Appendix B Report Of The Chairman Of The Board Of Directors 350
1.2 Declaration by person responsible  I declare that, having taken all reasonable care to ensure that such is the case, the information contained in this Registration Document is, to the best of my knowledge, in accordance with the facts and contains no omission likely to affect its import.
On the date of the Shareholders’ Meeting called to approve the financial statements of the financial year ended 31 December 2019
On the date of the Shareholders’ Meeting called to approve the financial statements of the financial year ended 31 December 2019 2.2 Resignation or non-renewal of Auditors Not applicable
2013 disclosures include the results generated by Generali U.S. during the period from 1 October 2013, the date of acquisition by SCOR, up to 31 December 2013. 2014 disclosures include twelve months of the results generated by Generali U.S.
The Group’s results of operations could be materially affected by the global capital markets conditions and the economy in France, other countries in continental Europe, the United Kingdom (“the UK”), the United States of America (“the US”) and elsewhere around the world. Many economies around the world may experience negative macroeconomic trends, including job losses and, consequently, higher unemployment, lower consumer spending and investments, lower credit availability, the failure of a significant number of financial and non-financial companies and the payment default of sovereign states. Any continued deterioration in macroeconomic trends could have an adverse effect on SCOR’s business and results of operations, even more so as the global economy is still in convalescence since the 2008 financial crisis and remains very vulnerable to negative economic, financial and geo-political shocks. In particular, the growing debt of governments in advanced economies and of private companies in emerging countries could generate significant adjustments if the main central banks were to raise interest rates. As a result, financial markets could enter a period of high volatility which could lead to adverse consequences such as waves of company defaults, or a major liquidity crisis. Although pressure on the most fragile sovereign issuers in Europe seems to have decreased since the summer of 2012, notably due to announcements from the European Central Bank, the financial situation in many countries of the Eurozone remains unstable and downgrades of some states' financial ratings have occurred. While SCOR does not currently own any securities issued by the governments of Greece, Italy, Spain, Ireland, Hungary or Portugal, it cannot predict whether any of the other government securities that it holds in its investment portfolio will be adversely affected in the future by ratings downgrades, the continuing debt crisis or other developments. For further information on investments, refer to Section 6.1.5 Investments and Section 20.1.6 – Notes to the consolidated financial statements, Note 6 – Insurance Business Investments.
In the same way, many of the Group’s reinsurance treaties contain a requirement for it to put in place letters of credit (“LOC”) provisions, if the financial strength rating of the Company and/or its subsidiaries holding the contracts and benefiting from by the Group rating deteriorates, the cedent has the right to draw down on a LOC issued by a bank in SCOR’s name.
Operational risks are inherent to all businesses including SCOR’s. Their causes are multiple and include, but are not limited to, poor management, employee fraud or errors, external fraud, failure to document a transaction as required, failure to obtain required internal authorizations, non-compliance with regulatory or contractual obligations, cyber-attacks, malfunctioning information technology (IT) system or flaws, poor commercial performance or external events. Cyber-attacks against companies have increased considerably in the recent years due to an increasing dependency upon IT systems, and the interconnectivity between the systems within the companies and their customers and suppliers. In the past, the reinsurance industry was rarely impacted by the attacks, but it now represents a potential target and reinsurance IT systems are subject to targeted and non-targeted attacks.
However, there can be no assurance that its risk management measures and sensitivity analysis will be sufficient to protect the Group against all the risks related to variations in interest rates. For information on the maturities of financial assets and liabilities, related interest rates and sensitivities to interest rate fluctuations as well as the allocation of the fixed income securities portfolio by rating of the issuer, see Section 20.1.6 – Notes to the consolidated financial statements, Note 26 – Insurance and Financial Risk.
Insurance regulation in France is largely based on the requirements of EU Directives. Inconsistent application of directives by regulators in different EU Member States may place SCOR’s business at a competitive disadvantage to other European financial services groups. In addition, changes in the local regulatory regimes of designated territories could affect the calculation of its solvency position and have a material adverse impact on its business, present and future revenues, net income, cash flows, financial position, and potentially, on its share price. See Appendix B – II. Internal control and risk management procedures, C. Principal activities and participants of risk control for information on risk mitigation actions.
On 21 July 2010, the Dodd-Frank Act was enacted and signed into law. The Dodd-Frank Act effects changes to financial services regulation in the US. The Dodd-Frank Act establishes the Financial Services Oversight Council (“FSOC”), which is authorized to recommend that certain systemically significant non-bank financial companies, including insurance companies, be regulated by the Board of Governors of the Federal Reserve. The Dodd-Frank Act also establishes a Federal Insurance Office (“FIO”) within the Department of Treasury. While not having a general supervisory or regulatory authority over the business of insurance the director of this office will perform various functions with respect to insurance, including serving as a non-voting member of the FSOC and making recommendations to the Council regarding insurers
The price at which SCOR’s Ordinary Shares will trade may be influenced by a large number of factors, some of which will be specific to the Group and its operations and some of which will be related to the insurance and reinsurance industry and equity markets generally. As a result of these factors, investors may not be able to resell their Ordinary Shares at or above the prices which they paid for them. In particular, the following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of Ordinary Shares:  a downgrade or rumored downgrade of SCOR’s solvency, credit or financial strength ratings, including placement on credit watch;  potential litigation involving the Group or the insurance or reinsurance industry generally;  changes in financial estimates and recommendations by securities research analysts;  fluctuations in foreign exchange rates and interest rates;  the performance of other companies in the insurance or reinsurance sector;  regulatory and legal developments in the principal markets in which SCOR operates;  national and international political and economic conditions, including the effects of terrorism attacks, military operations and other developments stemming from such events and the uncertainty related to these developments;  investor perception of SCOR, including actual or anticipated variations in its revenues or operating results;  SCOR’s announcements of acquisitions, disposals or financings or speculation about such acquisitions, disposals or financings;  changes in dividend policy, which could result from changes in SCOR’s cash flow and capital position;  sales of blocks of SCOR’s shares by shareholders; and  general economic and market conditions.
