In some countries, the Group rewards employees for length of service by granting them a lump sum after certain periods of service. The primary country providing this benefit is France. For France, the present value of the obligation is calculated annually by an independent actuary using the projected unit credit method and is recognised on the balance sheet.
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 recognised as an expense. The total amount that is recognised 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 (ROE, for example). These conditions are taken into account when determining the probable number of options which will be acquired by the beneficiaries. At each balance sheet date, the Group reviews the estimated number of options which will be acquired. Any impact is then recorded in the income statement with the offsetting entry in shareholders’ equity over the remaining vesting period.
Deferred taxes are recognised using the balance sheet liability method, for all temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying value on the balance sheet.
The main temporary differences arise from tax losses carried forward and the revaluation of certain financial assets and liabilities including derivative contracts, certain insurance contract liabilities, provisions for pensions and other postretirement benefits. In addition, temporary differences arise on acquisitions due to the difference between the fair values of the net assets acquired and their tax base. Deferred tax is provided on temporary differences arising from investments in subsidiaries, associates and joint ventures, except where it is probable that the difference will not reverse in the foreseeable future.
Deferred taxes are not provided in respect of temporary differences arising from the initial recognition of goodwill, or from goodwill for which amortisation is not deductible for tax purposes, or from the initial recognition of an asset or liability in a transaction which is not a business combination and affects neither accounting profit nor taxable profit or loss at the time of the transaction.
Taxes relating to items recorded directly in shareholders’ equity are recorded directly in equity and not in the income statement.
The Group’s business is divided into two distinct segments: SCOR Global P&C which refers to the activities included in and under the responsibility of the management of the SCOR Global P&C Division (also referred to as “Non-Life”) and SCOR Global Life which refers to all operations included in and under the responsibility of the management of the SCOR Global Life Division (also referred to as “Life”). Each segment offers different products and services, which are marketed via separate channels. Given their specific nature, these segments constitute the primary level of segment information.
SCOR adopted IFRS as from 1 January 2005. In compliance with IFRS 1 “First-time adoption” certain standards may not have been retroactively applied. The first time implementation options applied on adoption of IFRS included: Business combination
SCOR opted not to restate business combinations prior to 1 January 2004, as permitted under IFRS 3. As permitted under IFRS 1, SCOR did not apply IAS 21 “Effects of Changes in Foreign Exchange Rates” retrospectively to goodwill resulting from business combinations that occurred before the transition to IFRS.
Translation adjustments relating to those subsidiary accounts with a differing functional currency to that of the Group, were transferred at 1 January 2004 into consolidated reserves. The new IFRS value of the translation adjustment at 1 January 2004 was therefore returned to zero. In the event of the subsequent disposal of these subsidiaries, the income or loss from the disposal will not include the recovery of exchange rate difference prior to 1 January 2004 but will include translation adjustments recorded after 1 January 2004.
The following tables set forth the operating income for each of the Group’s business segments as well as certain assets and liabilities for the financial years ended 31 December 2010 and 2009.
of which other income and expenses excluded from combined ratio calculation - (27) (27) - (19) - (19)
The distribution by geographic region, based on the location of the ceding company, is as follows: For the year ended 31 December SCOR Global Life SCOR Global P&C
Key balance sheet(1) captions by segment are estimated as follows: In EUR million
Share of retrocessionaires in insurance and investment contract liabilities 653 461 1,114 926 513 1,439
(1) Amounts presented above represent specific balance sheet line items reviewed at the segment level, as such some balance sheet items are excluded from this table.
Cash and cash equivalents at 1 January 752 573 1,325 1,207 576 1,783
Cash and cash equivalents at 31 December 687 320 1,007 752 573 1,325
On 4 December 2009, SCOR acquired 100% of the capital and voting rights of XL Life America Inc. from XL Capital Ltd. and entered into a retrocession contract to assume reserves related to this business. The business acquired showed strong compatibility with SCOR’s Life strategy that is rooted in focusing on traditional protection business that is not correlated with economic risks. The acquisition is expected to help SCOR Global Life to strengthen its services in the mortality-protection field and improve SCOR’s market position in the United States.
As from the acquisition date of 4 December 2009, XL Life America Inc. was fully consolidated by SCOR. This resulted in recognition of VOBA of EUR 20 million and a negative goodwill of EUR 13 million in 2009.
In accordance with IFRS 3, the accounting of a business combination can be reviewed within twelve months from the acquisition date. On 4 December 2010, the initial accounting was finalised with no net change in fair value of net assets acquired. These changes reflect the availability and use of more up to date information on which to base the final acquisition accounting and were recorded as follows: In EUR million 2009 Provisional
The amounts presented above are translated using the exchange rate at the date of acquisition.
The value of business acquired (“VOBA”) has been estimated as EUR 37 million based on an estimate of expected future income and using a discount rate including an appropriate risk premium. This intangible asset will be amortised over the lifetime of the underlying treaties, in line with expected emergence of income.
Change in scope of consolidation - - - Amortisation for the year - (42) (7) (49) Impairment for the year - - - -
Net book value at 31 December 2010 788 521 95 1,404
NET BOOK VALUE AT 31 DECEMBER 2010 788 521 95 1,404
The disclosure of intangible assets split between the Group’s operational segments SCOR Global P&C and SCOR Global Life has been presented within Note 2 – Segment Information.
For the purposes of impairment testing, goodwill acquired in a business combination is allocated by SCOR to the groups of cash generating units (CGUs) that are expected to benefit from the profitability and synergies of the business combination. SCOR groups its CGUs by its primary segments, SCOR Global P&C and SCOR Global Life. This is consistent with the way that SCOR now manages and monitors its business and cash flows.
In order to estimate the fair value of SCOR Global P&C for the purpose of impairment testing, SCOR uses a discounted cash flow model comprised of an earnings model, which considers forecasted earnings, and other financial ratios of the reportable segment based on Board approved business plans. Business plans include assessments of gross and net premium expectations, expected loss ratios and expected expense ratios over a 3 year time horizon together with actuarial assumptions such as the coefficient of variation on ultimate net reserves together with assumptions as to mean time to payment of existing reserves and future business. SCOR uses Euro risk free interest rates and the estimated
The annual goodwill impairment tests conducted for both the Global P&C segment and the Global Life segment show a fair value in excess of the total carrying value. Consequently, the result of the goodwill impairment tests is that no goodwill impairment charges were recognised for the year ended 31 December 2010 (2009: Nil).
VOBA at 31 December 2010 and 2009 relates to the following acquisitions: For the year ended 31 December
Other intangible assets at 31 December 2010 were EUR 95 million compared with EUR 80 million at 31 December 2009.
Other intangible assets with finite useful lives at 31 December 2010 were EUR 66 million compared with EUR 52 million at 31 December 2009. The largest component of this balance are the intangibles with finite lives generated from the joint venture agreement MDU in total EUR 26 million, acquired through the Converium business combination. The Group amortises its other intangibles with a finite life over a 3 to 10 year period dependent on the specific circumstances of each arrangement.
Depreciation for the period 3 (4) (1) Impairment for the period Other
On 12 May 2010 SCOR Auber, a wholly owned subsidiary of the Group, acquired a property Montrouge for EUR 42 million and on 18 June 2010 acquired Société par Actions Simplifiée (“SAS”) DB Caravelle holding two properties for EUR 40 million as part of its real estate investment portfolio. These acquisitions were partly funded by debt re-financing as presented within other financial debt within Note 14. In addition, the sale of “Sebastopol” property on 1 October 2010 generated a capital gain of EUR 14 million. This gain has been presented in the statement of income within investment income.
The Group holds a finance lease which contains an option to purchase an investment property at the end of the lease term. The amount of the minimum payments and their discounted values are as follows: In EUR million
Less than one year 4 2 8 5 From one to five years - - 5 3 More than five years - - - -
Various entities in the Group rent their office headquarters. The largest lease contract is by SCOR Paris for its headquarters located at La Défense with a remaining lease term of 2 years. The minimum payments are as follows: In EUR million Minimum payments Minimum payments
Less than one year 13 13 From one to five years 13 27 More than five years - TOTAL MINIMUM PAYMENTS 26 40
During 2009 the Group committed to a purchase and construction agreement in relation to an office building in Cologne. Total expected costs in relation to this contract amount to approximately EUR 35 million as estimated at the balance sheet date. This expenditure has been partially contracted as instalments payable from 2010 onwards and is contingent upon both the progress of construction work and backing by bank guarantees. As at the end of 2010, EUR 8 million of payments has been capitalized, of which the majority comprise instalments. The completion of the work relating to this agreement is anticipated by the end of 2011, with the final payment contingent upon the transfer of this property to the Group.
During 2010 the Group committed, subject to fulfilment of certain conditions, to purchase a Company whose primary asset is an office building, a portion of which will be used by SCOR and the remainder will be leased.The Group has made a deposit of EUR 17 million relating to the acquisition. At 31 December 2010, the purchase price has not been finalised, but is estimated to be approximately EUR 150 million and will be payable once the transaction has closed. The purchase is expected to close in 2011.
Derivative instruments Note 8 94 104 TOTAL INSURANCE BUSINESS INVESTMENTS 19,871 18,644
As at 31 December 2009 USD 51 million of insurance business investments were acquired as part of the acquisition of XL Life America Inc.
Analysis of insurance business investments and financial liabilities carried at fair value by valuation method: Investments and cash as at 31 December 2010
The level in which an investment is categorised within the fair value method hierarchy is determined on the basis of the lowest level of input that is significant to the fair value measurement of that instrument. The significance of an input is therefore assessed against the fair value measurement in its entirety. Assessing the significance of particular inputs into the fair value measurement requires judgment, considering factors specific to the instrument.
Level 1: Investments at fair value based on prices published in an active market
The Group has certain investments which are valued based on models prepared by external third parties using market inputs. These primarily comprise structured products, other than agencies for which the market which is considered active, as well as specific index linked equities and certain alternative investments. Similarly, the Group values certain derivative investments, namely the mortality and real estate swaps and S&P options, using internal valuation techniques based on observable market data. Further detail on the valuation of these derivative instruments is included within Note 8.
The Group considers those instruments whose fair value is not based on observable market data or whose fair value makes use of observable inputs that require significant adjustment based on unobservable inputs to be Level 3 fair value measurement category. These instruments are neither supported by prices from observable current market transactions in the same instrument, nor are they based on available market data. The main asset class within Level 3 fair value measurement category as at year end consists of derivative instruments primarily relating to the Atlas catastrophe agreements. Further detail on the valuation of these derivatives is included within Note 8.
Available for sale investments included approximately EUR 87 million which are measured at cost (2009: EUR 83 million). These investments include primarily unlisted equity securities. During the period, there were no material gains or losses realised on the disposal of available for sale investments which were previously carried at cost.
Investments at fair value through income 165 136 29 - -
During the year ended 31 December 2010, there were EUR 4 million net transfers into the Level 3 fair value measurement category.
Gains or losses (realised and unrealised) included in profit or loss for the period relating to level 3 investments are presented in the consolidated income statement as follows: Transfer of financial instruments between level 1 and level 2
There have been no material transfers between Level 1 and Level 2 in 2010.
Transfer into / out of level 3 fair value measurement At 31 December
(losses) Total Total gains or (losses) included in profit or loss for the period 4 (21) (17)
Total gains or (losses) included in profit or loss for the period for assets still held as at 31 December - (21) (21)
At 31 December, the unrealised gains and losses on available-for-sale investments can be analysed as follows: (1) Unrealised gains and losses on available for sale investments analysed above exclude gains and losses relating to foreign exchange.
Unrealised gains and losses on available-forsale investments (gross of tax) (1) 255 (159) 96 212 (215) (3)
The Group analyses its unrealised gains / (losses) on equity securities as follows: In EUR million
The following table summarises the fixed income securities and unrealised gains / (losses) by class of fixed income security: (d) Credit ratings – fixed income securities classified as available-for-sale and fair value through income
Total fixed income securities as at 31 December 2010 6,042 847 1,717 1,093 302 196 10,197
Total fixed income securities as at 31 December 2009 5,590 873 1,426 757 139 189 8,974
(e) Maturity – fixed income securities classified as available-for-sale and fair value through income
Loans and receivables include primarily receivables from cash deposits made at the request of ceding companies as collateral for commitments (insurance contract liabilities), short term investments and related accrued interest. Short term investments includes government bonds, certificates of deposit (CDs) and treasury bills (T-bills) maturing between 3 and 12 months from the date of purchase. CDs and T-bills maturing in more than 12 months from date of purchase are included in “other loans maturing in more than one year”.
The decrease of EUR 173 million during the year results from reduced funds held by ceding companies and disposal of short term investments. In 2009 the decrease of EUR 1,238 million was due to disposal of short term investments.
On 9 December 2009, SCOR completed the EUR 75 million Atlas VI transaction, replacing Atlas Reinsurance III. Atlas VI provides EUR 75 million of protection against European windstorms and Japanese earthquakes risks until 31 March 2013.
As at 31 December 2010 In EUR million 1,821 5,476 2,105 610 185 10,197
Atlas V & VI are special-purpose vehicles incorporated under the laws of Ireland and their notes are placed with various institutional investors. In accordance with IAS 39 “Financial Instruments recognition and measurement” these instruments have been recognised as derivative instruments, which are fully funded by the proceeds of the vehicles.
The swaps are indexed against a weighted combination of U.S. and European population mortality, measured over two consecutive calendar years. According to the structure of the arrangements, a payment will be triggered if, at any time during the period covered, the index exceeds attachment point as presented within the following table. At any index level between the attachment point and the exhaustion point, JP Morgan will pay to SCOR a pro-rata amount of the notional swap amount of the nominal amount, so that for example at an index level of 107.5% on the 2nd tranche, 50% of the total amount becomes payable and at an index level of 110%, the full amount will be paid out. The mortality risk swap is fully collateralised by JP Morgan in favour of SCOR and thus SCOR bears no credit risk exposure.
