●● on January 27, 2009, for the Zurich Hub (combined with the Cologne Hub from October 1, 2014); ●● on February 24, 2009, for the Paris Hub (combined with the London Hub from April 15, 2015).
On April 1, 2014, SCOR announced that it had obtained approval from Lloyd’s, the Financial Conduct Authority and the Prudential Regulatory Authority in the UK to create a Managing Agent at Lloyd’s. The new Managing Agency, “The Channel Managing Agency Limited”, has acted as Managing Agent for SCOR’s own Lloyd’s syndicate, Channel 2015, since April 1, 2014.
On September 12, 2016, SCOR has been informed of the decision by Standard & Poor’s (S&P) to affirm the financial strength rating for the Group and its main subsidiaries at “AA-”, with a “stable outlook”, and to maintain the counterparty credit ratings at “AA-/A-1+”.
– further developing the Non-Life US franchise and expanding in Life fast-growing Asia-Pacific markets through organic growth; ●● a high degree of diversification of Non-Life and Life business and geographical presence, providing more stable results and robust capital diversification benefits; ●● a controlled risk appetite, on both sides of the balance sheet; and
SCOR’s property treaties typically cover damage to the underlying assets (automobiles, commercial premises or industrial sites) and direct or contingent business interruption losses caused by fire or other perils, including natural catastrophes.
According to laws in France, Italy and Spain, as well as in other jurisdictions, or by contractual obligation, decennial insurance must be purchased to cover major structural defects and collapse for a certain period, typically ten years after completion of construction.
For more information on the Capital Shield Strategy, refer to Section 3.3.5 – Retrocession and other risk mitigation techniques. For information on the Atlas structured entities used in the Capital Shield Strategy, refer to Section 4.6 – Notes to the consolidated financial statements, Note 2 – Scope of consolidation.
SCOR GROup Information about the SCOR Group < #1 1.2.6.2. RESEARCH AND DEVELOpMENT, pATENTS AND LICENSES
The Group’s Life and Non-Life reinsurance global back-office operates on a custom software package known as “Omega.” Omega was designed to allow the tracking of brokers and ceding companies within the Group, grant online underwriting authorization throughout the world, track premiums and claims, analyze the technical profitability of contracts, and perform quarterly closings based on the latest estimated results. The Omega databases reflect the reinsurance risk of SCOR Global P&C and SCOR Global Life’s portfolios worldwide. After an extensive study, the Group decided to update and improve Omega, thereby capitalizing on this key asset. The Omega2 project, which included technical modernization and the development of structuring functional improvements, has been completed as planned mid -2016.
The Group continues to work on extending and automating its Asset and Liability Management tool. This internal model is central in the Solvency II compliance process, in which the SCOR’s Information Technology Department is deeply involved.
Two years ago, SGI has launched a strategic project, SGI 2.0, the first achievement of which was the outsourcing of middle and back office activities related to asset management to BNP Paribas Securities Services. This decision will allow to leverage their expertise in post-trade execution activities. A specific internal organization and related new procedures have been put in place to monitor the performance and the operational risks of this outsourcing. Front-office activities remain in-house, using the Bloomberg AIM solution currently being deployed.
Life reinsurance is a concentrated industry with significant regulatory and operational barriers to entry. Most global Life reinsurers are based in established markets with rigorous regulatory frameworks suitable for long-term business. Global Life reinsurers have developed strong underwriting, pricing, actuarial, claims management and product development capabilities, as well as long-term relationships with their clients. Because of the long-term nature of some Life risks, the Life reinsurance market historically has been less cyclical than Non-Life.
Net earned premiums for the year ended December 31, 2016 amounted to EUR 12,462 million as compared to EUR 11,984 million and EUR 9,991 million for the years ended December 31, 2015 and 2014, respectively. The overall increase in net earned premiums of EUR 478 million from 2015 to 2016 and EUR 1,993 million from 2014 to 2015 is consistent with the evolution in gross written premiums.
In 2014, SCOR benefited from a strong operating performance, a prudent asset management policy of SCOR Global Investments which safeguarded shareholders’ interests while delivering solid returns and a rather benign year in terms of natural catastrophes. In 2014, the effective tax rate was 24.4% (1).