Since 14 September 2012, SCOR SE is included in the ASPI (Advanced Sustainable Performance Indices) Eurozone® index.
On 25 September 2014, SCOR successfully placed perpetual subordinated notes on the Euro market in the amount of EUR 250 million. The net proceeds of the notes issue will be used for general corporate purposes.
The Group is organized into two operating divisions and one corporate cost center referred to as “Group Functions”. The operating divisions are: the SCOR Global P&C division, with responsibility for the property and casualty insurance and reinsurance (also referred to in this Registration Document as “Non-Life” or the “Non-Life division”); and the SCOR Global Life division, with responsibility for the life reinsurance (also referred to in this Registration Document as “Life” or the “Life division”). These two divisions represent SCOR's two “operating segments” for purposes of IFRS 8 and are presented as “operating segments” in its consolidated financial statements, included in Section 20.1.6. However, in accordance with longstanding management convention, the Group uses the term “divisions” in this Registration Document, rather than “operating segments”. Each operating division underwrites different types of risks and offers different products and services, which are marketed via separate channels; responsibilities and reporting within the Group are established on the basis of this structure.
SCOR Global P&C carries out its operations through a European Company (Societas Europaea) incorporated in France, SCOR Global P&C SE, which has branches in Spain, Italy, Switzerland, the UK, Germany and Argentina and a network of dedicated subsidiaries, branches and representative offices in the UK, the Americas and Asia/Pacific, as well as composite subsidiaries and branches (which also operate in the Life division) in Russia, South Africa, China, Hong Kong and South Korea. SCOR Global Life also carries out its operations through a European Company (Societas Europaea) incorporated in France, through SCOR Global Life SE, which has branches in Germany, the UK, Italy, Spain, Sweden, Switzerland, Austria, the Netherlands, Canada, Asia and representative offices in the USA, Mexico, Taiwan and Israel, through SCOR Global Life Americas Holding in the US, which has a network of entities in North and South America, through SCOR Global Life Reinsurance Ireland in Ireland, through subsidiaries in Europe, Australia and in North and South America, and through composite subsidiaries and branches (which also operate in the Non-Life division) in Russia, South Africa, China, Hong Kong and South Korea.
Underwriting and pricing guidelines defined by SCOR Global Life specify the underwriting rules and principles to be complied with, underwriting capacities delegated to the underwriters and pricing actuaries in each of the markets in which the Group operates, as well as maximum acceptable commitments per risk and per event. In particular, these guidelines specify the type and the terms and conditions under which business is considered as acceptable. Furthermore, they set out the retention of SCOR Global Life for various risks and types of covers. They are approved by the Chief Executive Officer, the Chief Actuary, the Chief Risk Officer and the Chief Financial Officer of SCOR Global Life. Business opportunities going beyond the stipulations of these guidelines are subject to a special referral procedure at two key levels in order to ensure that the business respects defined risk-adjusted return criteria and risk tolerance limits. These cases are examined at the SCOR Global Life level by the Life Actuarial and Risk Department, and where applicable, the Finance Department. These departments are located across Cologne and Paris. Cases which may have a significant impact on the balance sheet of the Group are additionally reviewed by the Group Risk Management function. Thresholds or conditions for a referral to Group Risk Management are defined in specific guidelines.
Life The Group's Life global claims department, located in Paris, is in charge of tasked with implementing the general claims handling policy for SCOR Global Life, as well as of worldwide control, reporting procedures and commutation management of claim portfolios. The claims handling function is performed by local claims teams, located among other cities in Paris, Charlotte, Kansas City, Zurich, London, Singapore and Cologne that review process and monitor reported claims. The Life Claims Department supports and controls the day-to-day activity and takes over the direct management of large, litigious, serial and latent claims. Additionally, periodic audits are conducted on specific claims and lines of business. Claims processing and procedures are examined at the ceding companies’ offices with the aim of evaluating their claims adjusting process, valuation of reserves and overall performance.
These tools enable the Group to quantify its exposure in terms of a probable maximum loss (“PML”) at various levels of probability for each peril and geographic location. The overall aggregate annual PML per peril, allowing for potential
On 9 December 2010, SCOR placed a catastrophe bond, Atlas VI Capital Limited Series 2010-1, which provided the Group with EUR 75 million of protection against European windstorms and Japanese earthquakes for a risk period extending from 10 December 2010 to 31 March 2014.