Nominal amount USD 100 million & EUR 36 million USD 75 million Risk period 1 January 2008 to 31 December 2011 1 January 2009 to 31 December 2011 Attachment point 115% 105% Exhaustion point 125% 110% Signing date 22 February 2008 1 September 2009
 SCOR swaps 1Y Euribor + 2.20% for the German all properties total return.
The objective of this transaction is to:  Hedge SCOR’s direct economic exposure to the Paris commercial real estate market.
The underlying indexed annuity contracts contain caps (limits) on the percentage increase in the underlying index that SCOR contractually must credit to the policyholders’ accounts. The average cap on the portfolio is about 6%. Our maximum total exposure at 31 December 2010 associated with the USD 841 million (2009: USD 812 million) notional amount including recognition of the caps if counterparties fail to pay is USD 50 million (2009: USD 56 million).
SCOR enters into interest rates swaps to cover its exposure to financial debt with variable interest rates. The fair value of these swaps is obtained from the banking counterparty using market inputs. The total notional amount relating to these swaps is EUR 68 million at 31 December 2010 (2009: EUR 97 million). Net interest paid under these swaps amounted to EUR 1 million in 2010 (2009: EUR 1 million).
In EUR million Notional Fair value Notional Fair value 31 December 2010 746 1 1,119 1 31 December 2009 (1) 744 (2) 660 (2) (1) The amounts presented exclude a forward contract executed near to the close of markets on 31 December 2009 for the sale of USD to purchase EUR for a notional amount of EUR 396 million in order to hedge the change in functional currency in a subsidiary to avoid being unhedged while markets are closed at the start of 2010. The value of this transaction as at 31 December 2009 was close to nil.
ASEFA 40% Spain 1,056 971 107 5 34 Mutre 33% France 1,043 927 295 5 38 SCOR CHANNEL 100% Guernsey 14 12 16 - 2 SCOR Gestion financière 100% France 4 - - - 4
Gross receivables from ceding companies 276 275 551 206 327 533
Estimated premiums receivable from cedants, net of commission 1,583 1,396 2,979 1,532 1,259 2,791 Assumed insurance and reinsurance accounts receivable 1,854 1,660 3,514 1,735 1,572 3,307
Receivables from ceded reinsurance transactions 96 35 131 132 (16) 116 Assumed insurance and reinsurance accounts payable (95) (135) (230) (157) (220) (377) Liabilities for cash deposits from retrocessionaires (342) (169) (511) (543) (186) (729)
Estimated premiums payable to retrocessionaires, net of commission (126) (71) (197) (298) (58) (356) Accounts payable on ceded reinsurance transactions (645) (261) (906) (881) (202) (1,083)
Realised gains and losses on investment disposals (24) 109 Change in accumulated amortisation and other provisions (1) 16 Changes in deferred acquisition costs 68 (118) Net increase in contract liabilities 432 889 Change in fair value of financial instruments recognised at fair value through income 28 (1) Other non-cash items included in operating results (325) (163) Net cash flow provided by operations, excluding changes in working capital 596 1,102
Change in loans and accounts receivable 73 (234) Cash flows from other assets and liabilities - Net tax (paid)/received (13) (17)
Impairment losses during the year - - - (7) - (7)
Other changes (including change in shadow accounting) (46) - (46) (61) - (61)
The number of ordinary shares which were issued and fully paid in circulation as at 31 December 2010 and 2009 were as follows: In 2009 the movements were due to the following operations:  The Board held on 3 March 2009 decided to reduce the share capital by cancellation of 129,539 treasury shares for a total value of EUR 1 million.
 At the end of 2009, 7,987,792 OCEANE bonds (EUR 2 per bond) were converted into 934,576 SCOR shares for a total amount of EUR 16 million.
The outstanding balance of the convertible OCEANE bond at the end of 2009 was paid back in full on 4 January 2010.
The Groups’ capital management objectives are:  To match the profile of its assets and liabilities, taking account of the risks inherent in the business;  To maintain strong credit ratings and healthy capital ratios in order to support its business objectives and maximise shareholder value;  To retain financial flexibility by maintaining strong liquidity and access to a range of capital markets;  To allocate capital efficiently and support the development of business by ensuring returns on capital employed meet the requirements of the regulators and stakeholders; and
The operations of the Group are subject to regulatory requirements within the countries where entities of the Group underwrite. Such regulations not only prescribe approval and monitoring of activities, but also impose certain obligations related to level of capital (e.g. capital adequacy) to cover the risk of default and insolvency on the part of the reinsurance companies and insurance companies to meet unforeseen liabilities.
In EUR million Book value Fair value Book value Fair value
OCEANE financial debt - repayable 1 January 2010 - - 191 218
INFORMATION ON RESERVES INCLUDED IN THE STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
The Group reviews the functional currency of its entities on an ongoing basis to ensure they appropriately reflect the currency of the primary economic environment in which they operate. As at 1 January 2010, the functional currencies of two of the Group’s subsidiaries; SCOR Switzerland AG, and SCOR Holding Switzerland, were changed with prospective application from USD to EUR.
The Combined General Meeting of 28 April 2010 decided that payment of the dividend approved for EUR 1.00 per share for 2009 could be received either in cash or in new ordinary shares, to be issued at a price set at EUR 15.96. This last option was exercised for 2,647,517 new shares for a total value of EUR 42 million, allocated to the share capital of the company for EUR 21 million and additional paid-in capital for EUR 21 million. The 2009 dividend distribution totalled EUR 179 million, of which EUR 42 million was settled in SCOR shares on 15 June 2010 and EUR 137 million was paid in cash.
EUR 50 million Perpetual Step-Up subordinated notes were issued on 23 March 1999. These notes are redeemable after 15 years, and at a 5-year interval, beyond the 15 years. The floating-rate notes bear interest indexed on the 6month Euribor plus (i) 0.75% for the first fifteen years of the issue, and (ii) 1.75% beyond the 15 years.
OCEANE FINANCIAL DEBT REPAID 4 JANUARY 2010 -- -- 191 218
During 2009, the Group provided liquidity to both its perpetual super-subordinated debt security (Tier 1 type) (TSSDI EUR 350 million) and its EUR 100 million subordinated debt issuance (call date July 2010) resulting in acquisition of own debt of EUR 99 million at an average price of 46.5%. The purchase of this debt at a discount gave rise to a consolidated pre-tax profit EUR 53.4 million which is included in other operating income during 2009.
On 21 June 2004, the Board of Directors approved the issuance of a bond represented by SCOR OCEANE bonds, as approved at the Combined Shareholders' General Meeting on 18 May 2004, and delegated to its Chairman the authority required to carry out such transactions. Issued on 2 July 2004, the nominal value of this bond issuance was EUR 200 million represented by 100 million OCEANEs with a nominal value of EUR 2 each with a term of 5 years and 183 days. The bonds earned interest at a rate of 4.125% payable upon maturity on 1st January of each year.
The 2009 earnings per share calculation, as presented within Note 23, incorporated the EUR 16 million increase in share capital reflecting those bonds converted during 2009. No additional amounts were included within 2009 diluted earnings per share calculation as the remaining bonds at year end were no longer considered potential ordinary shares.
These benefits amount to EUR 79 million and EUR 76 million at 31 December 2010 and 2009, respectively and include post-employment benefits such as pension plans EUR 74 million (2009: EUR 72 million) and Long service awards provisions EUR 5 million (2009: EUR 4 million).
Gross claims reserves and claims estimates as at 1 January 9,156 9,127
Revaluation of opening balance at current year end exchange rates 396 (35)
Net claims incurred relating to the current underwriting year 1,404 1,249 Net claims incurred for prior underwriting years 939 831
Net claims payments for the current underwriting year (90) (48) Net claims payments for prior underwriting years (2,069) (1992)
Net claim reserves and claims estimates as at 31 December 9,284 8,683
Net claims reserves & estimates –end of year (2) 6,931 6,354 5,602 5,756 5,301 8,727 8,660 8,683 9,284
1 year later 8,191 6,776 5,917 5,987 5,701 9,480 9,491 9,622 2 years later 8,133 6,762 5,989 6,262 5,765 9,482 9,490 - 3 years later 8,418 6,866 6,243 6,312 5,784 9,381 - - 4 years later 8,543 7,145 6,306 6,305 5,630 - - - 5 years later 8,853 7,205 6,302 6,184 - - - - 6 years later 8,901 7,265 6,200 - - - - - 7 years later 8,993 7,209 - - - - - - 8 years later 8,999 - - - - - - - 9 years later - - - - - - - Gross cumulative inception to date incurred losses as at 31 December 20102 10,868 8,135 7,027 6,927 6,102 10,113 10,099 10,106
Ceded cumulative inception to date incurred losses as at 31 December 20102 1,868 926 827 743 472 732 609 484
Gross UPR – end of year 1,617 1,124 978 637 575 1,108 1,099 1,135 1,384
Ceded UPR – end of year 130 76 40 24 18 39 39 40 51
Net UPR - end of year 1,487 1,048 938 613 557 1,069 1,060 1,095 1,333
Gross DAC – end of year 204 129 132 137 108 230 227 238 278
The next section of the table shows the portion of the initial year-end net reserves that was paid (claims paid) as of the end of subsequent calendar year. Claims paid are converted to EUR at the average foreign exchange rates during the year of payment and are not revalued to the initial exchange rates at which the reserves were established. Additionally payments include losses covered by unearned premium reserves in addition to those covered by the initial claims reserves.
Year ended 31 December Asbestos (1) Environment (1) 2010 2009 2010 2009
Gross reserves, including IBNR reserves (in EUR million) 123 120 18 26 % of Non-Life gross reserves 1.1% 1.1% 0,2% 0.2% Claims paid (in EUR million) 8 6 2 2 Net % of Group Non-Life claims paid 0,4% 0.3% 0,1% 0.1% Actual Number of claims notified under non-proportional and facultative treaties 9,746 9,492 8,272 8,234 Average cost per claim(1) (in EUR) 15,204 13,903 3,901 3,489 (1) Does not include claims which result in no ultimate cost and claims notified only for precautionary reasons for which the amount is not evaluated.
SCOR Global Life inherited from Converium retrocession liabilities related to Guaranteed Minimum Death Benefit (GMDB) rider options attached to variable annuity policies written in the US. This type of business, which carries during financial crisis a specific economic risk, is not within the usual scope of the SCOR Global Life underwriting policy. These treaties are all in run-off and cover in total approximately 0.8 million policies that were issued mainly in the late 1990's and which incorporate various benefit types. Claims occur in the event of death and if the GMDB exceeds the insured’s account balance. Under these circumstances, the difference between the GMDB and the account balance or the GMDB and the cash surrender value becomes due, depending on the definition of the underlying reinsurance agreements.
 Reset: After a given number of years, the GMDB is adjusted to the current account balance. This means that the GMDB can be reduced but often not below the paid-up premium (adjusted for later deposits and partial withdrawals).
An analysis of the share of retrocessionaires in the Group’s insurance and investment contract liabilities by rating of the retrocessionaires and collateral from retrocessionaires in favour of SCOR at 31 December 2010 and 2009 is as follows: In EUR million AAA AA A BBB < BBB Not rated
Total as at 31 December 2009 Share of retrocessionaires contract liabilities 29 586 649 100 69 6 1,439 Securities pledged 2 51 56 9 6 - 124 Deposits received 3 221 447 28 11 4 714 Letters of credit 3 56 62 9 7 - 137 Total collateral from retrocessionaires in favour of SCOR 8 328 565 46 24 4 975 Share of retrocessionaires contract liabilities net of collateral 21 258 84 54 45 2 464
The amounts paid under defined contribution plans were EUR 11.3 million and EUR 7.8 million for the years ended 31 December 2010 and 2009, respectively.
The employees of SCOR in Paris take benefit of an agreement "Indémnité de Fin de Carrière" signed as of 4 September 2001. This agreement has been cancelled as of 28 September 2009 with coverage valid until 31 December 2010. The lump sum defined benefit is granted to SCOR employees only if they are employed by SCOR at the date of their retirement and if they are eligible under the conditions stated in this agreement.
The main defined benefit pension plans relate mainly to Switzerland, North America and France. These locations represent 43%, 20% and 16%, respectively, as at 31 December 2010, (40%, 20% and 21%, respectively, at 31 December 2009), of the Group’s obligation under defined benefit plans.
Discount rates are defined with reference to high quality long term corporate bonds with duration in line with the duration of the obligations evaluated. In Switzerland, the discount rates are determined by reference to high quality government bonds due to the absence of a deep market in high quality corporate bonds.
Amortisation of past service cost 1 1 - - 1 1 - -
The following schedule reconciles the movements in the balance sheet amounts for the year ended 31 December 2010 and 2009: In EUR million
Liability (gains)/losses due to change in assumptions 14 11 - 3 6 5 (1) 2 Liability (gains)/losses due to experience - 4 (4) - (1) 2 (3) -
Fair value of assets as at 1 January 95 15 53 27 88 14 47 27
Expected return on plan assets 5 1 2 2 5 - 3 2
Asset (gains)/losses due to experience - - - - 2 - - 2
Fair value of assets as at 31 December 114 14 68 32 95 15 53 27
Net defined benefit obligation as at 31 December - Deficit 85 58 17 10 83 56 18 9
Funded or partially funded obligation as at 31 December 164 41 85 38 152 46 72 34 Fair value of plan assets as at 31 December 114 15 68 31 95 15 54 26
Total funded status as at 31 December – deficit 85 58 17 10 83 55 18 10 (1) For 2009, the amount includes a EUR 2.2 million impact due to a change in the tax legislation applicable to a French plan (2) For 2009, this includes a EUR 2.6 million charge relating to a French plan, which was suspended during the year (3) For 2010, this includes a EUR 12.5 million profit relating to a French agreement, "Indémnité de Fin de Carrière", which had been cancelled in 2009.