In 2016, this ratio reflects very strong technical results, with a decreasing net attritional loss ratio (54.1% compared to 56.9% in 2015) despite higher natural catastrophes compared to 2015. Natural catastrophes had a 5.5% impact on the Group net combined ratio for year-end 2016 compared to a 2.2% impact in 2015 and a 4.2% impact in 2014.
SCOR defines a catastrophe as a natural event involving several risks and causing pre-tax losses, net of retrocession, totaling EUR 3 million or more.
Net investment income for the year ended December 31, 2016 amounted to EUR 670 million as compared to EUR 666 million and EUR 576 million for the years ended December 31, 2015 and December 31, 2014, respectively.
Net interest income on funds withheld and contract deposits 182 184 180
(5) Income/(expenses) on technical items include (2) and (3) amongst other technical items.
Available-for-sale financial assets - 13,791 770 304 142 250 15,257 - 15,257 124 - 15,381
On December 15, 2016, following the authorization granted by SCOR’s shareholders in April 2016, SCOR arranged a new contingent capital facility with BNP Paribas. This facility replaced, as from January 1, 2017, the previous contingent capital facilities which had ended on December 31, 2016. Under this new EUR 300 million arrangement, SCOR raised its level of protection by EUR 100 million. For more information on contingent capital, see Section 4.6 – Notes to the consolidated financial statements, Note 12 – Information on share capital, capital management, regulatory framework and consolidated reserves.
The Group has a debt leverage position of 24.4% at December 31, 2016, as compared to 27.5% (1) at December 31, 2015 and 23.1% at December 31, 2014. This ratio is calculated as the percentage of subordinated debt compared to total shareholders’ equity plus subordinated debt. The calculation of the leverage ratio excludes accrued interest from debt and includes the swaps effect related to the CHF 315 million and CHF 250 million subordinated debt issuances.
Denis Kessler, a French citizen, is a graduate of HEC business school (École des Hautes Études Commerciales), holds a PhD in economics and advanced degrees in economics and social sciences, and is a Fellow of the French Institute of Actuaries. He was Chairman of the Fédération Française des Sociétés d’Assurance (FFSA), Senior Executive Vice-President and member of the Executive Committee of the AXA Group and Executive Vice-President of MEDEF (Mouvement des Entreprises de France). He joined SCOR as Chairman and Chief Executive Officer on November 4, 2002. In January 2016, he was elected to join the Academy of Moral and Political Sciences of the Institut de France.
pOSITIONS THAT ExpIRED DuRING THE LAST FIVE YEARS ●● Director of Maisons France Confort (France)
●● Chairman of the Board of Directors of Azur-GMF Mutuelles Assurances Associées (France)
●● Member of the Executive Board and member of the Board of Macif and Vice-Chairman of Gema (France)
Member of the Strategy Committee, Compensation and Nomination Committee and Crisis Management Committee
Kory Sorenson, a British citizen, was born in the US. She speaks fluent French and has a DESS degree in corporate finance from the Institut d’Études Politiques de Paris, a master’s degree in applied economics from the University of Paris Dauphine, a bachelor’s degree in econometrics and political science from the American University in Washington, D.C. and a certificate in governance from Harvard Executive Education and another one from INSEAD. Kory Sorenson has over twenty years of experience in financial services, most of which has been focused on insurance and banking. She was Managing Director, Head of Insurance Capital Markets of Barclays Capital and also held senior positions in the insurance capital markets and debt capital markets divisions of Credit Suisse, Lehman Brothers and Morgan Stanley. She began her career in the treasury department of Total SA in Paris. Kory Sorenson is currently a non-executive director of several major companies.
3. Must not be a corporate officer in a company in which SCOR is directly or indirectly a director, or in which an employee has been appointed as such, or in which one of SCOR’s corporate officers (currently or within the last five years) is a director.
The Lead Independent Director is appointed from the independent directors by the Board of Directors upon a proposal by the Compensation and Nomination Committee. He assists the Chairman and Chief Executive Officer in his duties, in particular in organizing the Board and its Committees and ensuring they function properly, and in supervising corporate governance and internal control.
Pursuant to the Board Internal Charter, each director undertakes not to seek or accept any function, benefit or situation from the Company or from the Group, directly or indirectly, that could jeopardize his or her independence of analysis, judgment or action, during the performance of his or her duties as director. He or she will also dismiss any direct or indirect pressure from other directors, specific groups of shareholders, creditors, suppliers or other third parties.