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”, due to the absence of an ultimate net loss clause, contracts concluded between SCOR and these vehicles have been recognized as derivative instruments. They are considered as balance sheet protection (See Section 20.1.6 – Notes to the consolidated financial statements, Note 8 – Derivative instruments).
The risk transfer contract is based on a US population mortality index that has been weighted by age and gender in order to reflect SCOR Global Life’s portfolio in the US.
 The geographic diversification of the Group’s business by: - operating in a large number of countries, both mature and emerging; - maintaining its policy of positioning itself in strong-growth markets as Asia/Pacific and Latin America; - operating as a mixed Non-Life and Life reinsurer in China based on the license received in 2011, enabling SCOR to add Life & Health reinsurance services to the existing Non-Life activities, and;  The diversification of underwritten risks by business areas in Life reinsurance (Protection, Financial Solutions, Longevity) and in Non-Life reinsurance (Property and Casualty Treaties, Specialty Treaties, Business Solutions (large corporate accounts underwriting essentially on a facultative business/occasionally direct insurance) and Business Ventures and Partnerships)
SCOR’s competitors include independent and state-owned reinsurance companies, subsidiaries or affiliates of established worldwide insurance companies, and reinsurance departments of certain primary insurance companies. Among the Group’s major competitors there are European reinsurers (for example, Swiss Re, Munich Re and Hannover Re) and US/Bermudian reinsurers (for example, Partner Re, RGA, Ace, Axis Capital, Transatlantic Re, Odyssey Re, General Re and Everest Re). Also Lloyd’s of London is recognized as a major competitor.
 For Specialty Treaties: gross premiums increased by 4% at constant exchange rates, to EUR 724 million, of which 2 percentage points relate to the renewal of the large quota-share deals in Asia.
7.1 Brief description of the Group and of the position of the issuer 78 7.2 List of issuer’s significant
After the payment of the 2014 dividend, shareholders’ equity increased from EUR 4,980 million at 31 December 2013 to EUR 5,729 million at 31 December 2014.
(1) Refer to Section 9.2.6 – Calculation of financial ratios (2) Excluding life reinsurance contracts that do not meet the risk transfer criteria (presented in the investment income line of the 2013 Registration Document).
Operating income for the year ended 31 December 2014 amounted to EUR 826 million as compared to EUR 581 million in 2013 and EUR 645 million in 2012 benefiting from strong technical performance from SCOR Global Life, the robust profitability of SCOR Global P&C and the acquisition of Generali U.S. in spite of challenging market conditions.
In 2014, gross written premium increased by 1.8% compared to 2013. At constant exchange rates the growth is 2.7%, in line with the assumption of EUR 5 billion annual gross written premiums indicated in the January 2014 renewals disclosure.
On 1 November 2012, as part of its policy of diversifying its capital protection tools, SCOR successfully placed a new catastrophe bond (“cat bond”), Atlas Reinsurance VII Limited, which provides the Group with twofold protection of USD 60 million (“Class A Notes”) against US hurricanes and earthquakes, and EUR 130 million (“Class B Notes”) against European windstorms, for a risk period extending from 1 January 2013 to 31 December 2015. The loss payments covered by the Class A Notes are based on market share factors applied to the market insured loss, as reported by PCS for the US on an annual aggregate basis. Class B Note losses are covered on per-occurrence basis, using the PERILS index. These catastrophe bonds are accounted for as reinsurance contracts, due to the presence of an ultimate loss clause.
Refer to Section 20.1.6 – Notes to the consolidated financial Statements, Note 14 – Financial debts for a description of the subordinated loans and bonds issued by SCOR, including any reimbursements that occurred during the year.
FINANCIAL LEVERAGE As at 31 December 2014, the Group’s financial leverage was 23.1% as compared to 21.2% at 31 December 2013. This ratio is calculated as the percentage of subordinated debt (1) compared to total shareholders’ equity plus subordinated debt.
10.5 Sources of financing relating to the future investments by the company and to its property, plant and equipment While maintaining strict respect of the criteria defined by its strategic plan, SCOR will continue to consider any available and appropriate sources of financing to ensure continued achievement of its strategy.
SCOR Global P&C announced on 10 February 2015 that it recorded a 2.4% increase in gross written premium to EUR 2.8 billion during the January 2015 renewals.
The main business line developments at the 1 January 2015 renewals are as follows: Treaty P&C renewals For P&C Treaties: gross premiums increase by 0.9% at constant exchange rates to EUR 2.024 billion.
Specialty Treaty For Specialty Treaties: gross premiums increase by 6.5% at constant exchange rates to EUR 788 million.
A small number of transactions have also been completed in other countries, and the deal prospecting pricing and structuring is ongoing for potential deals in Continental Europe and North America. Financial Solutions Like Longevity, the Financial Solutions market is lumpy in nature, mostly including one-off deals which are typically dependent on client and market specificities. SCOR Global Life is managing an active pipeline of opportunities across the globe.