The following table summarises the movements in accrued (prepaid) balances recorded in the consolidated balance sheets as at 31 December 2010 and 2009: In EUR million
Actuarial (gains)/losses immediately recognised in other comprehensive income (OCI) 14 15 (4) 3 3 4 (2) 1
The Group has established various free share and stock option plans for the benefit of some of its employees (the plans are equity settled only). The terms of these awards are defined and approved by its Board of Directors at the grant date.
The average remaining life of the options and the average exercise price for 2010 and 2009 are presented below.
The fair value of options is estimated by using the binomial method which takes into account the terms and conditions under which the options were granted. The following table lists the characteristics used at the end of 2010 and 2009: Plan
Fair value at grant date (EUR) 2.40 3.10 3.16 3.74 Exercise price (EUR) 17.79 18.40 17.117 14.92 Expected life 4 years 4 years 4 years 4 years Historical volatility (1) 27.24% 28.71% 33.01% 37.26% Dividend 5.28% 5.28% 4.87% 4.87% Risk-free interest rate 1.5% 2% 2.119% 2.749% (1) The historical volatility used to determine the fair value of stock options is based on an historical volatility over periods corresponding to the expected average maturity of the options granted, which is partially smoothed to eliminate extreme deviations and to better reflect long term trends.
The vesting of these shares will be effective, in addition to the presence conditions, if three out of four of the performance conditions outlined below are met :  The S&P financial strength rating must be “A” in 2010 and 2011;  The P&C business combined ratio must be less than or equal to 102% on average in 2010 and 2011;  The Life business operating margin must be higher than or equal to 3% average in 2010 and 2011;  The SCOR Group’s ROE for the financial years ending 31 December 2010 and 31 December 2011 must exceed the risk-free rate in 2010 and 2011 by 300 points on average.
 In addition to the conditions above, 20% of the performance shares allocated in 2010 to the Chairman and Chief Executive Officer (and 20% of those allocated to the members of the COMEX) are subject to the further performance condition that the SCOR Group's financial strength rating by AM Best must have increased to "A" before March 2011.
15.3 for French 13.6 for foreigners 15 for French 13.4 for foreigners 15.9 for French 13.3 for French 12.5 for foreigners 13.2 for French 12.4 for foreigners 14.3 for French 13.4 for foreigners 14.6 for French 13.7 for foreigners
The main components of income taxes for the years ended 31 December 2010 and 2009 are presented below: In EUR million 2010 2009
The main reconciling items are due to the difference between local tax rate of each taxable entity and the Group tax rate, permanent differences reported by each entity, reduced rates and specific items, including the reactivation EUR 58 million of deferred tax assets relating to US and Swiss operations.
Reconciling items to actual income tax (expense) / benefit: Differences between French and local tax rates 43 40
Tax-exempt income 15 23 Non-deductible expenses (6) (21) Recognition or utilization of tax losses for which no DTA has been recognized 5 108 Write-down and reversal of previous write-down of deferred tax assets 52 10 Changes in tax risk provision (21) Non creditable / refundable withholding tax (1) Changes in tax rates 43 (2) Share based payments (5) Income taxes prior years (4)
The tax rate change impact results from a tax law change in France and the revaluation of deferred taxes for UK companies due to the change of the UK income tax rate from 28% to 27% effective April 2011.
The standard tax rates for the primary locations in which the Group has operations are as follows: United Kingdom 28.00% 28.00%
Effect of changes in foreign exchange rates 136 - 136 (21) - (21) Revaluation of assets available for sale 87 (25) 62 480 (138) 342
Actuarial gains / losses not recognised in income (14) 6 (8) (8) - (8)
Deferred tax assets and liabilities and the related expense or benefit as at and for the years ended 31 December 2010 and 2009 were generated by the following items: Balance sheet as at 31 December Deferred taxes benefit (expense) for the period
Unrealised revaluations and temporary differences on investments 95 1 22 2
The operating tax losses which have not been activated as deferred tax assets relate primarily to the French tax Group and subsidiaries in Switzerland and the United States.
The tables below show the analysis by type of investment income and split by category of financial assets: Analysis by type
Interest income on funds withheld and contract deposit 217 212 Interest expense on funds withheld and contract deposit (19) (26) Currency gains (losses) (15) 14 TOTAL INVESTMENT INCOME 690 503
Change in ceded unearned premiums 1 7 8 (5) - (5)
Net income from reinsurance operations 20 (180) (160) (28) (108) (136)
Staff costs 213 198 Taxes other than income taxes 17 17 External charges for services (1) 174 174 OTHER OPERATING AND ADMINISTRATIVE EXPENSES 404 389
Group audit fees for services rendered during the year are detailed below: (1) Statutory audit and certification of local and consolidated financial statements (2) Other audit-related services (3) Other services, rendered by the Auditors to the fully-consolidated companies and due diligence.
Basic and diluted earnings per share are calculated as follows for the years ended 31 December 2010 and 2009, respectively: In EUR million
SCOR SE is the ultimate parent of the Group. As noted above transactions between SCOR SE and its subsidiaries meet the definition of related party transactions. Where these transactions are eliminated on consolidation they are not disclosed in the group’s financial statements. A list of the Group’s subsidiaries, associates and joint venture is shown below.
The total gross compensation of key management personnel, which include short-term employee benefits, post employment benefits, other long-term benefits, termination benefits and share-based payments, for 2010 and 2009 financial years is outlined below.
The total gross cash compensation of key management personnel for 2010 and 2009 financial years is presented below: In EUR million 2010 2009
Provision of technical support in relation to risk management information technology and reinsurance services. Services are charged for annually on an arms length basis.
SCOR Global Life SE France 100.00 99.99 100.00 99.99 Full Investors Insurance Corporation United States 100.00 100.00 100.00 100.00 Full ReMark Group BV Netherland 100.00 100.00 100.00 100.00 Full ReMark International BV Netherland 100.00 100.00 100.00 100.00 Full Revios Canada Holding Corp. Ltd. Canada 100.00 100.00 100.00 100.00 Full Revios Reinsurance Canada Ltd Canada 100.00 100.00 100.00 100.00 Full SCOR Financial Services Ireland 100.00 100.00 100.00 100.00 Full SCOR Global Life Re Insurance Company of Texas United States 100.00 100.00 100.00 100.00 Full SCOR Global Life Reinsurance (Barbados) Ltd., Bridgetown Barbados 100.00 100.00 100.00 100.00 Full SCOR Global Life Reinsurance Company of America United States 100.00 100.00 100.00 100.00 Full SCOR Global Life Reinsurance International (Barbados) Ltd., Bridgetown Barbados 100.00 100.00 100.00 100.00 Full SCOR Global Life Reinsurance Ireland Limited Ireland 100.00 100.00 100.00 100.00 Full SCOR Global Life Reinsurance UK Limited United Kingdom 100.00 100.00 100.00- 100.00 Full SCOR Global Life Rückversicherung Schweiz AG Switzerland 100.00 100.00 100.00 100.00 Full SCOR Global Life U.S. Re Insurance Company United States 100.00 100.00 100.00 100.00 Full Sweden Reinsurance Co. Ltd Sweden 100.00 100.00 100.00 100.00 Full
SCOR Global P&C SE France 100.00 99.99 100.00 99.99 Full SCOR Reinsurance Asia Pacific Pte Limited Singapore 100.00 100.00 100.00 100.00 Full SCOR Reinsurance Company Asia Hong Kong 100.00 100.00 100.00 100.00 Full SCOR (UK) Group Limited United Kingdom 100.00 100.00 100.00 100.00 Full SCOR Canada Reinsurance Company Canada 100.00 100.00 100.00 100.00 Full SCOR Global P&C Ireland Ireland 100.00 100.00 100.00 100.00 Full SCOR Global South Africa (Pty) Ltd South Africa 100.00 100.00 100.00- 100.00 Full SCOR P&C Ireland Holding Limited Ireland 100.00 100.00 100.00 100.00 Full SCOR UK Company Limited United Kingdom 100.00 100.00 100.00 100.00 Full SCOR Underwriting Ltd United Kingdom 100.00 100.00 100.00 100.00 Full SCOR Holding (SWITZERLAND) AG and its subsidiaries
Finimo Realty Pte Ltd Singapore 100.00 100.00 100.00 100.00 Full SCOR Auber France 100.00 100.00 100.00 100.00 Full
FCP SGI Euro Govies France 100.00 100.00 100.00 100.00 Full FCP Euro ABS AAA France 100.00 100.00 - - Full FCP Euro ABS Mezzanine France 100.00 100.00 - - Full FCP Euro Corporate France 100.00 100.00 - - Full FCP Euro Covered AAA France 100.00 100.00 - - Full FCP Euro Equities France 100.00 100.00 - - Full FCP Euro High Yield France 100.00 100.00 - - Full FCP GBP Equities France 100.00 100.00 - - Full FCP USD Corp. Invest Grade France 100.00 100.00 - - Full FCP USD High Yield France 100.00 100.00 - - Full Associates and Joint Ventures
Unused lines of credit (1) 134 50 Letters of credit – retrocessionaires (2) 61 137 Endorsements, sureties 14 16 Other commitments received - -
Group. (4) This is the total carrying amount of financial assets pledged as collateral for liabilities or contingent liabilities.
Minimum payments under operating lease commitments, estimated minimum rental income amounts received by SCOR as part of its real estate investment activities and commitments to purchase properties are included within Note 5 – Tangible assets and real estate investments.
The risk management framework and governance of the Group is described in the introduction to Section 4 – Risk factors of the 2010 Registration Document which incorporates these consolidated financial statements.
Concentrations of Non-Life reinsurance risks are included in the 2010 Registration Document in Section 4.1.2 – SCOR is exposed to losses from catastrophic events.
Credit risks identified by SCOR are described in the 2010 Registration Document in Section 4.1.12 – SCOR is exposed to credit risks.
Impairment information relating to financial assets is included in Note 6 - Investments, Note 7 - Loans and receivables, and Note 10 - Accounts receivables and debts with cedants and retrocessionaires and Note 20 – Investment income.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial instruments. SCOR does not face substantial liquidity issues in the short term due to limited obligations related to financial instruments and the significant level of cash and short term investments, EUR 1.3 billion at 31 December 2010 (2009: EUR 1.7 billion).
Liquidity risk is described in the 2010 Registration Document in Section 4.3.1- SCOR faces liquidity requirements in the short to medium term.
The technical reserves of SCOR Global P&C are established on an undiscounted basis (except workers compensation). The table below includes the estimated maturity profiles of the Non-Life insurance liabilities based on payment patterns derived from historical data.
Maturity profiles have been prepared based on undiscounted contractual maturities and include contractual interest payments. In the case of perpetual debt, or debt which is subject to multiple redemption dates, the analysis below assumes such debt is redeemed on the contractual redemption date. Of the amounts below, EUR 337 million (2009: EUR 312 million) relates to variable rate debt.
OCEANE financial debt repaid 1 January 2010 4.12% 191 - - 191
The liabilities recorded for the annuity business would not change materially to a 100 basis point change in interest rates as they are linked to account values. However, the shadow accounting would be impacted.
There are no material amounts of discounted reserves in the Non-Life portfolio which would result in interest sensitivities. Additionally, for lines of business where there are interest sensitivities at the level of the ceding company and for which no direct information on these sensitivities is submitted to SCOR level (e.g. the bodily injury portion of automobile), SCOR considers that the information provided by the ceding company is not necessarily representative of the evolution in interest rates. The IBNR calculations performed by SCOR using methods other than the loss ratio method do not represent a material portion of the recorded reserves and therefore the sensitivity is not considered material.
Additional information is included in the 2010 Registration Document in Section 4.2.2 – SCOR faces risks related to its equity-based portfolio.
In general, equity movements have no impact on the reported liabilities of the life business as the underlying policies and reinsurance contracts are typically unrelated to equity prices. For some risk premium treaties (where the underlying
insurance policies are unit-linked or universal life) the sums at risk and thus the expected claims, vary with the movement of the underlying assets. However, under almost all reinsurance programmes, premiums are also linked to the sums at risk such that the liability would not materially change.
The premiums on the Guaranteed Minimum Death Benefit (GMDB) business underwritten by the SCOR Group in the U.S. market vary with the value of the underlying assets rather than the sum at risk. Thus, premiums would decrease under a decline of the equity values whereas the expected claims would increase thus leading to an increase in the liability. However, included in the reserve calculation is a prudent margin for this fluctuation. Accordingly, there is no requirement for a material change in reserves in the event of a 10% change in equity values.
Interest +100 basis point (1) - (198) - (201) % of Equity - (4.6)% - (5.2)% Interest – 100 basis points (1) - 174 - 204 % of Equity - 4.0% - 5.2% Equity markets +10% (2) - 75 1 72 % of Equity - 1.7% 0.0% 1.9% Equity markets -10% (2) - (70) (13) (67) % of Equity - (1.6)% (0.3)% (1.7)% (1) The impact of interest rate sensitivity on income relates to financial debt at variable rates. (2) Excludes investments in hedge funds which normally do not have a uniform correlation to equity markets and securities where SCOR has a strategic investment including where the Group has a substantial shareholding but does not meet the “significant influence” criteria in IAS 28. (3) The reduction in equity represents the estimated net asset impact independently to the amount of impairment recognised in the profit and loss account. (4) Net of tax at an estimated average rate of 28%.