3. Its Board Internal Charter, according to which any director in a situation involving a risk of conflict of interest undertakes to resign from his or her position if the conflict situation is not solved.
The average attendance rate of the Committee members was 100% (1). The following chart states the attendance of the members of the Compensation and Nomination Committee in 2016: Committee members Attendance rate (in %)
Frieder Knüpling, a German citizen, holds degrees in mathematics and physics from the Universities of Göttingen and Freiburg. He worked as a lecturer and research assistant at the University of Freiburg and several other colleges, until he received a PhD in economics based on research into the econometric modeling of macroeconomic and financial data. From 1999 to 2002, he worked for Gerling-Konzern Globale Rückversicherungs-AG and its UK Life Reassurance subsidiary, dealing with pricing and valuation. As at 2003, he headed the Corporate Actuarial & Treasury department of the Revios Group. In 2007, Frieder Knüpling headed SCOR’s Corporate Actuarial Department, reporting to the Chief Risk Officer. He was appointed Deputy Chief Risk Officer of SCOR in December 2008. In July 2010, he was appointed Deputy Chief Executive Officer of SCOR Global Life and member of the SCOR Group Executive Committee. On October 1, 2012, he was appointed Deputy Group Chief Risk Officer and on January 17, 2014, he was appointed Group Chief Risk Officer. Frieder Knüpling is a fellow of the Deutsche Aktuarvereinigung (DAV) and a Chartered Enterprise Risk Analyst (CERA).
Broadening and deepening of the Group’s talent pool by Increasing the proportion of employees being trained during the year to 80%, and by ensuring that priority is given to internal promotions for the appointments to the highest positions (Executive and Senior Global Partners)
It should be noted that SCOR is committed to the neutral impact of each stock option and performance share allocation in terms of dilution. To achieve this, SCOR’s policy is to systematically neutralize, insofar as possible, the potential dilutive impact that could result from the issuance of new ordinary shares following the exercise of stock options, by covering the exposure resulting from the issuance of stock options through the purchase of ordinary shares under its share buyback program and by cancelling the treasury shares thus acquired as the options are exercised. Moreover, performance share allocation plans are covered through the allocation of existing shares taken from the treasury shares held by the Company in the context of its share buyback program, and not via the creation of new shares. Thus, there is no capital dilution regarding the granting of performance shares. Finally, in compliance with the recommendations of the AFEP-MEDEF corporate governance code applicable to the executive corporate officer, he also made a formal commitment not to resort to the use of hedging instruments on the stock options and/or performance shares which have been granted to him for the whole duration of the term of his office.
In the event of the termination of the Chairman and Chief Executive Officer’s term of office, the benefits he may be allocated would be determined according to the following situations: ●● in the event that the Chairman and Chief Executive Officer is dismissed for misconduct or following a notably negative performance of the Company (non-achievement of the performance condition (C_n) as described below, and for at least two of the three previous years) no compensation will be due; ●● in the event of a forced departure or if he is dismissed ad nutum, typically due to a difference of opinion regarding the Group’s strategy, the Chairman and Chief Executive Officer will benefit from a cash payment equal to the annual amount of fixed and variable compensation paid to him by the Group for the twenty-four months prior to his departure. This payment is subject to the satisfaction of the performance condition (C_n) defined below for at least two out of the three years preceding the date of departure of the Chairman and Chief Executive Officer; ●● in the event of a forced departure or a dismissal resulting from a hostile takeover bid leading to a change in control of the SCOR Group, the Chairman and Chief Executive Officer will benefit from a cash payment equal to the annual amount of fixed and variable compensation paid to him by the Group for the twenty-four months prior to his departure. This payment is subject to the satisfaction of the performance condition (C_n) as defined below for at least two out of the three years preceding the date of his departure. Furthermore, the performance shares and stock options which have been granted prior to his departure will be subject, in their entirety, to the performance conditions of each plan as approved by the Board of Directors at the time of the grant.