14.1 Information on the members of the Board of Directors and Senior Management 118 14.2 Administrative, management, and supervisory bodies and Senior Management conflicts of interest 133
Moreover, certain SCOR directors participate, or have participated, on the Boards of Directors of the Group’s subsidiaries and received directors’ fees in 2014 and/or 2013 as follows: 2014 2013 SCOR Holding (Switzerland) AG Peter Eckert CHF 5,000 CHF 5,000 SCOR Switzerland AG Peter Eckert CHF 21,000 CHF 23,000 SCOR Reinsurance Asia Pacific Ltd Daniel Valot USD 12,000 USD 9,000 SCOR UK Company Ltd Peter Eckert GBP 33,500 GBP 32,000 SCOR Reinsurance Company Kory Sorenson USD 18,900 USD NA SCOR Global Life Americas Reinsurance Company Kory Sorenson USD 27,000 USD NA SCOR Global Life USA Reinsurance Company Kory Sorenson USD 27,000 USD NA
(3) The fixed remuneration of Chairman and Chief Executive Officer has not changed since 1 January 2008
(2) Since 2009, 100% of shares and stock options granted are submitted to performance conditions. The value is calculated according to the same assumptions as those used for the Group accounts (IFRS 2 standard). Please refer to the Sections 17.2.2 and 17.2.3 for the details of the shares and stock options granted to the Corporate Officer
(1) The stock options and performance shares granted to the Corporate Officer in 2014 represent: - a percentage of 0.117% of the share capital; - a percentage of 8.06% compared to the total of 2014 allocations; - a percentage of 52.1% compared to his global remuneration.
The amount of the additional pension guaranteed by the Group varies from 5% to 50% (by a growth of maximum 5% per year) of the average compensation over the last five years, depending on seniority acquired in the Group at retirement. The additional pension guaranteed by the Group is defined after deductions of the pensions paid out through the compulsory schemes thus this additional pension shall in no case exceed 45% of the reference compensation. The pension benefits offered to the members of the Executive Committee who are not French citizens are comparable to the pension benefits offered to those who are French citizens.
The AFEP-MEDEF governance code can be referred to on the Company’s Internet site (www.scor.com) or on the MEDEF’s Internet site (www.medef.com).
17.1 Number of employees 152 17.2 Information on shareholdings and stock options or Company stock purchases by members of Administrative and Management bodies 153 17.3 Plans providing employee participation in Company 161 17.4 Defined pension schemes 172
Total 418,027 8,073,518 François de Varenne - 7,308 16/09/2005 15.90 116,197 16/09/2009 to 15/09/2015
Finally, in compliance with the AFEP and MEDEF recommendation 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.
Denis Kessler 2004 Plan – Tranche A 18,750 14.40 270,000 10/01/2005 2004 Plan – Tranche B - - 10/11/2005 2004 Plan – Forfeiture – redistribution 26,250 17.97 471,713 01/09/2007 2005 Plan 45,000 17.97 808,650 01/09/2007 2006 Plan 55,000 14.88 818,400 05/07/2008 2007 Plan 80,000 15.17 1,213,600 25/05/2009 2008 Plan 75,000 17.55 1,316,250 08/05/2010 2009 Plan 125,000 18.885 2,360,625 17/03/2011 2010 Plan 125,000 19.815 2,476,875 03/03/2012 2011 Plan 125,000 22.61 2,826,250 08/03/2013 2011 – 2019 Long Term Incentive Plan 125,000 - - 02/09/2017 2012 Plan 125,000 26.33 3,291,250 04/05/2014 2013 Plan 125,000 - - 06/03/2015 2014 Plan 125,000 - - 05/03/2016 TOTAL 1,175,000 15,853,613 Frieder Knüpling 2006 Plan 5,000 14.88 74,400 24/11/2008 2007 Plan 5,000 15.17 75,850 25/05/2011 2008 Plan 15,000 16.55 248,250 27/08/2012 2009 Plan 15,000 18.885 283,275 17/03/2013 2010 Plan 32,000 19.815 634,080 03/03/2014 2011 Plan 40,000 - - 08/03/2015 2011 – 2019 Long Term Incentive Plan 40,000 - - 02/09/2019 2012 Plan 40,000 - - 20/03/2016 2013 Plan 40,000 - - 06/03/2017 2013 – 2021 Long Term Incentive Plan 40,000 - - 06/03/2021 2014 Plan 40,000 - - 05/03/2018 TOTAL 312,000 1,315,855 Benjamin Gentsch 2007 Plan 50,000 15.17 758,500 25/05/2009 2008 Plan 24,000 17.55 421,200 08/05/2012 2009 Plan 32,000 18.885 604,320 17/03/2013 2010 Plan 40,000 19.815 792,600 03/03/2014 2011 Plan 40,000 - - 08/03/2015 2011 – 2019 Long Term Incentive Plan 40,000 - - 02/09/2019 2012 Plan 40,000 - - 20/03/2016 2013 Plan 40,000 - - 06/03/2017 2014 Plan 40,000 - - 05/03/2018 TOTAL 346,000 2,576,620 Mark Kociancic Plan 2006 4,000 14.88 59,520 05/07/2008 Plan 2007 7,000 15.17 106,190 25/05/2011 Plan 2008 7,500 16.55 124,125 27/08/2012 Plan 2009 7,500 18.885 141,638 17/03/2013 Plan 2010 7,500 19.815 148,613 03/03/2014 Plan 2011 7,000 - - 08/03/2015 2011 – 2019 Long Term Incentive Plan 7,000 - - 02/09/2019 Plan 2012 13,000 - - 20/03/2016 2013 Plan 40,000 - - 06/03/2017 2013 – 2021 Long Term Incentive Plan 40,000 - - 06/03/2021 2014 Plan 40,000 - - 05/03/2018 TOTAL 180,500 580,085 Paolo De Martin 2007 Plan 50,000 15.17 758,500 25/05/2011 2008 Plan 36,000 17.55 631,800 08/05/2012 2009 Plan 48,000 18.885 906,480 17/03/2013 2010 Plan 48,000 19.815 951,120 03/03/2014 2011 Plan 48,000 - - 08/03/2015
Refer also to Section 20.1.6 – Notes to the consolidated financial statements, Note 17 – Provisions for employee benefits. In 2014, the Compensation and Nomination Committee observed the validation of 100% of performance conditions attached to the 2012 options plans as defined in the 2012 reference document.