In addition, during 2009 the Group entered into net investment hedges to reduce its exposure to variations in the net assets of USD functional currency subsidiaries. These hedges resulted in a total negative foreign exchange impact of EUR 22 million within equity (2009: EUR 1 million). As at 31 December 2010, the Group does not have any hedges of net investments in place.
After an initial investigatory phase, the Directorate of Investigation of the CNC has confirmed its initial accusation and has sent the file to the Council of the CNC for a final decision. The CNC issued its decision on 12 November 2009, which puts and end to the proceeding regarding the decennial insurance against, inter alia, SCOR Ibérica Sucursal. The fine amounts to EUR 18.6 million for SCOR which is sanctioned along with other insurers and reinsurers within the construction market in Spain. SCOR has decided to appeal this decision before the Administrative Chamber of the National Hearing and filed an appeal on 21 December 2009. SCOR intends to assert strong arguments, concerning both the proceedings and the substance of the litigation, as well as upon the calculation of the fine and its proportionality.
Pursuant to the Lloyd’s Market Franchise Board “in principle” approval, the Channel Syndicate (Syndicate 2015) successfully started to underwrite business on 5 January 2011. SCOR provides 100% of the capital for this syndicate.
The report from the Statutory Auditors on the consolidated financial statements for the financial year ended 31 December 2010 is reproduced below: Report of Statutory Auditors on the consolidated financial statements
In compliance with the assignment entrusted to us by your Annual General Meeting, we hereby report to you, for the year ended 31 December 2010, on:  the audit of the accompanying consolidated financial statements of SCOR SE,
We conducted our audit in accordance with the professional standards applicable in France; those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes verifying, by audit sampling and other selective testing procedures, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used, the significant estimates made by the management, and the overall financial statements presentation. We believe that the evidence we have gathered in order to form our opinion is adequate and relevant.
Without qualifying our opinion, we draw attention to the matters discussed in the note 1 - “accounting principles and methods“ – paragraph (D) regarding the IFRS standards effective during the period especially related reivisions of IAS 39 “Eligible Hedge items” and IFRS 2 “Share based payments”.
In the specific context of the financial crisis, we examined the control system in place, detailed in note 26 to the consolidated financial statements, relative to the inventory of direct and indirect exposures, and the system in place for their assessment, as well as the valuation methods and write-down policies applicable to certain financial instruments. We have obtained assurance that the information provided in the aforementioned notes is appropriate, and that the approaches and policies described were properly applied by the Group.
 Note 3 - “Acquisition of XL Life America Inc. (XLRLA)” to the consolidated financial statements describes the methods and assumptions used for the final valuation of net assets, and by comparison with the acquisition price, of the negative goodwill following the acquisition of XL RLA.
Our audit consisted of assessing the reasonableness of the assumptions used by the management and in verifying calculations leading to the company valuation.
We examined the Group’s procedures to identify these risks, to evaluate and reflect them in the financial statements.
Our work consisted of assessing the data and assumptions used, reviewing the company’s calculations and verifying that the information in notes 1 - “(O) pension obligations and related benefits” and 15 to the consolidated financial statements are appropriate.
We have also performed the specific verifications required by law in accordance with professional standards applicable in France
The Report by the Chairman of the Board of Directors on the conditions for the preparation and organisation of the work of the Board of Directors and on internal control procedures, pursuant to Article L. 225-37 of the French Commercial Code, featured in Appendix B, has been the subject of a report by the SCOR statutory auditors, which is also included in Appendix B.
The SCOR corporate accounts for the financial periods ending 31 December 2010, 2009 and 2008, included respectively in Appendix A of this Registration Document, at pages 300 to 334 of the registration document filed with the Autorité des marches financiers on 3 March 2010 under the number D. 10-0085 and at pages 286 to 324 of the registration document filed with the Autorité des marchés financiers on 5 March 2009 under the number D. 09-0099 with the Autorité des marches financiers, have been the subject of reports by the statutory auditors, featured respectively in Appendix A of this Registration Document, at pages 335 to 336 of the registration document filed with the Autorité des marches financiers on 3 March 2010 under the number D. 10-0085 and at pages 325 to 327 of the registration document filed with the Autorité des marches financiers on 5 March 2009 under the number D. 09-0099.
According to the decision of the Extraordinary Shareholders General Meeting of the Company dated 18 May 2004, in its fourth resolution to authorise the Board to grant to officers and employees options to subscribe for or purchase of shares and to acknowledge, if necessary, at its first meeting following the year end of the Company, the number and amount of new shares issued during that period following the exercise of options, the Board of Directors of SCOR acknowledged, on 28 July 2010, the capital increase of EUR 540,699.01 by creation of 68,643 shares with a nominal value of EUR 7.8769723 each.
Pursuant to the decision of the Extraordinary Shareholders General Meeting of the Company dated 28 April 2010, in its eighteenth resolution to authorise the Board to reduce the share capital by cancellation of treasury shares, the Board of Directors of SCOR decided on 28 July 2010 the share capital reduction of EUR 540,699.01 by cancellation of 68,643 new treasury shares with a nominal value of EUR 7.8769723 each.
 that these 2,647,517 new shares have been issued at a price of EUR 15.96, i.e., a total subscription amount of EUR 42,254,371.32 (including EUR 20,854,418.07 of nominal value and EUR 21,399,953.25 of issuance premium).
According to the decision of the Extraordinary Shareholders General Meeting of the Company dated (i) 18 May 2004, in its fourth resolution, (ii) 31 May 2005 in its sixth resolution and (iii) 16 May 2006 in its fifth resolution to authorise the Board to grant to officers and employees options to subscribe for or purchase of shares and to acknowledge, if necessary, at its first meeting following the year end of the Company, the number and amount of new shares issued during that period following the exercise of options, the Board of Directors of SCOR acknowledged, on 7 March 2011, the capital increase of EUR 1,155,260.40 by creation of 146,663 shares with a nominal value of EUR 7.8769723 each.
To the Company’s knowledge, there is no significant pledge on the SCOR’s shares.
Refer to Section 20.1.6.25 – Note 25 – Commitments received and granted for a description of the pledges on the Company’s assets.
Expiration date 17 Dec. 2010 - 19,042,848 19,042,848 1 Jan. 2011 31 Dec. 2013 Stock option plans
Refer to Section 21.1.4 – Amount of convertible securities, exchangeable securities or securities with subscription warrants for a description of the warrants issued on 17 December 2010.
Delegation of powers granted by the Extraordinary Shareholders' Meeting of 28 April 2010 10th resolution (Delegation of powers to the Board of Directors for the purpose of deciding upon the incorporation of profits, reserves or premiums into the share capital)
17th resolution (Delegation of authority granted to the Board of Directors for the purpose of issuing securities granting access to the Company’s share capital, with cancellation of preferential shareholder subscription rights, reserved for one category of entities, ensuring the underwriting of the Company’s equity securities)
19,042,849 shares (28 April 2010) 1 share (Date of the Registration
Authorisations for share issues granted by the Extraordinary Shareholders’ Meeting of 28 April 2010 16th resolution (Authorisation granted to the Board of Directors for the purpose of increasing the number of shares issued in accordance with 11th and 12th resolutions in the event of over-subscription to the share capital increase, with or without cancellation of preferential subscription rights)
Except for the delegations granted pursuant to the 17th and the 21st resolutions, which are granted for an eighteen (18) months duration, the delegations of powers granted by the Shareholders' Meeting of 28 April 2010 are each granted for a twenty-six (26) months duration as from the date of the Shareholders’ Meeting, i.e. until 28 June 2012, date on which it will be deemed expired if the Board of Directors did not use it.
In the context of the above mentioned buyback programme and this liquidity agreement were as follows: SCOR proceeded, during the financial year 2010, to:  the purchase of 4,150,990 treasury shares,
The tables hereunder detail the evolution of the trading rates of the operations on treasury shares as well as the allocation by objectives.
Number of shares purchased Number of shares sold January 2010 16.983 17.178 NA 171,985 244,291 February 2010 17.336 17.342 NA 161,706 207,881 March 2010 16.893 19.016 NA 281,501 334,913 April 2010 18.415 18.620 1,956.89 303,776 277,910 May 2010 15.953 15.544 6,822.32 760,481 347,509 June 2010 15.897 15.984 NA 422,457 307,873 July 2010 15.905 15.888 3,156.83 436,680 268,911 August 2010 16.487 16.644 NA 165,498 162,434 September 2010 17.511 17.604 3,091.53 527,788 391,406 October 2010 17.927 17.101 NA 290,769 305,053
Pursuant to the decision of the Extraordinary Shareholders General Meeting of the Company dated 28 April 2010, in its seventeenth resolution, to delegate to the Board the authority of issuing securities granting access to the Company’s share capital, with cancellation of preferential shareholder subscription rights, reserved for one category of entities, ensuring the underwriting of the Company’s equity securities, SCOR signed, on 10 September 2010, a natural catastrophe financial coverage facility in the form of contingent capital equity line with UBS. Under the transaction, SCOR will benefit from a contingent EUR 150 million equity line, which would be available in two separate tranches of EUR 75 million each. Drawdown on facility may result in an aggregate increase in the share capital of up to EUR 150 million (including issuance premium), in respect of which SCOR has entered into a firm subscription commitment with UBS.
 Section 21.1.4 - Amount of convertible seccurities, exchangeable securities or securities with subscription warrants.
(1) The estimated ultimate net losses are defined as the aggregation of the individual estimated ultimate net losses of all natural catastrophe events in a given calendar year. The individual estimated ultimate net loss is the estimated pre-tax impact of any qualifying natural catastrophe event, net of all recoveries (reinsurance and derivatives) and additional expenses as recorded in the Group books.
The voting right attached to shares is proportional to the portion of share capital they represent. During a period of two years from the reverse stock-split of the Company’s shares implemented on 3 January 2007, any Old Share gave the right to one vote and any New Share to ten votes, so that the number of votes attached to the shares shall remain proportional to the portion of share capital they represent.
The Shareholders’ Meeting which decides or authorises a capital increase may, under Article L. 225-135 of the French Commercial Code, eliminate the pre-emptive subscription right for the entire capital increase or for one or more segments of said increase and may allow or not allow a priority subscription period for shareholders. When the issue is
21.2.5 CONDITIONS FOR CALLING ANNUAL SHAREHOLDERS’ MEETINGS AND EXTRAORDINARY SHAREHOLDERS’ MEETINGS (ARTICLES 8 AND 19 OF THE BYLAWS)
Pursuant to articles L. 322-4 and R. 322-11-1 of the French Code of insurance, any operation 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, to increase, to decrease or to cease holding, directly or indirectly, as defined by article L. 233-4 of the French commercial
21.2.8 CONDITIONS GOVERNING MODIFICATIONS TO THE SHARE CAPITAL (OTHER THAN LEGAL PROVISIONS)
Refer to:  Section 20.1.6 – Notes to Consolidated Financial Statements – Note 25 : Commitments received and granted and Note 26 : Insurance and financial risk;  Sections 19.1 and 19.2 – Related Party Transactions;  Section 21.1.4. – Amount of convertible securities, exchangeable securities or securities with subscription warrants.
Like all Life reinsurers in the U.S. market, SCOR Global Life Rückversicherung AG (formerly Revios, absorbed by SCOR Global Life SA in 2007) has utilised offshore retrocession agreements in order to better manage its capital requirements, especially those imposed by the so-called Triple X regulations. When a U.S. ceding entity retrocedes risks to a non-U.S. reinsurance entity, U.S. legislation requires that a guarantee be provided for the benefit of the U.S. ceding company in order for it to reduce its statutory reserve liabilities. In the past, Revios has relied on the use of short term Letters of Credit (“LoC”) for this purpose.
Collateralised swap executed on 22 February 2008 between SCOR Global Life SE and JP Morgan Ventures Corporation, extended in 2009
Pursuant to the terms and conditions of an amendment executed on 30 November 2010, the maximum amount of the facility agreement was increased up to USD 575,000,000, the credit facility agreement entered into between the same parties on 24 July 2009 was terminated on same day. Moreover, since 30 November 2010, the issuance of SBLC is subject to (i) grant to Deutsche Bank a pledge over financial instruments composed of US treasury bills, (ii) issue a first demand guarantee amounting to USD 287,500,000 in favour of the bank.
Stand-by letter of credit facility agreement executed on 23 October 2008, between SCOR SE, SCOR Global P&C SE, SCOR Global Life SE, SCOR Switzerland AG and SCOR Rückversicherung (Deutschland) AG on one side and Natixis on the other side, as amended on 19 May 2010
Stand-by letter of credit facility agreement executed on 19 December 2008, between SCOR SE, SCOR Global P&C SE, SCOR Global Life SE, SCOR Switzerland AG on one side and CALYON on the other side, as amended on 26 July 2010
Under the terms of an agreement with SCOR SE, SCOR Global P&C SE, SCOR Global Life SE and SCOR Switzerland AG on one side and CALYON on the other side, CALYON has agreed to issue SBLCs to guarantee the reinsurance activities of the above mentioned companies up to a maximum of USD 200,000,000 in a form acceptable to the NAIC, as from 1 January 2009 until 31 December 2011.
The issuance of SBLCs under the terms of these agreements is subject to the execution by each entity of a pledge over a financial instrument account consisting of OATs or U.S. Treasury bills representing at least 50% of the amount of the SBLC.
Pursuant to the terms and conditions of an amendment executed on 26 July 2010, the beneficiaries to the letters of credit can be non U.S. and these letters can be labelled in currencies other than euro or U.S. dollar.