Mrs. Fields Wicker-Miurin Acquisition of shares for a total amount of EUR 10,000 2.2.2. COMpENSATION OF ExECuTIVE COMMITTEE MEMBERS OTHER THAN THE CHAIRMAN AND CHIEF ExECuTIVE OFFICER
CORpORATE GOVERNANCE AND ExECuTIVE COMpENSATION #2 2.2.3.2. FREE ALLOCATION OF SHARES TO THE MEMBERS OF THE ExECuTIVE COMMITTEE AND THE ExECuTIVE CORpORATE OFFICER AS AT DECEMBER 31, 2016
The Company’s fully diluted issued share capital, as defined below, stood at 243,528,456 shares as of December 31, 2016, broken down as follows: Fully diluted issued share capital 243,528,456
Refer to the Section 2.2.3.1 of the present Reference Document for the details of the stock options allocated to the members of the Executive Committee.
SCOR Global Life’s technical margin ≥ 3% on average in 2014 and 2015 7.15% Yes
CORpORATE GOVERNANCE AND ExECuTIVE COMpENSATION Major shareholders and related party transactions < #2 2.3.1.5. SHARE CApITAL
According to the decision of the Shareholders’ Meeting of the Company on April 30, 2015, in its 23rd resolution, the Board of Directors of the Company decided on April 30, 2015, to carry out a share capital reduction of EUR 9,926,773 by the cancellation of 1,260,227 treasury shares to reduce the share capital from EUR 1,522,151,515.10 to EUR 1,512,224,741.93, divided into 191,980,457 ordinary shares. The reason for the capital reduction was to avoid any dilutive effect of the exercise of stock options on the share capital.
This resolution can only be used with the 11th, 12th and 13th resolutions and is in any case capped by the 22th resolution 19th resolution (Authority to issue shares for stock option plans) 1,500,000 shares 1,499,250 shares 20th resolution (Authorization granted to the Board of Directors to issue shares under the existing free share allocation plans) 3,000,000 shares 2,989,300 shares 22nd resolution (Aggregate ceiling of the capital increases) 100,826,547 shares 81,627,753 shares
CORpORATE GOVERNANCE AND ExECuTIVE COMpENSATION Major shareholders and related party transactions < #2 2.3.3. SpECIAL REpORT OF THE STATuTORY AuDITORS ON RELATED pARTY AGREEMENTS AND COMMITMENTS
Agreements and commitments submitted for approval by the General Meeting of shareholders
This additional pension plan purports to determine the terms and conditions of additional pension plan benefits granted by the Company for the benefit of: ●● all the managers of the Group (cadres de direction) within the meaning of the professional agreement of March 3, 1993, who were exercising their activity within the Group on the date on which the additional pension plan took effect; ●● executives of the Group, who had entered into an employment contract but were subject to France’s general social security regime and to the additional pension benefits of ARRCO and AGIRC and were discharging their duties on the date on which the additional pension plan took effect.
SCOR’s current ratings are at the highest levels within the reinsurance sector after Standard & Poor’s and Fitch upgraded the Group’s ratings to “AA-“ from “A+” in 2015, followed by a Moody’s upgrade to Aa3/Stable and an AM Best confirmation of positive outlook in September 2016. Therefore, a downgrade by one notch would not endanger its future business development, its liquidity position or its capacity to raise funds. For further information on SCOR’s current rating, see Section 1.2.4 – Ratings information.
Due notably to the size and complexity of acquisitions, and despite pre-acquisition due diligence work carried out, there is a risk that not all financial elements (including litigation related to prior periods) may have been fully and/or correctly evaluated. Unknown or unexpected financial risks could emerge, which may have significant consequences on the initially estimated impact of the relevant acquisition on the combined Group.
A terror event could also have an impact on SCOR’s life portfolio. Although in past events the life claims incurred have been comparatively small compared to the non-life claims, a terrorist act might claim a large number of insured lives.
The extent of the loss event and the affected lines of business will vary depending on the man-made event. SCOR can be affected from a man-made event simultaneously in the property and the casualty lines of business, e.g. if the explosion at a large industrial site destroys the industrial facility, but also pollutes the environment, given its proximity to vulnerable landscape (e.g. river, lake), and causes property damages and bodily injuries affecting the population.
