orchestre de Paris), Germany (Walfart Contemporary Art Museum) and the United States where the staff of SCOR Global Life Americas, based in Charlotte, North Carolina are involved in fundraising campaigns for the Art & Science Council.
In the French subsidiaries covered by this report, any employee who deals with a supplier or contractor must, before concluding a contractual partnership, ensure that said supplier or contractor complies with the requirements of the Group’s Code of Conduct or with equivalent requirements. The purchase contract model developed by the Group’s Legal Department, thus contains a specific section on the Code of Conduct. This framework agreement also contains an appendix, the Sustainable Development Charter, which begins with a reminder of SCOR’s adherence to the principles of the United Nations Global Compact, and sets out the Group’s expectations with regard to its suppliers and subcontractors in the fields of labor relations, health and safety conditions, the environment, ethics and the way in which they must integrate these expectations into the design of their products and services.
The Group’s procurement chain is not complex. Assistance from external service providers mainly consists of IT development and maintenance, as well as maintenance and operations of the buildings from which SCOR conducts its business. The diligences stated above are applied to the conclusion these outsourcing contracts. Adopted by the Group in 2017 following the enforcement of UK Modern Slavery Act, the Statement on slavery and human trafficking complements these guidelines (see Section 3.5 – Human Rights).
SCOR conducts its business in a manner reflecting a high degree of integrity, professionalism and responsibility. SCOR is a member of the United Nations Global Compact and is in line with its principles, and particularly with its 10th principle concerning the fight against corruption.
The breadth and scope of the anti-bribery program has also been reexamined, so as to comply with the requirements of this new law (policy update, risk mapping and preparation of awareness measures).
The Group has implemented a zero-tolerance anti-bribery policy, providing guidance on banned activities, key principles and requirements regarding (i) gifts, hospitality and entertainment, (ii) dealing with business partners, (iii) interacting with public officials, (iv) charitable and political contributions and sponsorships, (v) payments and financial controls (management of expenditures, payments and authorizations), (vi) illegal facilitation payments.
SOCIAL AND ENVIRONMENTAL INFORMATIOND Information related to societal commitments in support of sustainable development
The policy identifies special situations that need careful attention, indicating that the legal and compliance departments must be contacted in case such situations are identified. The policy also outlines the roles and responsibilities of SCOR’s control functions to combat bribery.
Since 2013, the Group has had a Compliance Policy, annually reviewed, summarizing SCOR’s compliance approach. The Policy, which focuses on measures to prevent, detect and respond to the risk of non-compliance, consolidates the overarching principles, tools and processes stated in the Group Compliance Policies and Guidelines and also contributes to the Group’s efforts towards a more formalized/documented approach which regulators and others increasingly require. The Policy also contributes to the efficient coordination of compliance activities between the Group, its Hubs and locations as it documents current practices on interactions and reporting processes of Group, Hub and local compliance functions.
The United Nations Global Compact, of which SCOR is a member, invites the Group to promote and respect the protection of international human rights law and to ensure that it is not a party to any human rights violations.
Moreover, in the context of the CRO Forum (Chief Risk Officer Forum), SCOR participated in the drafting of a brainstorming paper on human rights and insurance. The purpose of this document published in 2014 is to better understand why the insurance and reinsurance industry would integrate respect for human rights into its risk management framework and how it can address human rights issues in its business relationships with other companies.
The Board of Directors is responsible for preparing a company’s management report including the CSR Information required by Article R. 225-105-1 of the French Commercial Code in accordance with the protocols used by the Company (hereinafter the “Guidelines”), summarised in the management report and available on request from the Company’s head office.
It is however not our responsibility to attest compliance with other legal dispositions where appropriate, in particular those included in law n° 2016-1691, dated December 9, 2016, said Sapin II (fight against corruption).
We compared the CSR Information presented in the management report with the list provided in Article R. 225-105-1 of the French Commercial Code.
For any consolidated information that is not disclosed, we verified that explanations were provided in accordance with Article R. 225-105, paragraph 3 of the French Commercial Code.
(1) ISAE 3000 – Assurance engagements other than audits or reviews of historical financial information.
SOCIAL AND ENVIRONMENTAL INFORMATIOND Statutory Auditor’s report on the review of selected SCOR SE environmental and social indicators
We verified that the CSR Information covers the scope of consolidation, i.e., the Company, its subsidiaries as defined by Article L. 233-1 and the controlled entities as defined by Article L. 233-3 of the French Commercial Code within the limitations set out in the methodological note, presented in the sections “Methodological note” of the management report.
Regarding the CSR Information that we considered to be the most important (1): ●● at parent entity level, we referred to documentary sources and conducted interviews to corroborate the qualitative information (organization, policies, actions), performed analytical procedures on the quantitative information and verified, using sampling techniques, the calculations and the consolidation of the data. We also verified that the information was consistent and in agreement with the other information in the management report; ●● at the level of a representative sample of entities selected by us(2) on the basis of their activity, their contribution to the consolidated indicators, their location and a risk analysis, we conducted interviews to verify that procedures are properly applied and we performed tests of details, using sampling techniques, in order to verify the calculations and reconcile the data with the supporting documents. The selected sample represents on average 27% of headcount considered as material data of social issues and between 20% and 29% of quantitative environmental data considered as material data (3) of environmental issues.