Under the terms of an agreement with SCOR SE, SCOR Global P&C SE, SCOR Global Life SE and SCOR Switzerland AG on one side and J.P. Morgan Europe Limited on the other side, J.P. Morgan Europe Limited has agreed to issue SBLCs to guarantee the reinsurance activities of the above mentioned companies up to a maximum of USD 250,000,000 in a form acceptable to the NAIC, as from 5 November 2010 until 31 December 2012.
Stand-by letter of credit facility agreement executed on 10 June 2010 between SCOR SE, SCOR Global Life SE and SCOR Global P&C SE, SCOR Switzerland AG, SCOR Rückversicherung (Deutschland) AG on one side and Société Générale on the other side
SCOR SE, SCOR Global Life SE, SCOR Global P&C SE, SCOR Switzerland AG and SCOR Rückversicherung (Deutschland) AG on one side and Société Générale on the other side executed, on 10 June 2010, a stand-by letter of credit facility agreement.
The document referred to in Article 222-7 of the general regulation of the AMF is incorporated in the Registration Document and is shown in Section 28 – Published Information. The information quoted therein is available for downloading from the following sites:  Autorité des Marchés Financiers (AMF):  Bulletin des Annonces Légales Obligatoires (BALO):  SCOR:  L’info financière:
As at 31 December 2010, SCOR held indirectly shares or units in the following companies, which represent at least 10% of the consolidated net assets or generate at least 10% of the consolidated net profit or loss.
Information published in the Bulletin des Annonces Légales Obligatoires (BALO) [Bulletin of required legal notices publications] (www.journalofficiel. gouv.fr/balo/index.php)
28.1 Information published on the Autorité des Marchés Financiers (AMF) website (www.amf-france.org) Date Subject 28 June 2010 Disclosure of trading in the Company’s shares by members of the Board of Directors (Médéric Prévoyance pour INPR)
28 June 2010 Disclosure of trading in the Company’s shares by members of the Board of Directors (Médéric Prévoyance pour MUT2M)
28.2 Information published in the Bulletin des Annonces Légales Obligatoires (BALO) [Bulletin of required legal notices publications] (www.journalofficiel. gouv.fr/balo/index.php) Date Subject 7 June 2010 Periodical publications – Approval of the financial statements for the financial year 2009 by the Ordinary Annual General Meeting of the Shareholders held on 28 April 2010 and allocation of income 10 May 2010 Other notices – Voting rights 12 April 2010 Notices of meeting – Notice of convening of the shareholders and securities holders to the Ordinary and Extraordinary General Meeting of the Shareholders of 28 April 2010 24 March 2010 Notices of meeting – Notice of meeting of the shareholders and securities holders to the Ordinary and Extraordinary General Meeting of the Shareholders of 28 April 2010
America, a rapidly growing Life reinsurance region 20 January 2011 SCOR successfully places CHF 400 million perpetual subordinated notes 13 January 2011 SCOR supports research into HIV through a partnership with the Pierre and Marie Curie University 11 January 2011 Half-year statement of the liquidity contract between SCOR SE and EXANE BNP Paribas 17 December 2010 SCOR finalizes the implementation of its innovative contingent capital solution 16 December 2010 2010 Actuarial Awards: SCOR supports the development of actuarial science in five European countries 16 December 2010 Launch of the SCOR Global Risk Center: an initiative to further the knowledge and science of risk 9 December 2010 SCOR extends its Atlas VI catastrophe bonds program 3 December 2010 Declaration pursuant to Article L.233-8 II of the French Commercial Code and Article 233-16 of the
General Regulation of the Autorité des Marchés Financiers 2 December 2010 SCOR has no exposure to the countries affected by the sovereign debt crisis 5 November 2010 SCOR confirms its strong momentum in the third quarter – Press release 3 November 2010 SCOR to back a new Lloyd’s syndicate - Press release 7 October 2010 Moody’s raises the outlook on SCOR’s “A2” rating to “positive” - Press release 6 October 2010 Disclosure of trading in own shares – From 8 to 9 September 2010 1st October 2010 S&P raises to “positive” the outlook on SCOR’s “A” rating - Press release 1st October 2010 SCOR is elected “Best Global Reinsurance Company” - Press release
October 2010 Letter to shareholders: Stong Momentum - SCOR's strategic plan for the period 2010-2013 13 September 2010 Global Reinsurance Forum remains actively engaged in the ongoing regulatory debate to secure the value proposition of reinsurance - Press release 10 September 2010 A.M. Best upgrades SCOR’s rating to “A” - Press release 10 September 2010 SCOR launches an innovative contingent capital solution to complement its capital shield strategy - Press release 8 September 2010 SCOR presents its strategic plan for 2010-2013: "Strong Momentum" - Press release 24 August 2010 Fitch upgrades SCOR’s rating outlook from “stable” to “positive” - Press release 6 August 2010 Disclosure of trading in own shares – From 29 to 30 July 2010
Press release 29 July 2010 SCOR announces the publication of its interim financial report for the six months ended 30 June 22 July 2010 SCOR records excellent half-year Non-Life treaty renewals - Press release 7 July 2010 Jean-Charles Simon is appointed Head of Group Communications and Public Affairs of SCOR, as well as Chief Economist - Press release 1st July 2010
Press release 28 April 2010 SCOR’s Combined General Meeting adopts all proposed resolutions - Press release 28 April 2010 SCOR Global Life Embedded Value reaches EUR 1.9 billion (EUR 10.8 per share) further demonstrating the franchise dynamism and profitability - Press release 28 April 2010 SCOR generates resilient results and confirms the Group’s capacity to absorb large shocks -
Press release 12 April 2010 ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ MEETING OF SCOR SE TO BE HELD
7 April 2010 SCOR obtains a composite reinsurance licence in China, enabling it to add Life & Health reinsurance services to its existing non-Life activities – Press release 1st April 2010
Diamondback Capital Management, LLC - Standard form for disclosing short positions pursuant to the AMF measures announced on 19 September 2008 in respect of the securities of financial institutions 28 April 2010 Press release - 2010-2011 Share Buyback program 28.5 Information published on the Info-Financières web site (www.info-financiere.fr/search.php.com) All press releases and offering circulars published on the AMF site (section 28.1) and on SCOR’s web site (section28.3) are simultaneously published on the Info-Financières’ website. No other information has been published on the InfoFinancières ’ website.
(ii) The corporate financial statements for the year ended 31 December 2008 and the Auditors’ Report pertaining thereto published on pages 286 to 324 and 325 to 327, respectively, of the registration document filed with the Autorité des Marchés Financiers on 5 March 2009 under number D. 09-0099.
This year, SCOR SE carried out the following transactions:  OCEANE bond redemption by EUR 184 million on 4 January 2010;  Sale of SCOR REINSURANCE ASIA-PACIFIC Pte to SCOR Global P&C SE at a price of EUR 260 million and with a realized gain of EUR 195 million;  Contribution of GENERAL SECURITY NATIONAL INSURANCE COMPANY CORP (GSNIC) to SCOR US CORPORATION at a price of EUR 103 million and with a realized gain of EUR 37 million;  Reversal of EUR 35 million of impairment recognized on SCOR SE's investment in SCOR US CORPORATION;  EUR 838 million partial redemption by SCOR SE of the treasury advance received from SCOR Global P&C SE;  EUR 248 million partial redemption by SCOR Global Life SE of the treasury advance given by SCOR SE;  Extension in the scope of business retroceded for underwriting years 2002 to 2005 inclusive, by SCOR Global P&C SE to SCOR SE through quota-share, resulting in an increase in assumed technical reserves by approximately EUR 400 million in SCOR SE;  Amendment to SCOR Global Life SE's quota-share with SCOR SE, whereby retrocession is computed from 1 January 2010 on the basis of the accounting year rather than by accounting years of cedant (all underwriting years concerned), as previously done ;  Deposit of EUR 16.7 million relating to the commitment to purchase a Company, subject to fulfillment of certain conditions, whose primary asset is an office building in Paris, a portion of which will be used by the Group and the remainder will be leased. At 31 December 2010, the purchase price has not been finalised, but is estimated to be approximately EUR 150 million. The purchase is expected to close in 2011.
Share of retrocessionaires in underwriting reserves Note 4 4 - 4 70
Unearned premium reserves (Non-Life) 2 - 2 2 Loss reserves (Non-Life) 2 - 2 68 Other underwriting reserves (Non-Life) - - - -
Reinsurance reserves (Life) 473 231 Loss reserves (Life) 157 147 Unearned premium reserves (Non-Life) 183 154 Loss reserves (Non-Life) 1,443 978 Other underwriting reserves (Non-Life) 419 389 Equalisation reserves (Non-Life) - Underwriting reserves for unit-linked contracts - -
Deferred commissions received from reinsurers (Non-Life) 1 1 Reinsurance estimates – Retrocession (1) 3 Other accruals Net translation adjustment - -
(1) Data for financial years 2009 and 2010 are before appropriation of results.
Leases from buildings purchased with finance lease - Letters of credit 664 403 Endorsements and sureties 8 8
Investment securities and assets acquired with commitment for resale - -
Other guarantees given to financial institutions - Contract termination indemnities 8 5 Foreign currency forward sales 325 179 Property leases - -
Investments are recorded at historical cost, excluding expenses. Investments are valued based on the asset category and the length of time over which they are expected to be held.
For real estate and financial (holding) companies, the fair value is calculated as the pro rata of the net assets increased for unrealised gains, net of tax. An impairment provision is recorded on a line-by-line basis when these values are less than historical cost.
No impairment is recognised for differences between net book value, as decreased or increased by the amortisation of any premium or discount, and the realisable value. An impairment provision is recorded only in the event of issuer default.
A liquidity risk reserve is recorded for the possible need to liquidate assets in order to make immediate payment on major claims. This reserve is included in underwriting reserves and is recorded when the total net book value of assets, excluding bonds and other fixed income securities (investments valued according to article R. 332-19 of the French Insurance Code), exceeds their fair value. The fair value corresponds to the market price for listed shares, the net asset value for unlisted shares and the net realisable value for investments in subsidiaries as described in Section 1.2.1.
 Updated mortality tables for the various plans, with turnover data for managers and salary increases
The retrocessionaires’ share in estimates of assumed premiums and commissions is shown in liabilities in account “Reinsurance estimates - retrocessions.”
A provision for increasing risk is recorded for long-term care and disability business. This risk increases with the age of the insured although the premiums are typically constant. It is equal to the difference between the discounted values of the respective commitments of the insured and insurer.
The foreign currency differences on off-balance sheet positions (forward financial instrument contracts) and the related off-balance sheet account represent unrealised foreign currency gains or losses. These differences are recorded on the balance sheet in the accounts “net translation adjustments” and “regularisation of forward financial instrument contracts”, based on the underlying strategy.
The use of and accounting for financial instruments comply with the French General Statement of Accounting Principles (“Plan Comptable Général”) of 1982 and French Decree 2002-970 dated 4 July 2002, relating to the use of forward financial instruments by French insurance companies.
Impact of foreign exchange on opening balances Acquisitions creations Disposals Closing balances
Shares in and advances to land and real estate companies 1
Unrealised gains and losses 1 – Real estate investments and real estate investments in process 154 153 211 58 2 - Shares and other variable-income securities (other than mutual fund shares) 4,076 3,607 5,013 1,406 3 - Mutual fund shares (other than those in 4) 7 7 7 4 - Mutual fund shares exclusively invested in fixed-income securities 4 4 4 5 - Bonds and other fixed-income securities 23 23 23 6 - Mortgage loans 7 - Other loans and similar bills 160 160 160 8 - Deposits with ceding companies 9 - Cash deposits (other than those in 8) and security deposits 5 5 5 10 - Unit-linked investments Sub-total 4,429 3,959 5,423 1,464 - Investment or divestment strategy - Anticipation of investment - Yield strategy - Other transactions 385 385 385 - - Amortisation premium/discount 12 – Total lines 1 to 11 4,814 4,344 5,808 1,464 a) including: - investments valued according to article R.332-19 23 23 23 - - investments valued according to article R.332-20 4,406 3,936 5,400 1,464 - investments valued according to article R.332-5 - Forward instruments 385 385 385 b ) including: - investments and forward instruments issued in OECD countries 385 385 385 - - investments and forward instruments issued in non-OECD countries 2.3 SUBSIDIARIES AND AFFILIATES
As at 31 December 2010, loans and advances granted by SCOR SE to its subsidiaries totalled EUR 161 million (including EUR 123 million to SCOR Global Life SE and EUR 35 million to GIE Informatique) compared to EUR 405 million as at 31 December 2009 (including EUR 371 million to SCOR Global Life SE and EUR 34 million to GIE Informatique).
Loans granted to SCOR SE by its subsidiaries totalled EUR 275 million (including EUR 102 million from SCOR Global P&C SE) compared to EUR 1,126 million as at 31 December 2009 (including EUR 939 million for SCOR Global P&C SE).