This authorization was given for a period of twenty fourth months from 25 April 2013 and had canceled and replaced, for the unused portion thereof, the previous authorization as at 3 May 2012.
Requirement of presence at the company as at 2 March 2012 Performance conditions Treasury shares included No holding period 219 190,000
For the number of stock options held on the issuer and on the companies referred to previously and exercised during the financial year by the ten employees of the issuer or these companies, whose number of shares thus purchased or subscribed is the highest, as well as the stock options granted during the financial year by the issuer and by any company included in the scope of allocation of the options to the ten employees of the issuer and of any company included in such scope whose number of stock options thus granted is the highest, refer to table in Section 17.2.2 – Stock options held by the members of the Executive Committee and other company officers as at 31 December 2014.
Annuity or lump sum benefit paid at normal retirement age. The amount is equal to the accrued savings and depends on the retirement date.
Authorization to sign the amendment # 6 to the Multicurrency Revolving Letter of Credit Facility Agreement between SCOR SE and BNP Paribas, as amended and authorization of a consolidated version of the Convention and its 6 amendments.
The consolidated financial statements were presented by Group Management to the Audit Committee. The Management and the Audit Committee report to the Board of Directors, which authorized the consolidated financial statements on 4 March 2015.
SIC-12 - Consolidation – Special Purpose Entities. The standard establishes a single control model that applies to all entities. It requires management to exercise judgment to determine which entities are controlled, and therefore are required to be consolidated by a parent. The adoption of IFRS 10 had no impact on the consolidation of investments held by the Group.
Interest on debt instruments is calculated in accordance with the effective interest method, which includes the amortization of any premiums or discounts and is recorded in the statement of income.
The Group provides disclosures on the measurements of those financial instruments held at fair value, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:  Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;  Level 2: models prepared by internal and external third parties using market inputs; and  Level 3: inputs for the asset or liability which are not based on observable market data (unobservable inputs).
However, it is difficult to accurately value the amount of reserves required, especially in view of changes in the legal environment, including civil liability law, which may impact the development of reserves. While this process is complicated and subjective for the ceding companies, the inherent uncertainties in these estimates are even greater for the reinsurer, primarily because of the longer time period between the date of an occurrence and the request for payment of the claim to the reinsurer, the diversity of contract development schemes, whether treaty or facultative, dependence on the ceding companies for information regarding claims, and differing reserve practices among ceding companies. In addition, trends that have affected development of liabilities in the past may not necessarily occur or affect
The share of the reinsurance business of Generali U.S. included in SCOR’s consolidated income corresponds to the results generated during the period from 1 October 2013, the date of acquisition by the Group, up to the end of the reporting period, 31 December 2013.
The additions to tangible assets in 2014 were mainly related to the on-going construction of the Singapore office in which SCOR purchased four units of an additional floor and to the leasehold improvements in other properties for a total
Cash and cash equivalents include short-term deposits and investments, which mature less than three months from the date of the initial investment and earn interest based on the daily rates for short-term deposits. Money market funds meeting certain criteria are also classified as cash equivalents. The Group’s liquidity, defined as cash, cash equivalent, short-term government bonds with maturities above three months and below twelve months and bank overdrafts, which is well diversified across a limited number of banks, amounts to EUR 940 million as at 31 December 2014 (2013: EUR 2,120 million).
Tax cash outflow during the year was EUR 275 million (2013: outflow of EUR 163 million and 2012: outflow of EUR 214 million). 2014 outflow includes exceptional tax payments of EUR (144) million resulting mainly from an expected one-time payment in respect of the Generali U.S. acquisition.
In 2011, SCOR drew EUR 75 million under the contingent capital facility due to the exceptional first quarter natural catastrophe events. On 16 May 2012, SCOR signed another natural catastrophe financial coverage facility in the form of a contingent capital facility with UBS. This facility was an extension of its pre-existing 2010 contingent capital facility. Under this equity line, SCOR benefited from an additional EUR 75 million financial coverage from 1 January 2012 to 31 December 2013, thereby increasing its contingent capital facility over this period from EUR 75 million to EUR 150 million.
Failure of an operating company to meet the local regulatory capital requirements of the jurisdiction in which it operates could lead to regulatory supervision or administration of the affairs of the operating company. The Group aims to achieve full compliance in respect of all regulatory and solvency requirements in the countries in which it operates.
on the basis of the number of shares eligible for dividend as at the payment date. The ex-dividend date was 29 April 2013 and the dividend was paid on 3 May 2013.