– Underwriting guidelines in place within SCOR Global P&C specify (i) the underwriting rules and principles to be complied with: (ii) underwriting capacities individually delegated to the underwriters in each of the markets and lines of business in which the Group operates as well as (iii) the relevant maximum acceptable commitments per risk and per event. They are reviewed and updated annually by the Underwriting Management function and approved by the Chief Executive Officer and Chief Risk Officer of SCOR Global P&C.
●● A quarterly review of technical results is performed by region and by business area.
The level of retrocession is selected each year to ensure that SCOR’s retained risk profile respects the specific Group risk appetite framework and to help the Group achieve its return on capital and solvency objectives.
For information on the Atlas Special Purpose Vehicles, used as capital markets solutions and alternative risk transfer solutions in the capital shield policy, see Section 4.6 – Notes to the consolidated financial statements, Note 2 – Scope of consolidation. For information on the contingent capital used in the capital shield policy, see Section 4.6 – Notes to the consolidated financial statements, Note 12 – Information on share capital, capital management, regulatory framework and consolidated reserves.
Credit spreads reflect the market’s assessment of the credit quality of a financial instrument (e.g. a bond) and are derived from the market value of the instrument. Credit spread risk is the risk that the credit spread increases i.e. the market value deteriorates leading potentially to a loss on the financial instrument.
RISK FACTORS AND RISK MANAGEMENT MECHANISMS #3 3.6.2. MANAGEMENT OF LIQuIDITY RISK
(1) These amounts exclude debt which has been swapped from a variable interest rate to a fixed interest rate.
parties. External frauds may be perpetrated by various means including cyber-attacks, and usually target cash or data. Should they succeed in bypassing the controls or protection measures in place, this could generate a direct loss for the Group.
Other comprehensive income net of tax - - 153 329 - - - - 482
Remeasurements of post-employment benefits - - - (7) - - - - (7)
NOTE 8. ACCOUNTS RECEIVABLE FROM AND PAYABLE ON ASSUMED AND CEDED INSURANCE AND REINSURANCE TRANSACTIONS 180
The following table sets forth the operating results for the Group’s operating segments and its corporate cost center for the financial years ended December 31, 2016, 2015, and 2014.
(1) In 2015, SCOR Global Life’s individual treaties have been reallocated based on a review of regional allocation. The gross written premiums for SCOR Global Life in EMEA, Americas and Asia Pacific previously reported in the 2014 Registration Document were EUR 2,103 million, EUR 3,498 million and EUR 780 million respectively for the year ended December 31, 2014.
The Group’s insurance business investments and cash by nature and level of valuation technique are presented below: In EUR million
TOTAL AVAILABLE FOR SALE AND FAIR VALUE THROUGH INCOME 17,365 132 16,125 146
Amounts are recorded in the balance sheet as assets, recognized at fair value through income, and as other liabilities representing the amount of commission payable. In the absence of observable market inputs and parameters to reliably determine a fair value for these derivative instruments, the best measure of fair value is the expected cost of the instrument, corresponding to the total annual fees payable under the arrangement net of the warrants’ subscription amounts received, amortized over the life of the instrument. These assets are disclosed as level 3 investments within insurance business investments (see Note 7.1 above).
Estimated premiums payable to retrocessionaires, net of commission (250) (248) (498) (180) (232) (412)
Share capital increase – exercise of stock option – during the year 554,112 1,221,843 711,022
The primary source of capital used by the Group is shareholders’ equity and subordinated debt. The leverage ratio as at December 31, 2016 is 24.4%. For a description of the leverage ratio, see Section 1.3.6 – Financial position, liquidity and capital resources.
In 2006, SCOR issued a perpetual super-subordinated debt security (Tier 1 type) in an aggregate principal amount of EUR 350 million to finance the acquisition of Revios Rückversicherung AG. The issue, comprising last-rank subordinated bearer certificates with a face value of EUR 50,000 each bearing interest at an initial rate of 6.154% per annum then a floating rate indexed on the 3-month EURIBOR plus a margin of 2.90%, payable quarterly.
On August 2, 2016, SCOR redeemed the CHF 650 million perpetual subordinated debt (EUR 599 million).
The following table summarizes the amounts included in contingency reserves: In EUR million Reserves for post employment benefits Other reserves Total
For defined contribution plans the employer pays fixed contributions to an external organization, with no legal or constructive obligation to pay further contributions. As a result, only contributions paid or due for the financial year are charged to the Group’s statement of income as administrative expenses. The payments made by the Group are expensed during the period in which the expense was incurred.
