Scor SE · EURONEXT:SCR
Scor — BofAML Conference 2014
27 slides from Scor's conference presentation, Oct 2, 2014
Slide 1: Low rates and heavy regulation: how to deliver shareholder returns?
Low rates and heavy regulation: how to deliver shareholder returns? Denis Kessler, CEO & Chairman of SCOR SE BofAML conference London October, 2nd 2014
Slide 2: 2014 BofAML conference
2014 BofAML conference 1 SCOR’s strategy delivers best in class shareholders value creation 2 SCOR’s business model is fit to face the current industry headwinds 3 SCOR maintains its focus on optimality and confirms the “Optimal Dynamics” targets 2
Slide 3: SCOR is a Tier 1 global reinsurance group
SCOR is a Tier 1 global reinsurance group 4000+ clients around the world 39 offices across 5 continents € 10.9 billion1) gross written premiums in 2013 € € 4.5 billion 2013 Life embedded value A leading global reinsurer € 897 million operating cash flow in 2013 Denis Kessler "Outstanding Contributor
Slide 4: SCOR's tier 1 status achieved through four cornerstones
SCOR’s tier 1 status has been achieved thanks to the successful execution of its four cornerstones and its relentless focus on profitability and solvency 4 key cornerstones Strong High Controlled risk Robust capital franchise diversification appetite shield Deep presence in By Life and Non-Life
Slide 5: SCOR has regularly increased its Net Worth
SCOR has demonstrated the capacity to regularly increase its Net Worth, shrugging off financial, and natural catastrophes as well as macro external shocks SCOR’s shareholders’ equity since 2006 in € millions European sovereign S&P’s ratings Liquidity crisis debt acute crisis Jun‐13: Acquisition of G
Slide 6: SCOR's 3 engines deliver robust and consistent profitability
SCOR’s 3 engines deliver robust and consistent profitability 97% Normalized CR% YTD P&C combined ratio1) trending downwards and in 95% line with the “Optimal Dynamics” assumption (93-94%) 93% Q4'10 Q4'11 Q4'12 Q4'13 7.3% 7.4% 7.4% 7.2% 7.1% Stable Life technical margin, well within the “Optimal Dyna
Slide 7: SCOR provides superior and stable returns to its shareholders
SCOR provides superior and stable returns to its shareholders1) 20% Reinsurers Average Insurers Banks 15% Average annual TSR2) 2005-2014 YTD 10% Average 5% 0% 15% 20% 25% 30% 35% 40% 45% 50% -5% -10% Standard deviation annual TSR2) 2005-2014 YTD 1) Source Factset. Peers shown in this analysis are: R
Slide 8: 2014 BofAML conference
2014 BofAML conference 1 SCOR’s strategy delivers best in class shareholders value creation 2 SCOR’s business model is fit to face the current industry headwinds 3 SCOR maintains its focus on optimality and confirms the “Optimal Dynamics” targets 8
Slide 9: Low rates and regulatory environment are main headwinds
Low rates and regulatory environment are among the main headwinds in today’s reinsurance industry Macroeconomic Regulatory Increased Evolving uncertainties evolutions Supply demand (e.g.: alternative capital) patterns Reinsurance industry 9
Slide 10: Macroeconomic uncertainties: SCOR is prepared for different scenarios
Macroeconomic uncertainties: SCOR is prepared for a whole range of different scenarios Downside risks for the global economy remain1), SCOR is ready to face different macroeconomic scenarios with central bankers still calling the shots Increased geopolitical risks 1 2 3 4 5 Foreign exchange risk
Slide 11: Macroeconomic uncertainties: asset portfolio can benefit from a global recovery
Macroeconomic uncertainties: SCOR’s asset portfolio can benefit from a global recovery The current investment portfolio is highly liquid, 66% of invested assets are denominated in enabling to quickly seize market opportunities currencies where interest rates are increasing Total invested assets as a
Slide 12: SGI confirms a return on invested assets above 3.0% by 2016
Macroeconomic uncertainties: SGI confirms a return on invested assets above 3.0% by 2016 Return on invested assets vs. SGI benchmark Expected 2016 return on invested assets Return Forecast 4.5% 4.0% 4.0% 3.7% 5.6% Inflationary express 3.5% 3.2% 3) 3.0% 3.0% recovery 3.0% 2.6% 2.3% 2.5% 1.8% 1.7% 2.0
Slide 13: Regulatory evolutions: SCOR well positioned
Regulatory evolutions: SCOR is well positioned to cope with or gain from regulatory evolutions Captives & US Protectionist Solvency II Systemic risk collateral trends Solvency II will apply The Financial Stability Ongoing debate on Some countries on the 1st of January Board may designate Lif
Slide 14: Increased supply: opportunities in alternative capital