- SCOR GLOBAL LIFE SE EUR 282 901 99.99% 430 430 123 104 - 2,021 132 50 1, Avenue du Général de Gaulle 92800 PUTEAUX, France - SCOR GLOBAL P&C SE EUR 544 1,786 99.99% 1,465 1,465 - 94 - 1,611 131 - 1, Avenue du Général de Gaulle 92800 PUTEAUX, France - SCOR US CORPORATION USD 329 1,111 100% 1,314 850 - 1 - 731 28 - 199 Water Street, NEW YORK, NY 100383526 USA - SCOR AUBER S.A. (France) EUR 47 169 100% 149 149 3 44 - 26 12 16 1, Avenue du Général de Gaulle 92800 PUTEAUX, France - SCOR Holding Switzerland AG EUR 382 1,938 40.68% 788 788 - 4 - - 784(3) - General Guisan-Quai 26, 8022 Zurich, Switzerland - ASEFA S.A. EUR - 86 39.97% 5 5 - - - - 9 - Avda Manoteras 32 Edificio A 28050 Madrid, Spain - SCOR GESTION FINANCIERE S.A. EUR 4 4 100% 6 4 - - - - - - 1, Avenue du Général de Gaulle 92800 PUTEAUX, France - PREVOYANCE RE S.A. EUR 40 57 100% 41 41 - 2 - 69 5 - 1, Avenue du Général de Gaulle 92800 PUTEAUX, France -SCOR PERESTRAKHOVANIYE.O.O.O. RUB 7 9 100% 6 6 - - - 11 1 - 10 Nikolskaya Street, 109012, Moscow, Russian Federation - SCOR AFRICA LTD ZAR - -
(1) Data based on IFRS accounts. (2) SCOR guarantees in full, without limits as to amounts, the underwriting liabilities of its subsidiaries pertaining in particular to their obligations relative to the payment of claims. In return, SCOR GLOBAL P&C SE and
SCOR GLOBAL LIFE SE guarantee, on behalf and for the benefit of SCOR SE, the full and prompt performance of all of SCOR SE's payment obligations under all insurance, reinsurance and financial contracts entered into by SCOR SE.
(3) Net income for 2010 includes an internal dividend received of EUR 750 million. (*) OC: Original Currency
As at 31 December 2010, the number of shares held as treasury shares amounted to 6 427 554 shares (i.e., 3.42% of capital) for a total value of EUR 103 377 435. These shares were acquired in the context of anticipated awards to Company employees and officers as part of share allotment plans.
Shares other than variable-income securities and bonds 4,092 6 38 4,136 4,070 1 39 4,110
Liabilities arising from reinsurance operations 7 - - 7 54 - 2 56
 USD 100 million 30-year subordinated bonds issued on 7 June 1999, callable by SCOR SE quarterly as from the tenth year. These floating-rate bonds bear interest based on the 3-month Libor rate plus (i) 0.80% for the first ten years of the issue, and (ii) 1.80% thereafter.
 Initial EUR 100 million (EUR 93 million after repurchase of EUR 7 million during 2009) 20-year subordinated bonds, issued on 6 July 2000 callable by SCOR quarterly as from the tenth year following their issuance. These floatingrate bonds bear interest based on the 3-month Euribor plus (i) 1.15% for the first ten years, and (ii) 2.15% thereafter.
 Loans granted to SCOR by its subsidiaries, mainly SCOR Global P&C SE (cf § 2.3).
Reinsurance reserves (Life) 308 231 474 Loss reserves (Life) 124 147 157 Unearned premiums reserves (Non-Life) 163 154 183 Loss reserves (Non-Life) 793 978 1,443 Other underwriting reserves (Non-Life) 317 389 419 Gross underwriting reserves 1,705 1,899 2,676
The reinsurance activity of SCOR SE comprises two treaties, a quota share with SCOR Global P&C SE, another with SCOR Global Life SE; a facultative contract with Allianz which is 100 % retroceded to SCOR Global P&C SE; and the business underwriten by the Beijing branch.
Convertible debt Bank debt Negotiable instruments Other loans and deposits received 2 443 445
Reinsurance estimates ─ assumed ─ Life 385 648 - Reinsurance estimates ─ assumed ─ Non-Life 870 907 3 (1) Deferred acquisition costs ─ Non-Life 32 37 - 1
The share capital, comprising 187,795,401 shares with a par value per share of EUR 7.8769723 totalled EUR 1,479,259,172 as at 31 December 2010.
Contingency reserves amount to EUR 85 million, of which:  EUR 36.1 million for free share allotment plans with the following expiry: EUR 17 million at 2011, EUR 11 million at 2012, EUR 5 million at 2013, EUR 2 million at 2014.
8.1 BREAKDOWN OF PREMIUMS BY GEOGRAPHIC REGION (COUNTRY WHERE CEDANT IS LOCATED)
Commissions - assumed 236 191 Commissions - retroceded 1 (2) TOTAL 237 189
Revenues from real estate investments 9 - 9 16 - 16
Dividends received from subsidiaries total EUR 65.7 million and include: SCOR Global Life SE EUR 50 million and SCOR Auber SA EUR 15.7 million.
The sale of GSNIC shares to SCOR US CORPORATION generated a gain of EUR 37.4 million and the sale of SCOR REINSURANCE ASIA PACIFIC to SCOR Global P&C a gain of EUR 195 million.
Currency losses were EUR (13.9) million in 2010 compared to a loss of EUR (2.6) million in 2009.
NOTE 10 ANALYSIS OF GENERAL EXPENSES BY KIND AND NON RECURRING RESULT
 reserve for tax purposes ("provision pour investissement") EUR (0.8) million
SCOR SE, as a stand alone company has a tax deficit. The corporate tax gain of EUR 24.8 million relates to:  the contribution of subsidiaries that are consolidated for tax purposes by EUR 38.2 million ;  Credit taxes by EUR 0.5 million ;  Taxes from branches of EUR (13.9) million.
By application of Articles L.225-181 and R 225-137 of the French Commercial Code, the Company adjusted the price of the shares corresponding to options granted and the number of shares linked to options following the capital increases of 31 December 2002, of 7 January 2004 and of 12 December 2006. Thus, according to the provisions of Article R 22891 of the French Commercial Code, the adjustment applied equalises, to the nearest hundredth of a share, the value of shares that will be received if the rights attached to share subscription and purchase options are exercised after the capital increase, while retaining the preferential subscription right, of the Company decided on 13 November 2006 and the value of the shares that would have been obtained in case those rights were exercised prior to said capital increase.
In addition, on 3 January 2007, the company carried out a reverse stock split of shares comprising the capital of SCOR SE with the exchange of one new share with a par value of EUR 7.8769723 for 10 old shares with a nominal value of EUR 0.78769723 per share.
There are no stock option plans providing for the purchase of or subscription to shares in Group subsidiaries.
In 2009, a total of 151,147 rights of options were exercised. 109,482 rights of options were exercised under the stock option plan of 25 August 2004, vested on 26 August 2008; and 41,665 options were exercised under the stock option plan of 16 September 2005, vested on 17 September 2009.
The amount of 2010 profit-sharing payouts have been estimated in the accounts and set aside for EUR 1,179,303.
The number of hours accrued by the employees of SCOR SE was 13,698 on 1 January 2010.
Commitments received Commitments given In EUR million 2009 2010 2009 2010
Exchange rate hedges generated an unrealised loss of EUR 1 million.
Total commitments received from banks relating to the WTC amount to EUR 21 million.
In consideration of its commitments relating to technical reserves, SCOR SE has granted letters of credit in the amount of USD 35 million (EUR 27 million) to cedants of which USD 28 million (EUR 21 million) in favour of Allianz for the WTC claim, compared to EUR 664 million in letter of credit capacity received from banks.
Group, net of retrocession and before tax, are close to EUR 100 million for the Australian events of 2011 and another EUR 100 million for the second New Zealand earthquake. For the natural catastrophe losses impacting the Australian or New Zealand markets, the Group is protected by an external retrocession programme that kicks in in excess of USD 185 million per occurrence.
Due to the timing and nature of these events, SCOR SE is unable to produce a precise estimate of the financial impact expected during 2011.
These annual financial statements have been approved by the Board of Directors at their meeting on 7 March 2011. Our role is to express an opinion on these financial statements, based on our audit.
In our opinion, the financial statements give a true and fair view of the assets; liabilities, financial position and result of the company at 31 December 2010, in accordance with the accounting rules and principles applicable in France.
Our audit work consisted in assessing the data and assumptions on which the estimates are based, in reviewing the company’s calculations, in comparing estimations from prior periods with actual outcomes, and in examining senior management’s procedures for approving these estimates.
 Notes 1.2, 1.10, 1.12, 2 and 15.1.1 to the annual financial statements describe the principles and methods used to estimate the valuation and impairment of investments and derivative instruments.
We have no matters to report regarding:  the fair presentation and the conformity with the financial statements of the information given in the directors’ report and in the documents to the shareholders with respect to the financial position and the financial statements;  the fair presentation of the information given in the directors' report in respect of remunerations and benefits granted to the relevant directors and any other commitments made in their favor in connection with, or subsequent to, their appointment, termination or change in current function.
This report has been approved by the Board of Directors on 7 March 2011.
The Board of Directors is composed of 15 Directors: Denis Kessler, Chairman of the Board, Carlo Acutis, Gérard Andreck, Allan Chapin, Peter Eckert, Daniel Havis, Daniel Lebègue, André Lévy-Lang, Monica Mondardini, Luc Rougé, Guillaume Sarkozy (as representative of Médéric Prévoyance), Herbert Schimetscheck, Jean-Claude Seys, Claude Tendil and Daniel Valot, and one non-voting Director: M. Georges Chodron de Courcel. Amongst these 16 members of the Board, 10 are independants: Carlo Acutis, Gérard Andreck, Peter Eckert, Daniel Lebègue, André Lévy-Lang, Monica Mondardini, Herbert Schimetscheck, Jean-Claude Seys, Claude Tendil and Daniel Valot.
In compliance with the recommendations stated by the government code, an assessment of the Board of Directors was conducted in 2010. Mr André Levy-Lang, an independent Director, addressed a questionnaire to the Directors in February 2010. This questionnaire concerned the composition of the Board, its functioning and the functioning and composition of the Committee’s Boards. All the Directors, without exception, completed the questionnaire. Mr André Levy-Lang assessed the questionnaires and presented his summary report during the Board Meeting that took place on the 2 March 2010.
An informal assessment has been performed during 2010 by the Compensation and Nomination Committee. Such assessment concluded to a global improvement of the items mentioned during the 2009 assessment.
During its meeting held on 28 July 2010 and 4 November 2010, the Compensation and Nomination Committee deeply reviewed the composition of the Board and of the Committees in the framework of the duties ending on 2011. In particular, it expressed its will that the future Board be reduced in size, younger, more feminine, with more diversified competences and continues to be international.
A list of the members of the Company’s Board of Directors in 2010 features in the table below: Name Age Citizenship Date of 1st appointment End of duty Renewals dates
G. Chodron de Courcel, Non voting Director 60 French 15/05/2003 2011 31/05/05-24/05/07 15/04/2009
(1) Antonio Borgès is no longer Director since 5 November 2010. (2) Guillaume Sarkozy represents Médéric-Prévoyance, member of the Board.
For historical reasons, the duties of the entire Directors end at the Shareholders’ meeting to be held on 4 May 2011. In these circumstances, the Board of Directors chose a simultaneous renewal of almost all of its members, in order to allow a full rethinking of its composition in the light of the new corporate governance rules. Duties of 6, 4 and 2 years will be proposed to the vote of the Shareholders’ meeting of 4 May 2011, in order to comply with the AFEP-MEDEF Code and to progressively a system of renewal by third.
At least five days before any meeting of the Board of Directors, the Chairman and Chief Executive Officer is required to submit a file to the Directors containing all information that will allow them to participate in the discussions listed on the agenda, and notably any useful information upon the financial situation, the treasury situation and the liabilities of the Company, in a discerning and efficient manner. Furthermore, outside of Board meetings, the Chairman and Chief Executive Officer is required to submit any necessary information and documents to the Directors to complete their duties, and the Directors may submit requests for information to the Chairman and Chief Executive Officer. In addition, Directors may ask the Chairman and Chief Executive Officer to invite the major executives of the Company to attend Board meetings.
Pursuant to the provisions of Articles L. 225-37 and R. 225-21 of the French Commercial Code, the Internal Regulations allow the Board to hold its meeting by videoconference or via telecommunications, providing that the identification of the participating Board members can be determined.
The application of the notion of director independence is assessed on the basis of the following primary criteria, derived from the recommendations of the AFEP/MEDEF report. An independent director: 1 must not currently be or have been within the last five years an employee or corporate officer of SCOR; The corporate governance code of listed corporations of AFEP/MEDEF also considers that, in order to be qualified as independent, a Director must not be or have been within the last five years an employee or corporate officer of a company consolidated by the parent company.
However, SCOR considers that an external Director, member of the Board of Directors of SCOR as well as member of the Board of Directors of subsidiaries of SCOR (such as SCOR Holding (Switzerland), SCOR Reinsurance Company, SCOR Global Life Rückversicherung Schweiz AG, SCOR Switzerland AG or SCOR Reinsurance Asia Pacific PTE) who satisfies all the other criteria shall be considered as being independent.
7 must not have been a Director of SCOR for a period exceeding twelve years; 8 must not represent a shareholder of the Company owning more than 5% of the share capital or voting rights.
Carlo Acutis Yes Yes Yes Yes Yes Yes Yes Yes Yes
Guillaume Sarkozy (1) Yes Yes Yes Yes Yes Yes Yes Yes Yes
Daniel Valot Yes Yes Yes Yes Yes Yes Yes Yes Yes (1) Representing Médéric Prévoyance, Director
He convenes the independent Directors as often as needed and at least once a year.
The Internal Regulations require that candidates for Director inform the Board of the position they currently hold as Director or Officer in other entities in France and other countries, as the Board has the duty to ensure compliance with the rules regarding the accumulation of position as Director. Once appointed, Directors must inform the Board of any appointment they hold as a company officer within a period of five days following the event. Finally, Directors must inform the Board of the position they have held as Director in other entities during the course of the financial year within a period of one month following the end of this financial year.
Information concerning the positions held by the SCOR Directors is provided in Section 14.1.1 Information concerning the members of the Board of Directors.
Through the Board Internal Regulations, each Director undertake not to seek or accept any function, benefit or situation from the Company or from the Group, directly or indirectly, that could jeopardize his independence of analysis, judgement or action, during the course of his functions as Director. He will also dismiss any direct or indirect pressure from other Directors, specific group of shareholders, creditors, suppliers or other third party.