Administration expenses recognized in pension expense 1 - - 1 - - - - - - - -
The actual returns on plan assets were EUR 5 million for the year ended December 31, 2016 (2015: EUR 6 million and 2014: EUR 13 million).
Unfunded obligation as at December 31 64 50 8 6 54 41 7 6 55 44 6 5
An aging analysis of reinsurance assets is also included in Section 3.5.2 – Counterparty default risks.
The next section of the table shows the portion of the initial year-end net reserves that was paid (claims paid) as at the end of the subsequent calendar year. Claims paid are converted to euros at the average foreign exchange rates of the period during which the payments are made and are not revalued at the initial foreign exchange rates at which the reserves were established. Additionally, payments include losses covered by unearned premium reserves.
The following tables present the consolidated ten-year loss development of Non-Life operations on an IFRS basis and a three-year reconciliation of opening and closing reserve balances on an IFRS basis. The IFRS loss development data is presented on a calendar year basis, and the reserve reconciliation data represents our allocation of incurred and paid losses and loss adjustment expenses between current and prior years on a calendar year basis.
In EUR million AAA AA A BBB < BBB Not rated Total as at 12/31/2015
French residents - 3 years 2 years 2 years 2 years 6 years
NOTE 17.2. RECONCILIATION OF ExpECTED TO ACTuAL CORpORATE INCOME TAx ExpENSE
A reconciliation of the income tax expense, obtained by applying the French tax rate of 34.43% for 2016 and 38.00% for 2015 and 2014 to income (loss) before corporate income taxes and excluding share in results of associates, to the actual corporate income tax expense recorded in the consolidated statement of income is presented in the table below. The effective tax rate in 2016 is 21.7% (2015: 26.0% and 2014: 24.4% (1)).
The main reconciling items are due to the difference between the local corporate income tax rate of each taxable entity and the Group tax rate, permanent differences reported by each entity, reduced rates and specific items.
Effects of changes in foreign exchange rates 75 (4) 71 316 8 324 361 7 368
Deferred tax assets and liabilities and the related expense or benefit as at and for the years ended December 31, 2016 (1), 2015 and 2014 were generated by the following items: In EUR million
For the calculation of diluted earnings per share, the weighted average number of outstanding shares is adjusted to take into account the potential conversion of all stock options and share allocation plans.
Transactions with associates for the financial years ended December 31, 2016, 2015 and 2014 were carried out on an arm’s length basis and their volume is not material.
Date of the Shareholders’ Meeting called to approve the financial statements for the financial year ending 12/31/2019 4.8.2. ALTERNATIVE AuDITORS
Lionel Gotlib Tour Exaltis – 61, rue Henri Regnault 92075 La Défense Cedex CRCC of Versailles 05/06/2014
As set forth in Article 3 of the bylaws (statuts), the corporate purpose includes the following: ●● insurance, reinsurance, cession or retrocession of business of any nature in all classes and in all countries, the assumption in any form of reinsurance contracts or liabilities of any French or foreign company, organization, entity or association, and creation, acquisition, rental, lease, installation and operation of any undertaking related to these activities; ●● the construction, lease, operation or purchase of any and all properties; ●● the acquisition and management of all securities and other equity rights by any means including but not limited to subscription, transfer or acquisition of shares, bonds, corporate rights, partnerships and other equity rights; ●● acquisition of equity investments or interests in any industrial, commercial, agricultural, financial, movable property or real estate companies, the formation of any company, participation in any capital increases, mergers, demergers and spin-offs; ●● administration, management and control of any company or other undertaking, direct or indirect participation in all transactions carried out by such companies or undertakings by any means including, but not limited, to participation in any company or equity investment; ●● implementation and management of centralized cash resource management within the Group and the provision of services, to any Group company concerned, relating to the management and operations of centralized cash resources, and; ●● generally all such industrial, commercial and financial transactions, or transactions involving movable property and real estate, as may pertain directly or indirectly to the above stated corporate purpose or as may be related to or facilitate the implementation or pursuit thereof.
When a decrease or sale of an equity stake, whether directly or indirectly, has been notified, the ACPR verifies whether this sale is likely to negatively affect the Company’s reinsured clients as well as the sound and prudent management of the Company itself.