For the year ended 31 December Asbestos Environment 2014 2013 2014 2013 Gross reserves, including IBNR reserves (in EUR million) 92 93 19 14 % of Non-Life gross reserves 0.7% 0.7% 0.1% 0.1% Claims paid (in EUR million) 9 6 1 1 Net % of Group Non-Life claims paid 0.3% 0.2% 0.0% 0.0% Actual Number of claims notified under non-proportional and facultative treaties (in EUR million)
SCOR Global Life has legacy (Converium) retrocession liabilities with regard to Guaranteed Minimum Death Benefit (“GMDB”) rider options attached to variable annuity policies written in the US in its books. This GMDB business indirectly exposes SCOR Global Life to asset risk on the variable annuity policyholders’ funds. These funds are not held by SCOR Global Life, the assets remain with the originating ceding companies.
Defined contribution plans include plans whereby an employer makes periodic contributions to an external plan which manages all administrative and financial aspects. These external plans relieve the employer of all future obligations and manage the payment to employees of all amounts which are due (e.g. National insurance pension scheme, complementary pension scheme (AGIRC / ARRCO in France), defined contribution retirement plans). The payments made by the Group are expensed during the period in which the expense was incurred.
A plan amendment to the defined benefit plan in Switzerland occurred in the first quarter 2014. The main changes to the plan are a reduction in the conversion rate, an increase in the normal retirement age from 62 to 64 years and a 1% increase in retirement credits. Some pension plan in the U.S have been frozen or terminated in 2014. These changes resulted in a reduction of the defined benefit obligation. The corresponding income is recorded as a reduction of past service cost.
granted Estimated price on grant date 30 July 2014 31 July 2016 3,490 EUR 24.235 5 November 2014 6 November 2016 7,500 EUR 24.475 5 November 2014 6 November 2018 27,500 EUR 24.475 1 December 2014 2 December 2017 7,000 EUR 25.18 1 December 2014 2 December 2019 21,000 EUR 25.18
Non-French residents 4 years - 8 years - 4 years Dividend 5.58% 5.58% 5.58% 5.58% 5.58% Risk-free interest rate 0.78% 0.804% 1.51% 1.428% 1.613%
In the 2013 finance bill an additional 7% exit tax of 2010 on the capitalization reserve position as at 31 December 2009 was enacted resulting in an additional income tax expense in the year 2012 of EUR 12 million.
(1) Operating and administrative expenses include Generali U.S. costs from October 2013 onwards
Company’s financial statements for prior year are settled by the Board of Directors;  in addition, in the case of dismissal, the amount of the variable part of his compensation for current year will be (i) determined on the basis of the variable compensation for prior year and prorated on the basis of the departure date for the current year, and
In order to ensure that SCOR Global Life is continually kept up-to-date with biometric trends and scientific developments, SCOR Global Life uses the expertise of five dedicated Research & Development centers within the Life Central Actuarial and Underwriting Department to analyze and assess the key factors underlying mortality, longevity, LTC, policyholder
See section 4.1.1 C – Interdependence of the Non-Life and Life Reinsurance Businesses for a detailed description. SCOR manages its exposure to catastrophes through selective underwriting practices, especially by limiting its exposure to certain events in certain geographic zones, by monitoring risk accumulation on a geographic basis and by retroceding a portion of those risks to other selectively chosen reinsurers.
Credit risk is the risk that one party to a financial instrument or other asset (such as retrocessionaires) will cause a financial loss to the other party by failing to discharge an obligation. SCOR is mainly exposed to credit risks from bond and loans portfolios, receivables from retrocessionaires, receivables and deposits with cedents, receivables from non- (re)insurance debtors, cash deposits at banks, deposits with custodians, credit risk through its Credit and Surety portfolio, future profits of Life reinsurance treaties and default of pool members. Refer to section 4.1.14 – SCOR is Exposed to Losses Due to Counterparty Default Risks or Credit Risks for details. The processes for managing the respective risks and methods used to measure the risks are described below.
See section 4.1.6 – SCOR may be adversely Affected if its Cedents, Retrocessionaires, Insurers or Members of Pools in Which it Participates Do Not Respect their Obligations, for the risk of non-performance of retrocessionaires. The policy for the management of retrocessionaire credit risk is entrusted to the Security Committee who is responsible for analyzing the financial security of each retrocessionaire and defining the terms and conditions and limits of amounts ceded per retrocessionaire, per rating and per geographical area. The Security Committee meets regularly and pays particular attention to the retrocessionaires’ default risk in the treaty renewal period.
(1) The interests for perpetual debt as at 31 December 2014 represent EUR 54 million, on a yearly basis (2013: EUR 49 million)
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the group as at December 31, 2014 and of the results of its operations for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union.
The related-party agreements executed in 2014 or continued during 2014, as defined by Articles L. 225-38 and following of the French Commercial Code have been the subject of a specific report by the statutory auditors in Section 19.3. The SCOR SE’s corporate accounts for the financial periods ending 31 December 2014, 2013 and 2012, included respectively in Appendix A of this Registration Document, in appendix A of the Registration Document filed with the Autorité des marchés financiers on 5 March 2014 under the number D.14-0117 and in appendix A of the Registration Document filed with the Autorité des marchés financiers on 6 March 2013 under the number D.13-0106 with the Autorité des marchés financiers, have been the subject of reports by the statutory auditors, featured respectively in Appendix A of this Registration Document, in appendix A of the Registration Document filed with the Autorité des marchés financiers on 5 March 2014 under the number D.14-0117 and in appendix A of the Registration Document filed with the Autorité des marches financiers on 6 March 2013 under the number D.13-0106.
