Scor SE · EURONEXT:SCR
Scor — AM Best conference 2013
27 slides from Scor's conference presentation, Oct 17, 2013
Slide 1: Reinsurance: Emerging vs. Mature markets
Reinsurance: Emerging vs. Mature markets AM Best conference - 17 October 2013 Denis Kessler – CEO & Chairman of SCOR
Slide 2: Emerging markets growth is key for the (re)insurance industry
Section 1 Emerging markets growth is widely recognised as key for the future of the (re)insurance industry 2
Slide 3: Investors favour insurers who prioritise emerging markets
Investors favour insurance and reinsurance companies who prioritise emerging markets, valuing their growth potential Investors see significant investment potential in Sell-side analysts highlight that growth is driven by emerging markets emerging markets Question from BofAML investors survey: “Takin
Slide 4: The Asian and Middle East insurance revenue pool is very concentrated
The Asian and Middle East insurance revenue pool is very concentrated 100% 10% 15% 20% 33% 80% 11% 23% 40% 41% 49% 48% 10% 18% 70% 60% 22% 19% 24% 16% 17% 19% 12% 20% 40% 14% 13% 23% 11% 12% 26% 19% 12% 20% 40% 19% 15% 15% 13% 30% 19% 23% 15% 12% 14% 11% 8% 0% China India Korea Singapore Indonesia T
Slide 5: Concentration and consolidation provide reinsurers with opportunities
Concentration and consolidation in emerging markets provide reinsurers with opportunities to generate economies of scale and scope Reinsurers focus their future opportunities on Emerging Markets Growth opportunities: “Reinsurance demand to cover natural catastrophes is expected to double in high
Slide 6: The growth attraction of emerging markets is clear
The growth attraction of emerging markets is clear for the (re)insurance industry Insurance has grown rapidly in emerging markets . . . .. . but ( penetration is still low Insurance industry CAGR (in %) 2001-101) World output, 20122) 2010 World insurance premiums 16% 11.0 50% 50% 1.3 84% Advanced e
Slide 7: Industry has to be cautious as emerging markets are not homogeneous
Section 2 Nevertheless, the industry has to be cautious as emerging markets are not homogeneous and face several challenges 7
Slide 8: Emerging markets are not homogeneous
Emerging markets are not homogeneous Each market has its own features Very different stages of “emerging” (BRICS are emerged) Nat cat exposure National welfare and tax systems Differing reinsurance cession rates Distribution networks Savings behaviours Legal systems Attitudes towards
Slide 9: Emerging markets do not raise the same issues for insurers and reinsurers
Emerging markets do not raise the same issues for insurers and reinsurers Insurers Reinsurers Regulatory / legal constraints Access to distribution channels Local market knowledge Competition from local players Implementation costs and risks Capital fungibility
Slide 10: Development of (re)insurance markets follows a clear path
Development of (re)insurance markets follows a clear path (Re)insurance market relative size depends on the level The patter of the insurance sector development in of GDP per capita and its growth depends principally on emerging countries is quite constant GDP growth with an elasticity significantly
Slide 11: Governments and regulators have a key role to play
Governments and regulators in emerging countries have a key role to play for the successful development of local (re)insurance markets State-owned or Direct investment caps Curtailment of capital ‘national’ reinsurers for foreign companies movement Restrictions on intra- Compulsory investments Risk
Slide 12: Many emerging markets are exposed to significant nat cat risks
Many emerging markets are exposed to significant nat cat risks Since 2009, a large part of global cat losses This trend will continue have occurred in non-peak territories1 1% 1% Top 10 Asset exposure to coastal flooding evolution in 2070 vs 9% 2007 in $ billion1) Natural catastrophe insured losses
Slide 13: Emerging and mature markets are becoming more inter-connected
Emerging and mature markets are becoming more inter-connected Due to globalization, nat cat events in emerging The 2011 Thai floods showed just how real the risks countries affect various insurance lines around the globe are Globalization is progressively spreading to all industries The growth o
Slide 14: Achieving adequate profitability can be a challenge