ADDITIONAL INFORMATION #5 5.3. THIRD-PARTY INFORMATION AND STATEMENTS BY EXPERTS AND DECLARATIONS OF ANY INTEREST
For information on the composition of the Board of Directors, the gender balance on the Board and the conditions of preparation and organization of the Board of Directors’ work, see Section 2.1.2 – Board of Directors.
The Group has set up a functional organization structured around regional management platforms, or “Hubs” in London/Paris and Zurich/Cologne for Europe, Singapore for Asia and the Americas’ Hub (New York, Charlotte and Kansas City). Each subsidiary, branch and representative office has a functional link to a given Hub.
The Group Investment Committee meets at least once every quarter. Its role is to define the investment strategy on a Group level and to supervise the implementation of this strategy with regard to the regulatory and contractual constraints. At local level, local investment committees supervise the implementation of the investment strategy relating to their legal entities as well as the compliance of the portfolios positioning with the local investment guidelines.
●● Internal communication: SCOR strives to make all documents deemed important available to all SCOR employees on SCOR’s intranet.
REpORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS #AStatutory 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
In 2016, SCOR SE carried out the following significant transactions: Dividends received
On May 2, 2016, SCOR SE paid a EUR 278 million dividend to its shareholders.
Due and accrued interests on rental income 31 - 31 25
NOTE 10. ANALYSIS OF GENERAL EXPENSES BY TYPE AND NON RECURRING INCOME OR LOSS 271
In its Opinion 2008-17 dated November 6, 2008 relating to the accounting of stock options and free share allocation plans, the CNC redefined the accounting of such benefits granted to employees and the accounting for impairment of treasury shares held for such plans. In the event of delivery of existing shares, the expense should be recognized over the vesting period if the attribution of the shares is subject to the employee remaining with the Company over the vesting period. Consequently, at each period end, a provision for risk is recorded for the estimated cost (calculated as the difference between the cost to acquire the shares and nil value) to which a pro rata is applied, from the grant date, to the end of the vesting period, over the entire vesting period.
Differences in interest on forward contracts are recorded over the effective life of the hedged operation.
At December 31, 2016, cash deposited with ceding companies breaks down as follows: ●● SCOR Global Life SE: EUR 1,324 million compared to EUR 1,234 million in 2015; ●● SCOR Global Life SE Milan: EUR 312 million compared to EUR 348 million in 2015; ●● SCOR Global Life SE Madrid: EUR 29 million compared to EUR 25 million in 2015; ●● SCOR South Africa: EUR 50 million compared to EUR 15 million in 2015; ●● SCOR Perestrakhovaniye.O.O.O: EUR 2 million compared to EUR 6 million in 2015.
As of December 31, 2016, loans and advances granted by SCOR SE to its subsidiaries amounted to EUR 2,211 million, breaking down as follows: ●● EUR 832 million with SCOR Global Life SE; ●● EUR 701 million with SCOR Global P&C SE; ●● USD 250 million (EUR 233 million) with SCOR Reinsurance Company; ●● EUR 145 million with SCOR GIE Informatique; ●● EUR 115 million with SCOR Holding Switzerland AG; ●● EUR 88 million with SCOR Auber SAS; ●● EUR 51 million with SCOR Reinsurance Asia Pacific Pte LTD; ●● EUR 22 million with MRM SA; ●● EUR 15 million with SCOR Properties; ●● EUR 9 million with SCOR Capital Partners SAS.
Liabilities arising from reinsurance operations 147 - - 147 200 - 8 208
●● CHF 250 million in fixed rate perpetual subordinated notes was issued on September 10, 2013. The notes are redeemable by SCOR from November 30, 2018 on a quarterly basis on the interest payment dates. The coupon has been set at 5% until November 30, 2018 and at 3-month CHF LIBOR plus a margin of 4.10% thereafter. If SCOR does not exercise this option on such date, such repayment may intervene, where applicable, quarterly, at the interest payment dates. The notes are hedged by a cross-currency swap detailed in Note 5.3.8 – Financial instruments received and given, in the analysis of commitments given and received.