During the course of the financial year 2010, the Company’s Board of Directors held ten meetings on the following dates:  28 April, two Board Meetings, the first preceding the Annual General Meeting and the second following it ; The average attendance rate of the members of the Board was 86%.
The following table displays the attendance of the members of the Board of Directors during 2010: Board members Attendance rate (%)
Daniel Valot 100 (1) Antonio Borges is no longer a Director since 5 November 2010 (2) Monica Mondardini is Director since 28 April 2010
The Strategy Committee is composed of Denis Kessler, Chairman, Carlo Acutis, Gérard Andreck, Antonio Borgès (until 5 November 2010), Allan Chapin, Georges Chodron de Courcel (Non-Voting Director), Peter Eckert, Daniel Havis, Daniel Lebègue, André Lévy-Lang, Monica Mondardini (since 28 April 2010, date of her joining the Board), Guillaume Sarkozy (as representative of Médéric Prévoyance), Jean-Claude Seys, Herbert Schimetscheck, Claude Tendil and Daniel Valot, appointed by the Board of Directors and selected among the members of voting and non-voting Directors. The term of their mandates coincide with their term of office on the Board of Directors.
On 4 November 2010, the Internal Regulations of the Strategy Committee was modified by the Board of Directors.
The average attendance rate of the Committee Members was 83.33%. The following table states the attendance rates of the members of the Strategy Committee in 2010: Board members Attendance rate (%)
Daniel Valot 100 (1) Antonio Borges is no longer a Director since 5 November 2010 (2) Monica Mondardini is Director since 28 April 2010 2. The Audit Committee
The Audit Committee is composed of Daniel Lebègue, Chairman, André Lévy-Lang, Antonio Borgès (until 5 November 2010) and Daniel Valot. Each of its member is independent. According to its Internal Regulations, the Committee comprises between three and five members appointed by the Board of Directors of the Company and selected among the members of voting and non-voting Directors and, in compliance with the AFEP and MEDEF corporate governance code of listed corporations of December 2008, it is composed of a majority of independent Directors. The term of their mandates coincide with their term of office on the Board of Directors.
The Chairman of the Committee may convene any individual likely to provide relevant information for a clear understanding of a given point; the presence and information provided by this individual being limited to the relevant items on the agenda. The Internal Regulations of SCOR’s Audit Committee, has been approved by the Board of Directors of the Company on 18 March 2005 and modified by the Board of Directors on 4 November 2010.
The Chairman of the Committee may convene any individual likely to provide relevant information for a clear understanding of a given point; the presence and information provided by this individual being limited to the relevant items on the agenda. The Internal Regulations of SCOR’s Compensation and Nomination Committee, has been approved by the Board of Directors of the Company on 18 March 2005 and modified by the Board of Directors on 4 November 2010.
The average attendance rate of the Committee Members was 95%. The following chart states the attendance of the members of the Compensation and Nomination Committee in 2010: Board members Attendance rate (%)
The Risk Committee members are Antonio Borgès (until 5 November 2010), Peter Eckert, Chairman, Daniel Havis, Daniel Lebègue, André Lévy-Lang, Guillaume Sarkozy (as representative of Médéric Prévoyance), Jean-Claude Seys and Daniel Valot.
The Committee is responsible for highlighting the main risks to which the Group is exposed, regarding both assets and liabilities and for ensuring that the means put in place to monitor and manage those risks have been effectively implemented. It examines the Group’s risks and the Group’s ‘Enterprise Risk Management’ (ERM) policy. The Committee met four times in 2010, primarily to discuss the following matters: analysis of the main exposures of the Group (in particular pandemia), risk appetite, retrocession policy and coverage, solvency and contemplated Solvency II, internal model of assets and liabilities and capital allocation management, standards and guidelines for assets management, internal control and Directors’ and Officers’ liability insurance.
Daniel Valot 100 (1) Antonio Borgès is no longer Director since 5 November 2010.
(f) Principles and rules stated for the determination of compensation and in-kind benefits for corporate officers
The data on compensation for corporate officers appears in Sections 15 – Remuneration and benefits – and 17.2 – Information on shareholding and stock options or company stock purchases by members of administrative and management bodies.
Every year, the conditions of remuneration for corporate officers and Directors are made public through the documents released for the Annual General Shareholders’ Meeting. The General Shareholders’ Meeting that took place on 31 May 2005 set the Directors' fees at a maximum of EUR 960,000 per year. This limit has not been changed since this date. Within the limits of this amount and upon the submission of the Compensation and Nomination Committee, the Board of Directors fixed the conditions of the allotment, in order to encourage the attendance of the Directors. It was thus decided to award the Directors' fees, payable to each voting or non-voting Director as a fixed part, equal to EUR 20,000, payable in fourths and another part based on attendance by voting and non-voting Directors, amounting to EUR 1,700 per meeting and participant. The payment of the Directors fees is made at the end of each quarter. Moreover, each Director received in 2010 the single sum of EUR 10,000 that must be used to purchase Company’s shares, that the Director commits to keep until the end of his appointment. The paid amounts have been properly used to that effect.
No retirement contribution (or commitment) has been paid for the benefit of the Directors.
Following the recommendation of the Compensation and Nomination Committee, the meeting of the Board of Directors on 9 February 2010 decided that the Chairman and Chief Executive Officer:  will receive a fixed gross annual sum of EUR 1,200,000, payable in twelve monthly instalments; and
 50% on the basis of the achievement of financial objectives, defined annually at the beginning of each year by the Board of Directors of the company on the recommendation of the Compensation and Nomination Committee.
For 2010, the variable compensation of the Chairman and Chief Executive Officer has been determined according to the following criteria:  personal criteria: preparation for the enforcement of Solvency II, reinforcement of the ERM and finalisation of the internal model ; continuation of an active policy of increasing the value of the Group in the opinion of the investors and analysts; deepening of the employees management policy; consolidation of the Group's commercial positions; general management;  financial criteria: Return on Equity (RoE) achieved by SCOR.
In the case of departure during financial year n:  all the variable part of his compensation for year n-1 will be payable during year n as soon as the Company’s financial statements for year n-1 are settled by the Board of Directors;  in addition, in the case of dismissal, the amount of the variable part of his compensation for year n will be (i) determined on the basis of the variable compensation for year n-1 and prorated on the basis of the departure date for the current year n, and (ii) paid as soon as the Company’s financial statements for year n-1 are settled by the Board of Directors.
The Company did not consider it necessary to make this information public directly after the meeting of the Board of Directors, during which these decisions were made. This information is released each year when the Registration Document is made available.
An allotment of 125,000 shares subscription options to the benefit of the Chairman and Chief Executive Officer was decide by the same Board of Directors, upon authorisation granted by the Extraordinary general meeting of the Shareholders on 15 April 2009, and upon the recommendation of the Compensation and Remuneration Committee of 9 February 2010. The exercise of these subscription options is subject to the satisfaction of the same performance conditions as those of the performance shares. The Chairman and Chief Executive Officer shall retain 10% of the shares
due to the execise of the options in the registered form until he ceases to hold his duties of corporate officer of the Company.
As the Company representative, the Chairman and Chief Executive Officer is granted with a company car with a driver. The insurance, maintenance, fuel and all costs related to the driver are paid by the Company.
Moreover, the Chairman and Chief Executive Officer receives benefits in kind, of the following nature: (a) a health insurance policy under the terms of a contract dated 16 September 1988; (b) an “all causes” death or permanent disability insurance policy for Company Executives, dated 30 June 1993. The Company is currently re-negotiating this contract and it is specified that the Chairman and Chief Executive Officer will benefit from any policy that may replace the existing policy; and
At its meeting on 18 April 2002 and in compliance with Article L. 225-51-1 of the French Commercial Code and Article 16 of SCOR’s bylaws (“Executive Management”), the Board of Directors of the Company decided that the management of the Company will be carried out under his responsibility by the Chairman of the Board of Directors, with the title of Chairman and Chief Executive Officer, who may be assisted by a Deputy Chief Executive Officer.
This report was prepared with the contribution of the Group Risk Management Department, the risk management departments of the operating companies, the Group Internal Audit Department, the General Secretary’s Department and the Finance Department. It was presented to the Audit Committee on 3 March 2011 and approved by the Board of Directors of the Company on 7 March 2011.
 The Finance Department includes the Group Corporate Finance and Financial Communications Department, the Group Treasury Department, the Group Financial Planning & Analysis Department, the Group Accounting & Consolidation Department, the Group Tax Department and the Investment Accounting Department.
Each of the two reinsurance companies includes functional departments, including a dedicated Risk Management Department.
Each Hub includes the following functions: a Legal and Compliance Officer, a Head of Information Systems, a Head of Finance, a Head of Human Resources and a Risk Manager.
Within this environment, control responsibilities are exercised as follows:  SCOR’s Board of Directors relies on the Audit Committee and the Risk Committee to exercise its control responsibility over the objectives it has set for the Company;  SCOR’s Executive Committee defines the procedures for implementing the strategy decided by the Board of Directors, the underwriting policy, the financial policy, the retrocession policy, and the claims management policy. It meets on a weekly basis and is currently made up of the Senior Managers of the Group: the Chairman and Chief Executive Officer of SCOR, the Chief Executive Officer of SCOR Global P&C and his deputy, the Chief Executive Officer of SCOR Global Life and his deputy, the Chief Executive Officer of SCOR Global Investments, the Chief Risk Officer, the Chief Financial Officer, and the Chief Operating Officer. SCOR is represented in the governance bodies of its principal subsidiaries. Eventually, SCOR’s Board of Directors, following a recommendation made by the Compensation and Nomination Committee, has decided to appoint independent directors of SCOR in each of the principal foreign subsidiaries;  the Group departments and functional or transversal departments of SCOR Global P&C, SCOR Global Life and SCOR Global Investments invested 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 part c) of this report on control activities;  the Hubs’ support departments, the operational entities of SCOR Global P&C and SCOR Global Life and the operational departments of SCOR Global Investments 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 Group Internal Audit Department eventually checks independently the effectiveness and relevance of the internal control procedures for all the Group’s entities whatever the area following a methodical risk based approach.
 appointment of global process owners (GPO) at the 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 controls on a local level based on the defined global process and to ensure application of risk based control activities,
Group standards and Registration documents To be in line with the ERM and internal control approach, SCOR has created Group standards or has revised existing local documents in order to create Group references.
To embed these Group Policies and other legal & compliance topics into the organization, training has been undertaken in a broad range of formats, including workshops, panel discussions, learning-over-lunch session and e-learning.
The Information Charter, which describes the importance of information for SCOR’s Paris entities and establishes the framework for using information systems, has been revised to become a Group reference (“SCOR IT Policy”) and approved by the Executive Committee. It especially sets forth the applicable security measures and the legal considerations involved in using information technology resources. The other purposes of this Charter are to avoid misuse of professional and personal information and to guarantee compliance with the confidentiality of said information.
More than 30 sessions were held so far and more than 700 employees participated in total in those training initiatives.
When approved, these documents are made available to Group employees on the SCOR intranet on a dedicated page where Group policies are all grouped together.
The methodology of this process is based on a large number of interviews carried out by members of the risk management departments in the different companies and functional departments of SCOR with members of the Executive Committee, other senior managers and subject matter experts. The risks identified during the interviews are analysed and grouped into three different categories according to their importance, with mention, if possible, of the action underway or to be recommended. This complete review is carried out once a year.
Emerging risks are subject to a specific process of identification and analysis. A dedicated collaborative site has been created on the Group’s intranet allowing designated observers, who are experts in their field, to collate market information, articles or studies on topics that might constitute emerging risks. In addition, a special email address allows all Group employees to submit information. This information is processed by a Committee composed of members of the Group Risk Management Department, Group acturial function, SCOR Global P&C Risk Management Department, SCOR Global Life Risk Management Department, Group Legal Department and Group Competitive Intelligence unit which is hosted by the Information Systems Department.
Furthermore operational risks are being identified, listed and assessed within each critical process and appropriate measures implemented. This includes the assessment of reporting and compliance risks.
i) activities related to reinsurance, ii) asset management, iii) accounting management, iv) Central functions.
The formalisation is being revised in accordance with the new Group standards.
The operating and control procedures concerning underwriting, pricing, administration of reinsurance contracts and claims management are validated by SCOR Global P&C and SCOR Global Life and are applied to all underwriting segments of the company in question, regardless of location. The following steps strengthen internal controls in this area:  SCOR uses an internal model for determining economic capital managed by the Group Financial Analysis & Risk Modelling Department of the Group Risk Management Department, necessary to implement its underwriting and asset management policies. Economic capital is allocated to SCOR Global P&C and SCOR Global Life and constitutes the reference for deciding and verifying the profitability expected from each of them;  Most of the business underwritten by SCOR Global P&C is renewed on agreed dates. This situation enables SCOR to establish annual underwriting plans, both qualitative (description of the environment) and quantitative (activity budget). These plans are approved by the Group Comex. Concerning SCOR Global Life, business is underwritten along the year. As a result, the notion of underwriting plan is different. The plan is a multiyear plan and is updated on a quarterly basis with the business actually underwritten;
 The Group Retrocession Department establishes and implements the external retrocession plan for P&C and Life activities. This department is responsible for its proper application, for monitoring the solvency of the retrocessionaires, the related counterparty risks and, when necessary, for the collection of balances due.
 in 2008, SCOR Global Investments was specially created to manage all of SCOR’s financial assets and obtained on May 15th, 2009 approval from the French financial market regulatory body (AMF) as an asset management company. To this end, the management and control procedures have been revised and investment decisions are implemented by SCOR Global Investments in accordance with the directives of the Group Investment Committee and with the investment guidelines. The Group Investment Committee meets at least once every quarter. Its role is to coordinate tactical asset allocation on a Group level and to supervise the application of objectives by the asset management company, observing the constraints established;  a regular reporting allows SCOR to monitor the management of assets entrusted to SCOR Global Investments;  the investment portfolios managed by external service providers are reviewed during quarterly investment committees, attended by the external fund managers, the Senior Managers of the subsidiary in question and representatives of SCOR Global Investments;  the information systems used by SCOR Global Investments monitor transactions on publicly traded securities (audit trail, valuation of securities). Assets owned by all Group entities are since 2009 monitored in one central information system and the accounting tools implemented in Paris in 2008 are being deployed in the Group’s principal subsidiaries. Risk monitoring tools are being deployed as well;  a head of Compliance and Internal Control was appointed in 2009 in order to meet the requirements of the regulatory body. His role is to implement an effective internal control programme which covers all activities relating to financial asset management.