(in EUR) Number 31/12/2011 1,512,546,485 192,021,303 Exercise of subscription option 10.90 35,948 283,161.40 108,671.80 Exercise of subscription option 15.90 90,400 712,078.29 725,281.71 Exercise of subscription option 18.30 73,768 581,068.49 768,885.91 Cancellation of treasury shares NA 219,250 1,727,026.18 None Exercise of subscription option 17.58 188,500 1,484,809.28 1,829,020.72 Exercise of subscription option 15.63 193,550 1,524,587.99 1,500,598.51 31/12/2012 1,515,405,164 192,384,219 Exercise of subscription option 10.90 70,591 556,043.35 213,398.55 Exercise of subscription option 15.90 105,835 833,659.36 849,117.14 Exercise of subscription option 18.30 143,936 1,133,779.88 1,500,248.92 Cancellation of treasury shares NA 880,470 6,935,437.80 None Exercise of subscription option 21.70 29,500 232,370.68 407,779.32 Exercise of subscription option 17.58 240,500 1,894,411.84 2,333,578.16 Exercise of subscription option 15.63 60,000 472,618.34 465,181.66 Exercise of subscription option 15.63 274,950 2,165,773.53 2,131,694.97 Exercise of subscription option 14.917 314,850 2,480,064.73 2,216,552.72 Exercise of subscription option 17.117 11,000 86,646.70 101,640.30 31/12/2013 1,518,348,725.55 192,757.911 Exercise of subscription option 10.90 46,534 366,547.03 140,673.57 Exercise of subscription option 15.90 30,188 237,790.04 242,199.16 Exercise of subscription option 18.30 34,050 268,210.91 354,904.09 Cancellation of treasury shares NA 777,454 6,123,983.62 None Exercise of subscription option 21,70 3,000 23,630.92 41,469.08 Exercise of subscription option 17,58 90,000 708,927.51 873,272.49 Exercise of subscription option 15,63 111,250 876,313.17 862,524.33 Exercise of subscription option 14.917 152,500 1,201,238.28 1,073,604.22 Exercise of subscription option 17.117 2,000 15,753.94 18,480.06 Exercise of subscription option 18.40 239,200 1,884,171.77 2,517,108.23 31/12/2014 1,517,825,442.53 192,691,479
For further detail please refer to Section 20.1.6 - Notes to the consolidated financial statements, Note 13 - Information on share capital, capital management, regulatory framework and shareholders' equity and to Appendix A – 1.5 - Notes to the corporate financial statements, Note 5 - Shareholders' Equity.
Each share entitles its holder to a share (in direct proportion to the number and to the par value of the existing shares) in the corporate assets, the profits or the liquidation dividend.
24 DOCUMENTS ON DISPLAY Throughout the period of validity of the Registration Document, the bylaws and any other document required by law may be consulted and are freely available upon request from the registered office of the Company at 5 avenue Kléber, 75016 Paris.
The information published by SCOR within the last 12 months (from 5 March 2014 to 4 March 2015) is available for downloading from the following sites:  Autorité des marchés financiers (AMF):  Bulletin des Annonces Légales Obligatoires (BALO):  SCOR:  L’info financière:
Redemption of loan granted to SCOR Global Life SE In 2013, SCOR SE granted a EUR 202 million hybrid loan and a USD 228 million bridge loan to SCOR Global Life SE to fund the acquisition of Generali U.S. In 2014, the USD 228 million bridge loan has been fully paid back by SCOR Global Life SE.
Investments in associates are initially recorded at historical acquisition cost, including expenses. The fair value of investments in associates is an estimated value based on the utility of the investment to the Company and on its market value (in light of its actual share price, the revalued shareholders’ equity, the actual results and the future outlook).
The EUR 202 million hybrid loan granted to SCOR Global Life SE in 2013 to fund the acquisition of Generali U.S. by SCOR Global Life Americas Holding has been converted into a perpetual loan in 2014 at 5.90% until 30 November 2018, floating thereafter.
The USD 228 million bridge loan to SCOR Global Life SE to fund the acquisition of Generali U.S. has been fully repaid during the year.
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 equalizes, 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.
SCOR SE has signed agreements with different financial institutions concerning the granting of letters of credit for EUR 461 million.
The Audit Committee is composed of Daniel Valot (Chairman), Peter Eckert, Guillaume Sarkozy (as representative of Malakoff Médéric Group), Guylaine Saucier and Kory Sorenson. Each of its members is independent.
 Ethical and internal control responsibilities: In this context, the Audit Committee is responsible for ensuring that internal procedures relating to the collection and auditing of data, guarantee the quality and reliability of the Group’s financial statements. The Audit Committee is also in charge of reviewing agreements with related parties (“conventions réglementées”), analyzing and responding to questions from employees with regard to internal controls, the preparation of financial statements and the treatment of internal accounting books and records.