The reinsurance activity of SCOR SE comprises four internal quota share retrocession treaties, one with SCOR Global P&C SE, another with SCOR Global Life SE, a third with SCOR South Africa and a fourth with SCOR Perestrakhovaniye, non-proportional retrocession from the Argentinian branch of SCOR Global P&C SE, and from SCOR Switzerland AG and the business underwritten by the Beijing branch.
As at December 31, 2016, SCOR SE has an outstanding letter of credit capacity of EUR 406 million (EUR 402 million in 2015), recognized as a commitment received from banks. This outstanding capacity can be used to provide collateral on the forthcoming underwritten business. The allocation per bank is the following: ●● BNP Paribas: USD 26 million (EUR 24 million); ●● Deutsche Bank: USD 65 million (EUR 60 million); ●● Natixis: USD 39 million (EUR 36 million); ●● JP Morgan: USD 161 million (EUR 150 million); ●● Helaba: USD 27 million (EUR 25 million); ●● Commerzbank: USD 21 million (EUR 19 million); ●● CACIB: USD 49 million (EUR 46 million); ●● Citibank: USD 49 million (EUR 46 million).
Each category in this section corresponds to an item of information mentioned in the French Grenelle II implementing decree which is itself explicitly mentioned.
Methodology: employees on fixed-term contracts are considered to have definitively left SCOR when their contracts expire. Therefore, the 12 employees who signed a permanent contract in 2016 at the end of their fixed-term contract are not included in the indicator “End of fixed-term contract”.
●● Headcount is calculated on the basis of employees registered at December 31, on fixed-term contracts (employment contract signed directly between SCOR and the individual with a defined end date) or permanent contracts (employment contract signed directly between SCOR and the individual for an unlimited period). Trainees are employees paid by the Company under a tripartite agreement between the Company, the school and the student.
●● Number of training hours: total number of hours of training received by all the employees. These training hours are directly managed by SCOR or by an external training organization at the behest of SCOR. For collective training, the number of hours of training is multiplied by the number of participants.
●● The collective agreements are concluded for a positive impact, in particular on the working conditions of employees and on the economic performance of the Company. Their characterization is currently being considered.
(1) Energy consumption by outsourced data centers is not factored in, unlike data centers hosted in premises housing Group employees.
(1) Coverage rates are reported against the number of employees. It corresponds to the number of employees working in the locations surveyed divided by the number of employees working in the entities fully integrated in the financial statements. Channel Syndicate employees are therefore not included in the coverage rate whilst the above published indicators include their consumption, their business travel and the related greenhouse gas emissions. Further information on the scope of reporting can be found in Sections 1.4 of this environmental report.
In addition, the Group consolidates these indicators and presents them expressed in tons of CO2 equivalent. This conversion of the different energy sources into greenhouse gas emissions is performed centrally on the basis of the conversion factors taken from the “Base Carbone®” produced by the French “Environment and Energy Management Agency” (Ademe) and extrapolated from the data effectively collected in each Hub. The emissions calculated by the Group cover the following scope of the “Green House Gas Protocol”: ●● “Scope 1”: direct emissions from the combustion of fossil fuel. Depending on the site, these emissions are generated by the consumption of fuel (heating and backup generator) and the use of fleets of vehicles.
The Foundation benefits from annual financial support from SCOR of EUR 1.5 million in order to support some of the Group’s existing scientific research operations as well as new projects. SCOR has pledged EUR 7.5 million to the Foundation’s 5-year program with a last grant to happen in 2017.
By way of illustration, the SCOR Global Life Americas teams in North Carolina (Charlotte, United States), with the support of the executive management, are encouraged to volunteer and support a number of charity operations under the flagship “Esprit de Corps”. This program which groups together a number of social and philanthropic activities, enables staff to devote four hours per month to voluntary work for the non -profit associations of their choice. This program also includes partnerships with various schools which have a very high proportion of underprivileged children. Other charity organizations such as United Way are also supported by SCOR Global Life America.
(1) Whose scope is available at www.cofrac.fr (2) ISAE 3000 – Assurance engagements other than audits or reviews of historical financial information.
Major events for the Group and SCOR SE in 2016 Sections 1.2.2, 1.2.5, 1.3.3, 1.3.4, 1.3.5 and Appendix C – 1
Agreements concluded between an officer or a significant shareholder and a subsidiary of the Company None