Financial communication: The establishment and centralisation 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 Group Corporate Finance & Finance Communications Department, which respects a formalised process. Financial information intended for rating agencies is the responsibility of the Group Corporate Finance & Finance Communications Department. All of this information is ultimately controlled by General Management.
The Corporate Communications Department systematically and simultaneously publishes regulated information, including press releases, via a professional host included in the official list published by the AMF and on SCOR’s website (www.scor.com).
Internal communication: SCOR strives to make all documents deemed important available to all SCOR employees (or to certain categories if necessary) on SCOR’s intranet.
The Group Risk Management Department monitors the documentation and formalisation status, according to Group standards, of the processes deemed critical.
The processes described below concerning reinsurance accounting and calculation of technical reserves, which are within the single technical information system (OMEGA), are being applied by Group entities. A high level of control already exists in Omega. Its reengineering which has been decided as a strategic project in July 2010 by the Board of the Group and by the Executive Committee will even reinforce this strong internal control.
At the end of 2009 SCOR decided to finalise its information systems integration by launching a Group wide “one ledger” project. The intial phases of this project of defining the business requirements and developing a detailed design have been completed. The conclusion of the project will provide a complete finance system integration by promoting consistency, quality visibility and control with the use of one general accounting software and one chart of accounts for the Group.
Control of the quarterly consolidation procedure under IFRS is provided in particular through:  use of a market recognised consolidation software package ("SAP BFC”) and common to all Group entities, which ensures the whole consolidation process through automated and formalised controls;  the formalisation of the reconciliations between the systems or auxiliary accounting methods with the general and consolidation accounting systems;
In addition, and without calling into question the implementation of internal control rules by SCOR and its managers, General Management requests, within the framework of the reporting and quarterly consolidation procedure, that all local managers of Group entities, as well as Senior Managers of SCOR Global P&C and SCOR Global Life, make a specific quarterly statement to the Chairman and Chief Executive Officer, and to the Group Chief Financial Officer in the management representation letters as to the reliability and fair presentation of the accounts of the entities they manage and the effectiveness of the internal controls. The results are analysed and monitored by a committee including the General Secretary of SCOR, the Group Accounting Director, the accounting departments of SCOR Global P&C and SCOR Global Life, and the Head of the IFRS Centre of Excellence. The key points are communicated to the Executive Committee.
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. The numerous intiatives launched in 2010 in the field of compliance issues as well as the roll-out of the Group policies at solo level through the Hubs illustrate this will and significantly contribute to the Group’s last improvements in terms of control.
III. Statutory auditors’ report, prepared in accordance with article L. 225-235 of the Commercial code, on the report prepared by the Chairman of the Board of Directors of SCOR SE This is a free translation into English of a report issued in French and it is provided solely for the convenience of English speaking users. This report should be read in conjunction with and construed in accordance with, French law and professional standards applicable in France.
Statutory auditors' report, prepared in accordance with article L. 225-235 of the French Commercial Code (code de commerce), on the report prepared by the Chairman of the Board of Directors of SCOR SE
Consumption of water, raw materials, and energy in 2010:  Water consumption : 15,515 m3
Air emissions:  Generation Station was renovated in 1998, covering combustion and emissions, in accordance with the provisions of the Order of July 25, 1997 defining general recommendations applicable to facilities classified for the protection of the environment and the applicable standards;  Four closed air-cooling towers, treated in accordance with the applicable standards to combat legionnaires’ disease;  Air conditioning plants using ultra-sound humidifiers (no noise) treated against legionnaire’s disease equipped with filters;  Regular anti-bacterial analyses carried out by a control office;  Implementation of the “ECOVENT” system on electricity generation groups in order to limit emissions of motor oil particles into the air.
 Removal of industrial waste (obsolete IT components, oil) by a specialised supplier
 Implementation of selective waste sorting (oils, wood, gravel, soiled barrels, food, paper, toners, batteries) with an attestation of destruction; Aerial emissions of greenhouse gases, substances contributing to acidification, eutrophisation or photochemical pollution or long-lasting organic compounds:  Recovery of gas (heat pumps, cold chambers, etc.) for reprocessing with proof of recycled materials;  Continuation of the programme to replace HCFC compressors running at R22 with equipment that operates with replacement gases for HFC;  Campaign to replace heat pumps operating at R22 by devices using R 407C;  Preventive campaign: annual control for gas leaks by certified technicians;  Limitation of Greenhouse gas emissions and use of fossil energy (fuel) through modification of our electricity supply contract: termination of “EJP” contracts.
The sum of all risks which are correlated such that a single insured event will affect theses risks or all the underwritten lines relating to the same risk.
The most conventional form of credit derivatives, allows one side to buy the protection against the default of its counterparty by regularly paying a third part a premium and receiving from it the pre-determined amount in the event of default.
Credit insurance provides insurance coverage against loss to a supplier caused by customer failure to pay for goods or services supplied. Surety insurance relates to sureties and guarantees issued to third parties for the fulfilment of contractual liabilities.
A financial instrument or other contract the three following characteristics: a) value changes in response to a change in the underlying (e.g. interest rate, price, foreign exchange rate); b) requires no or minimal net investment, and c) is settled at a future date.
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 less cost of capital and administrative expenses.
Aggregation of claims having a common origin and affecting either a single insured under more than one policy, or more than one insured.
Goodwill comprises the residual difference between the identifiable assets of an acquired entity and the purchase price paid in a business combination. Goodwill is recognised as an asset in the balance sheet, and represents future economic benefits expected to be generated from assets that are not capable of being individually identified and separately recognised. Goodwill is tested for impairment on a yearly basis.
Actual and estimated premiums to be received for the period from the ceding companies. Gross premiums represent the turnover for the accounting period.
Amount that a Life insurance or capitalisation company must set aside and capitalise in order to meet its commitments to the insured.
A provision in an excess of loss reinsurance contract, particularly catastrophe and clash covers, that provides for reinstatement of a limit that had been reduced by the occurrence of a loss or losses. The number of times that the limit can be reinstated varies, as does the cost of the reinstatement.
All the clauses included in the reinsurance treaty. In economic terms, “reinsurance conditions” cover the rates established for the commission, the share in profits, the frequency of presentation of accounts and payment of interest on the deposits, or on the absence of deposits, which together determine the reinsurers’ probable profit margin.
The total reinsurance business (Treaty and Facultative) written and managed by a reinsurance company.
The rate of interest that remunerates assets with no counterparty risk. Usually, interest rate of treasury bills (T-bills) and government bonds of the best rated governments around the world are considered as proxies for the risk-free (interest) rate.
Decision by an insurer or a reinsurer to accept to cover a risk upon collection of a premium.
This refers to life reinsurance portfolios acquired in a business combination. It is calculated as the present value of the stream of expected future cash flows including estimates of the future technical results, the future investment income less future administration expenses. The present value calculation is based on assumptions and risk discount factors relevant at the date of acquisition. VOBA is amortised over the lifetime of the underlying reinsurance portfolio and is subject to impairment testing as part of the LAT.
Information concerning plans to reduce the number of employees and protect jobs, reclassification efforts, reemployment, and support measures
Manner in which SCOR takes into account the territorial impact of its activities in terms of employment and regional development
Relations between the company and integration associations, teaching establishments, environmental defence associations, consumer associations and neighbouring residents
The total of financial assets of SCOR SE is EUR 3,959,047,334.
The shareholders' equity of SCOR SE is amounting to EUR 2,503,299,167 and other equities are amounting to EUR 313,945,931. The debts amounted to EUR 679,193,207 including other loans of EUR 444,982,638.
The reinsurance result of SCOR SE as at 31 December 2010 is EUR 76,101,976 while the financial result is EUR 217,690,183.
For additional information on the operating and financial situation of SCOR SE and its subsidiaries, as well as on their activities’ development in 2010, please refer to Section 9, Section 20 and Appendix A of the Registration Document.
Pursuant to Article 223 quater of the French General Tax Code, we remind you that the amount of the expenses and charges referred to in Article 39.4 of said Code totals EUR 110,230 for the previous fiscal year and the amount of taxation borne by the Company due to the non-deductibility of such charges should amount to a total of EUR 37,952.
Pursuant to the provisions of Article R.225-102 of the French Commercial Code, the following table presents a summary of SCOR SE operating results during each of the last five financial years: I. - Financial position at the end of the year : c) Number of convertible bonds to shares. 10,470,000 10,470,000 10,470,000 10,765,428 0
II. - Global Profit and loss of effectives transactions : b) Net Profit before taxes, depreciations and reserves. (3) (88) (62) (258) 184 d) Net Profit after taxes, depreciations and reserves. 68 28 (64) 199 204
IV. - Salaries : c) Amount of paid employees benefits (Healthy contribution, others benefits, etc.). 7 6 11 12 21(2)
Over the three (3) previous fiscal years, the amounts distributed by SCOR SE as dividends were as follows: Fiscal year ended on: 31/12/2007 31/12/2008 31/12/2009
2. Fluctuation of SCOR SE quotation throughout 2010 The following statements present the volume of transactions and the fluctuation of SCOR SE quotation on the Euronext Paris stock market by Euronext NYSE throughout the financial year 2010: TOTAL OF TRANSACTIONS EXTREME MARKET PRICE
The total number of employees increased from 1790 as of 31 December 2009 to 1,822 as of 31 December 2010. The distribution of personnel is uniform over the various geographical areas to meet strategic principles of the Group.
3.2. Distribution of the personnel in France by type of contract In terms of contract types, the Group's personnel members in France are divided as follows: Key figures 2010
Total personnel on 31 December 562 265 Of which FTC 7 12 Temporary (in person/years) 2010
On 24 November 2010, through a collective agreement, SCOR reaffirmed its commitment with regard to the promotion of professional equality between men and women, by signing with social partners a triennial arrangement (2011-20122013 ) and thus confirms its position as a social responsible employer.
This agreement sets forth, via an analytical mechanism, the deletion of eventual unjustified remuneration gaps which might appear between men and women, by the 31 December 2010.
3.5. Information related to Group employees in France 3.5.1 NEW HIRES
Total Of which women Economic redundancies - Job saving plan - Other layoffs 3 1 3.5.3 DIRECT COMPENSATION
(*) prorated for the presence time and including bonuses, individual incentives and collective incentives.
Temporary (in person / years) 2010 Temp workers 21.38 External service providers 57
Monthly average number 23.5 Average duration of the contracts (in days) 52.93 days Payments to temporary work companies (in EUR thousands) 1,824.56
Handicap / Disability (on 31 December) 2010 Number of people 6 3.5.9 ARRANGEMENT OF WORKING TIMES
Employees using mobile scheduling 134 95 Average number of days of annual holidays 26.6 26.7 Average number of RWD days 15.6 14.9 Number of public holidays 13 13 Overtime hours 379 12
Total in % of the personnel 3.10 2.70 Unpaid leave 1,418 1,289
Number of meetings of the bodies 2010 Works Council 17 Personnel Delegates 4 CHSCT (Health and Safety) 9
Works Council 2010 Operating budget (in EUR thousands) 4.1 Employee benefits (in EUR thousands) 416 Children's holidays (in EUR thousands) 120 Total (in EUR thousands) 540.1 Average per employee (in EUR) 1,000.1 3.6.List of agreements signed in 2010 in France
AGREEMENTS RELATIVE TO COMPENSATION AND PAYROLL SAVINGS  Amendment n°3 to the employees profit sharing agreement dated 15 April 2010
 Amendment n°4 to the employees profit sharing agreement dated 27 September 2001
3.8. Relations between the company and integration associations, teaching establishments, environmental defence associations, consumer associations and neighbouring residents
SCOR is a regular partner of educational establishments or integration associations. This collaboration is intended to promote integration and access to jobs.
 2010 fiscal year’s important events for the Group and SCOR SE Section 5.1.5, 6 and
STATEMENTS DEALING WITH THE MANAGEMENT OF SCOR SE IN 2010 :  Company’s securities - Amount of issued capital, capital increase and additional information Section 21.1.1 and
Appendix A - Operations performed by the Company on its own shares Section 21.1.3 - Issuance of bonds and similar securities Appendix A and Section 20.1.6.14 - Share capital ownership and structure Section 18.1 - Cross shareholdings -1 - Elements which could have an impact in case of a tender offer -2 - Fluctuation of quotation related risks Section 4 - Employees’ shareholding in SCOR SE Section 17 and 18.1 - Adjustment of the conversion basis for securities granting access to the share capital Section 20.1.6.14
 Information about items that could affect a public offer, as required by Article L.225-100-3 of the French
 Information about share buybacks (Article L.225-211, paragraph 2, of the French Commercial Code) 263
European Company W i t h a s h a r e c a p i t a l o f EUR 1,478,740,032 RCS Nanterre B 562 033 357