The Risk Committee members are Peter Eckert (Chairman), Thierry Derez, Charles Gave, Guylaine Saucier, Kory Sorenson, Claude Tendil, Daniel Valot and Fields Wicker-Miurin. Each of its members is independent.
The Committee submits recommendations concerning compensation packages for the executive corporate officers and members of the Executive Committee of the Group, pensions, stock allotment plans and stock option plans or stock subscription plans to the Board of Directors and examines proposals related to composition, organization and operation of the Board of Directors and its Committees. Its missions are described in the Board Internal Charter.
The composition of this Committee will be determined later by the Board of Directors, upon the recommendation of the Compensation and Nomination Committee after the Annual General Meeting held on 30 April 2015.
The calculation of the variable compensation of the Chairman and Chief Executive Officer is based on 50 % of financial objectives and 50 % of personal objectives, each of these personal objectives are equally weighted.
The variable annual compensation related to 2014 fiscal year has been determined by the Board of Directors for the President and Chief Executive officer on an overall percentage of achievement for the financial objectives of 97.2% and an overall percentage of achievement for the personal objectives of 150%. This variable annual compensation is paid in one time in March 2015. For confidentiality reasons, this document does not mention the achievement rate of each of the personal objectives.
Description corporate officer (“mandataire social”) amount to EUR 28 million. The increase of EUR 7.5 million between 2013 and 2014 mainly reflects the evolution of the technical assumptions and tax increases: EUR 1.8 million due to the 0.5% decrease in the technical rate, EUR 1 million due to the 1.18 % decrease in the discount rate, EUR 2.4 million due to an increase in the pension tax rate (from 30% to 45% for French beneficiaries) when pension annuities are above 8 annual social security ceilings. The remaining part corresponds to the acquisition of an additional year of rights.
SCOR operates an “Internal Control System Competence Center” (ICS-CC) which reports to the Group Risk Management Department. Core objective of this competence center is to bundle the ICS knowledge in order to foster a consistent group wide ICS approach and application of ICS standards. The ICS-CC consists of experts, who are dedicated to the coordination of the internal control activities formalization within the Group and its divisions and support
 Concerning claims management, the definition of a global claims and commutations management policy for all Treaty, Facultative and Specialty business of SCOR Global P&C is carried out by the Claims & Commutations Department; this department manages major, serial, contentious and latent claims. In addition, audits of the clients’ claim departments are conducted by claim experts from the principal entities of SCOR in order to review important files and to provide technical support to these cedents.
 With respect to claims, claims exceeding a predefined threshold are reviewed by the Central Actuarial & Underwriting Department of SCOR Global Life.
 SCOR Global Investments SE (SGI) is in charge of managing all assets for which it has been certified by the French financial market regulatory body (AMF). SGI manages portfolios of assets directly through mandates provided to SGI by the Group and to the Group’s subsidiaries. Assets are locally managed by external asset managers when the local regulation imposes it.
CAPITAL (SHIELD POLICY) Framework that protects SCOR shareholders, ensuring that they do not become SCOR’s retrocessionaires. The capital shield is made up of three main pillars: capital buffer, risk appetite framework and hedging (retrocession, ILS, contingent capital etc.).
EMBEDDED VALUE 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.
UNDERWRITING RESERVES Amounts that an insurer or reinsurer must place in reserves in order to pay out on claims insured, and on liabilities arising from policies written.
Male Female Total Male Female Total Male Female Total Permanents contracts 148 130 278 173 139 312 151 115 266 Fixed-Term contracts 11 21 32 13 14 27 7 9 16 Trainees 50 52 102 62 71 133 53 44 97
- In France, the single document for the evaluation of occupational risks is reviewed and updated to prevent all the potential or actual occupational risks, regular medical appointments are organized by the occupational health department for the employees, support is provided for stress management especially through the sports association (a fitness room is located in the Kléber site), support is provided to employees experiencing difficulties at work: counselling service (Réhalto).
 A community called “SCOR Women's Network” was created on Loop (the Corporate Social Network) in April 2014.
In Germany, the whole building has also been adapted to the mobility of disabled people. An integration management program aiming to provide the right conditions to help certain employees return to work after long-term sick leave is in place, In Switzerland, support can be offered to the disabled employees who are back to the company after a long sick leave, which implies a progressive level of challenges approach, according to their situation.
Assistance from external service providers mainly consists of IT development and maintenance as well as maintenance and operations of the building from which SCOR conduct its activities. The diligences stated above are applied to these outsourcing contracts.
Since 2013 a Group Compliance Policy was issued summarizing SCOR’s compliance approach which includes preventive, detective and responsive measures. The Policy consolidates the overarching principles, requirements, tools and processes stated in the Group Compliance Policies and Guidelines and also contributes to SCOR’s efforts towards a more formalized/ documented approach which regulators and others increasingly require. The Policy shall also contribute to the efficient coordination of compliance activities between Group and Hub/locations as it documents current practices on interactions and reporting of Group/Hub and local compliance functions. To embed the Group Compliance Policy and other legal & compliance requirements (e.g. anti-fraud, anti-bribery, antimoney laundering and sanctions compliance, anti-trust/competition law) and latest developments in those areas into the organization, training sessions targeted for underwriters, claims and accounting staff were also held during 2014 in most of the Hubs and other locations.