For the remaining consolidated CSR Information, we assessed its consistency based on our understanding of the Company.
Decennial insurance provides insurance coverage to building owners and construction companies against losses caused by structural defects in new buildings resulting from inherent defects in design, construction or the materials used. In a number of countries, including France, such coverage is required as a matter of law. It is generally granted for a period of ten years following the completion of the construction.
Frequently used measure of the value of expected future cash flows in life insurance and life reinsurance from the shareholder’s point of view, expressed as the value of net assets plus the present value of expected profits on the insurance portfolio diminished by the cost of capital and overhead expenses.
The Non-Life net attritional ratio is calculated by dividing Non-Life claims (excluding claims arising from natural catastrophes) by Non-Life premiums earned. This ratio is net of retrocession.
Reinsurance convention between an insurer and a reinsurer defining the terms under which the risks covered by the convention are ceded and accepted. The two main categories of treaty reinsurance are proportional and non-proportional.
Share of the risk retained by the insurer or reinsurer for its own account.
The year starting with the effective date of a policy or with the renewal date of that policy; to be distinguished from the accounting year. For example, a claim may occur during the current accounting year, but relate to a policy commencing in a prior underwriting year.
APPENDIX F: ADDITIONAL INFORMATION RELATING TO THE MANAGEMENT REPORT OF THE COMPANY AND THE GROUP – CORRESPONDENCE TABLE
In accordance with the AMF Guide for compiling registration documents updated as at April 13, 2015, statements and information pertaining to the management report on the Company’s and the Group’s activities in 2017, as approved by the Board of Directors on February 21, 2017 (the “Report”), are included and presented in the 2017 Registration Document which will be submitted as such to the Shareholders’ Meeting convened to approve the financial statements for the financial year ended December 31, 2017.
Statements and information relating to: ●● the resolutions submitted to the Shareholders’ Meeting, pursuant to the provisions of Article R. 225-83, 4° of the French Commercial Code; ●● the 2017 stock option plans; and
●● the 2017 free share allocation plans, are presented in separate reports of the Board of Directors.
The total assets of SCOR SE as at December 31, 2017 amounted to EUR 11,232,584,180.
The technical result of SCOR SE as at December 31, 2017 was EUR (28,997,902) while the financial result was EUR 59,812,608.
For additional information on the operating and financial situation of SCOR SE and its subsidiaries, as well as on the development of their business in 2017, see Section 1.3, Section 4 and Appendix C of the Registration Document.
Article D. 441 I.1: Unpaid received bills at the end of the financial year whose term is expired
1 to 30 days 31 to 60 days 61 to 90 days 91 days and more
(B) Excluded bills from (A) related to debts and contested claims unaccounted
In application of paragraph 5 of Article 39 of the French General Tax Code, EUR 5,688,401 of expenses are considered as non-deductible for tax income 2017. The related amount of taxation due by the Company adds up to EUR 2,527,357.
AND THE GROUP – CORRESPONDENCE TABLE Operating and financial review of SCOR SE
1.2.2. DIVIDENDS DISTRIBUTED BY SCOR SE OVER THE LAST THREE FINANCIAL YEARS
Over the three previous financial years, the amounts distributed by SCOR SE as dividends were as follows: Fiscal year ended on: 12/31/2016 12/31/2015 12/31/2014
AND THE GROUP – CORRESPONDENCE TABLE Additional information provided in the management report of the Company and the Group – Correspondence table 7. ADDITIONAL INFORMATION PROVIDED IN THE MANAGEMENT REPORT OF THE COMPANY AND THE GROUP – CORRESPONDENCE TABLE
STATEMENTS DEALING WITH THE MANAGEMENT OF SCOR SE AND THE GROUP IN 2017
Situation and activity of the Company and the Group during the past year Sections 1.1.1, 1.1.2, 1.3.1, 1.3.5, 1.3.6, 1.3.9, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 and 4.9
Dividends distributed in the course of the three last years and dividends eligible to the 40% relief Appendix F – 1.2.2
●● Transactions performed by the Company in its own shares in the framework of Articles L. 225-208, L. 225-209 and L. 225-209-2 of the French Commercial Code Section 2.3.1
●● Notice of holding more than 10% of the share capital of another joint-stock company – Disposal of cross shareholdings - (1)
●● Summary statement on the transactions on titles by the persons referred to in Article L. 621-18-2 (persons discharging managerial responsibilities as well as the persons closely associated with them) Section 2.2.4
Financial sanctions and orders by the Competition Authority on express decision for anti-competition behaviours Section 4.6.25
F ADDITIONAL INFORMATION RELATING TO THE MANAGEMENT REPORT OF THE COMPANY AND THE GROUP – CORRESPONDENCE TABLE Additional information provided in the management report of the Company and the Group – Correspondence table
For each of the corporate officers Total remuneration and advantages of any kind paid during the financial year by the Company, the controlled companies or the company controlling it (L. 233-16) Description of the fixed, variable and exceptional item comprising these remunerations and advantages as well as the criteria pursuant to which they have been calculated or the circumstances further to which they were granted Reference to the resolution voted in the conditions of article L. 225-82-2 of the French Commercial Code (concerning the say on pay ex ante) Sections 2.2.1.2, 2.2.1.3 and 2.2.3
Principles and criteria for the determination, the allocation and the grant of the fixed, variable and exceptional items comprising the total remuneration and the advantages of any kind attributable to the Chairman and Chief Executive Officer or Deputy Chief Executive Officers (Directeurs Généraux Délégués) because of their mandate Section 2.2.1.4
Commitments of any kind taken by the Company to the benefit of its corporate officers, corresponding to remuneration items, damages or advantages owed or likely to be owed with respect to the taking up, the termination or the change of their functions or after the exercise of such functions Section 2.3.3
Agreements entered into by the Company which are modified or terminated in the case of a change of control of the Company Sections 2.3.1.5, 5.1 and 5.2
(1) The Company did not hold any cross shareholdings in 2017.