Increased supply: SCOR sees opportunities in the presence of alternative capital SCOR’s diversified business model is less exposed than peers to competition from alternative capital In % of GWP, 2014 P&C Life Less than 10% of SGPC business, which 44% 56% SGL business’ direct competition with is most
Slide 15: Evolving demand: client-centric approach is a key differentiator
Evolving demand: SCOR’s strong client-centric approach is a key differentiator at times when cedants are looking for Tier 1 partners Demand for reinsurance Client-centric franchise backed by granular segmentation and pro-active is changing book monitoring, focusing on longstanding and close partne
Slide 16: SCOR's major achievements since launch of Optimal Dynamics
SCOR’s business model is fit to face the current headwinds SCOR’s major achievements since the launch of “Optimal Dynamics” SCOR successfully places a fully collateralized sidecar, Atlas X Reinsurance Ltd, and launches a SCOR finalises the integration of Generali US and repays in advance the $ 228
Slide 17: 2014 Monte-Carlo Rendez-vous confirmed SCOR's tier 1 position
The 2014 Monte-Carlo Rendez-vous confirmed SCOR’s tier 1 position in the current environment as detailed in the 2014 IR day Share price performance index Monte Carlo Rdv 108 106 104 102 100 98 96 9-Sep 10-Sep 11-Sep 12-Sep 15-Sep 16-Sep 17-Sep 18-Sep 19-Sep 22-Sep 23-Sep 24-Sep US & Bermudan Reinsur
Slide 18: 2014 BofAML conference
2014 BofAML conference 1 SCOR’s strategy delivers best in class shareholders value creation 2 SCOR’s business model is fit to face the current industry headwinds 3 SCOR maintains its focus on optimality and confirms the “Optimal Dynamics” targets 18
Slide 19: SCOR's strength relies on international expert professionals and efficient tools
SCOR’s strength relies on international and expert professionals, leveraging on innovative and efficient tools SCOR relies on international, expert and experienced SCOR continuously develops state-of-the-art tools human resources Few examples: Executive committee includes 5 nationalities out of 8
Slide 20: SCOR is on the move
SCOR is on the move 1 Continues to focus on 1 Integrates Generali US Recalibrates of risk appetite Global Insurers operations 1 and enhanced ALM process Develops US Client-focused Deepens franchise Reallocates progressively Protection 2 2 initiative globally through: 2 and selectively the portfolio
Slide 21: SCOR confirms its Optimal Dynamics assumptions
SCOR confirms its “Optimal Dynamics” assumptions Key assumptions confirmed “Optimal Dynamics” (2013-2016) “Optimal Dynamics” assumptions are GWP organic growth1) ~7% unchanged Non-Life1) ~8.5% SCOR is likely to benefit from a USD Life1) ~6% appreciation. For example USD/EUR +10% would have a pos
Slide 22: SCOR confirms Optimal Dynamics targets and shareholder remuneration policy
SCOR confirms its “Optimal Dynamics” targets and its consistent shareholder remuneration policy Two targets for the “Optimal Dynamics” plan Profitability (ROE) Target Solvency Target 1 000 bps above risk-free1) Solvency ratio2) in the rate over the cycle 185% - 220% range FY 2013: 1 129 bps 2013: 22
Slide 23: Conclusion
Can fully cope with Is on track with the SCOR is a global the current market execution of its player with a majority environment and will Optimal Dynamics of non-EURO benefit from its Tier 1 plan and reiterates its denominated assets status in both P&C profitability and and will benefit from a and L
Slide 24: Appendix
Appendix SOOR 24
Slide 25: SCOR's solvency is actively monitored through an escalation framework
SCOR’s solvency is actively monitored through a clear and flexible escalation framework Escalation capitalised Action level Over 4 buffers = Max buffer ~300% SR1) Redeploy capital Board/AGM The optimal capital range Sub-Optimal + enables the Group to Starting achieve maximum Point 2014 SR1) =231%
Slide 26: Multiple scenario analysis updated to fit current environment
Our multiple scenario analysis has been updated to fit the current economic and market environment … but its timing and its profile could be affected by some Global recovery materializes… headwinds Long-term yields (US, 10Y)1) in % “Inflationary express recovery” Global recovery in line with “expr
Slide 27: Disclaimer
Disclaimer Certain statements contained in this presentation may relate to forward-looking statements and objectives of SCOR SE, specifically statements announcing or relating to future events, trends, plans, or objectives, based on certain assumptions. These statements are typically identified by w