APPENDIX G: REGULATION (EC) OF APRIL 29, 2004 – CORRESPONDENCE TABLE
7.2 List of issuer’s significant subsidiaries 1.2.3 Organizational structure of SCOR 11 to 13 8 Property, plant and equipment 8.1 Major existing or planned property, plant and equipment 1.2.6 SCOR investments in tangible and intangible assets 20 to 23
14 Administrative and management bodies 14.1 Information on the members of the Board of Directors and Senior Management 2.1.2 & 2.1.4 Board of Directors & Executive Committee 14.2 Administrative, management, and supervisory bodies and Senior Management conflicts of interest 2.1.2 Board of Directors 15 Compensation and benefits 15.1 Amount of compensation paid and benefits in-kind 2.2.1 to 2.2.3 Compensation of the executive corporate officer and directors in the form of stock options and performance shares 70 to 103 15.2 Total amounts set aside or accrued to provide pension, retirement, or similar benefits for financial year 2015 2.2.1 Compensation of the executive corporate officer and directors 16 Board practices 16.1 Date of expiration of the current term of office 2.1.2 Board of Directors 45 to 63 16.2 Information on service contracts of members of administrative and management bodies 2.1.2 Board of Directors 16.3 Information on the Audit Committee and the Compensation and Nomination Committee 2.1.3 Board of Directors’ Committees 16.4 Corporate governance regime 2.1.1 Corporate governance principles 44 to 45
Headings as listed in Appendix 1 of European Regulation n°809/2004 Paragraph Pages 17 Employees 17.1 Number of employees 2.1.5 Number of employees 69 17.2 Information on shareholdings and stock options or Company stock purchases by members of administrative and management bodies 2.2.3 Stock options and performance shares 17.3 Employee profit sharing plans 2.2.3 Stock options and performance shares 86 to 103 18 Principal shareholders 18.1 Significant shareholders known to SCOR 2.3.1 Capital ownership 105 to 115 18.2 Statement as to the absence of differences between the voting rights of various shareholders 2.3.1 Capital ownership 18.3 Direct or indirect control by a shareholder 2.3.1 Capital ownership 105 to 115 18.4 Agreement which could result in a subsequent change in control 2.3.1 Capital ownership 19 Related party transactions 19.1 Related party transactions 2.3.2 Related party transactions and agreements 116 19.2 Related party agreements 2.3.2 Related party transactions and agreements 116 19.3 Special report of the Auditors on related party agreements and commitments 2.3.3 Special report of the Statutory Auditors on related party agreements and commitments 117 to 119 20 Financial information concerning the issuer’s assets and liabilities, financial position and profits and losses 20.1 Historical financial information: consolidated financial statements 4 Consolidated financial statements 20.2 Pro forma financial information N/A N/A N/A
20.7 Dividend distribution policy 1.1.3 Dividend distribution policy 7 20.8 Litigation and arbitration procedures 4.6.25 Notes to the consolidated financial statements – Note 25 – Litigation 230 20.9 Material change in financial or commercial situation 4.6.26 Notes to the consolidated financial statements – Note 26 – Subsequent events 231 21 Additional information 21.1 Share capital 5.2 Description of SCOR’s share capital 248 to 249 21.2 Charter and Bylaws 5.1 Charter and Bylaws 242 to 247 22 Material contracts N/A N/A N/A
STATEMENT BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT APPENDIX B 263
Information about items that could affect a public offer, as required by Article L. 225-37-5 of the French Commercial Code 2.3.1.6
Report of the Board of Directors on the corporate governance see correspondence table of the Management
Statutory Auditors’ report on the financial statements Appendix C – 6 295 to 299
Statutory Auditors’ report on the consolidated financial statements 4.9 234 to 239
SCOR SE European Company With a share capital of EUR 1,524,196,637.05
Mail address 5 avenue Kléber 75795 Paris Cedex 16 – France www.scor.com