Achieving adequate profitability in emerging markets can be a challenge In primary life insurance, emerging markets for the In primary P&C insurance, the profitability appears to most part are profitable be broadly the same for emerging and mature markets 2012, life primary insurers 2012 better1)pro
Slide 15: Emerging countries provide both opportunities and challenges
Emerging countries provide both opportunities and challenges for the (re)insurance sector Opportunities for (re)insurers in Challenges in emerging markets A few more challenges on the emerging vs. mature markets vs. mature markets horizon Economic growth potential Achieving adequate returns Al
Slide 16: SCOR's leading presence is based on a clear strategy
Section 3 SCOR’s leading presence in emerging markets is based on a clear strategy and supported by innovative tools 16
Slide 17: SCOR is well positioned to benefit from growth in emerging markets
SCOR is well positioned to benefit from the growth in emerging markets thanks to its respected standing in these countries SCOR has a longstanding commitment in emerging … resulting in SCOR holding strong competitive countries which is expanding all the time… positions in emerging markets 1970: cr
Slide 18: SCOR has a strong footprint versus peers in emerging countries
SCOR has a strong footprint versus peers in emerging countries The share of gross written premiums is higher at SCOR versus peers thanks to the strong franchise it has developed over time Share of emerging markets GWP (in %) 25% 20% 15% 10% 5% 2008 2009 2010 2011 2012 SCOR SCOR pro forma (excl. acqu
Slide 19: Continued growth is a key element of SCOR Global Life's strategy
Continued growth in emerging markets is a key element of SCOR Global Life’s strategy Mature Markets Emerging Markets Protection Further deepen client relationships Accelerate growth in Latin America and in Asia Leverage leadership and data capabilities SGL portfolio growth assumption: ~11% C
Slide 20: SCOR Global P&C's selective approach towards emerging markets
SCOR Global P&C’s strategy takes a more selective approach towards emerging markets Key steps in strategic approach to emerging markets SGPC’s differentiating factors Select markets based on macro-economic, demographic, political and social factors Proven track-record in making the 1 Follow macr
Slide 21: SCOR has developed innovative cat-mapping capability
SCOR has developed innovative cat-mapping capability, demonstrating the diversity of risks in a specific region In the past, CBI covers would typically be trigered by isolated perils such as a fire destroying one single plant Floods risks Storm surge and Earthquake risk tsunami risks Today, the majo
Slide 22: Conclusions
Conclusions Growth is an often-cited attraction of emerging markets but there are significant challenges as well Reinsurers face a different, arguably better, set of opportunities / challenges than insurers Emerging markets are not homogeneous, and the boundary versus mature markets is blurrin
Slide 23: Appendices
Appendices SOOR 23
Slide 24: Emerging markets are a strong driver of SCOR Global P&C's growth
Emerging markets are a strong driver of SCOR Global P&C’s growth Emerging vs. mature markets – 2008-2012 SGPC GWP in € millions (rounded) Emerging countries Emerging countries 2008 2012 2008-2012 1 221 % GWP GWP GWP Growth 828 1 612 Mature and rating- Europe2) 103 117 13% sensitive countries1) Asia-
Slide 25: SCOR Global Life is also growing strongly in emerging markets
From a lower base, SCOR Global Life is also growing strongly in emerging markets Emerging vs. mature markets – 2008-2012 SGL GWP in € millions (rounded) Emerging countries 480 2008 2012 2008-2012 % GWP Emerging markets GWP GWP Growth Europe 2 16 700% 249 Asia-Pacific 104 176 69% 5 517 MEA 127 175 38
Slide 26: SCOR is further consolidating its top-tier positions globally
As well as in emerging markets, SCOR is further consolidating its top-tier positions globally N°1: Sweden N°1: Northern Europe N°4: Canada N°3: Nordic countries & CEE N°5: Canada N°4: UK N°3: Belgium N°3: CIS N°5: Benelux Top 3: Several Asian markets N°1: France N°2: South Korea N°3: France N°3: Ger
Slide 27: SCOR Global P&C's assessment of its potential in its segments
SCOR Global P&C’s assessment of its potential in the segments where it operates Treaty P&C Mature markets Emerging markets Northern Europe2) Western Europe1) South East Asia3) Eastern Europe Northern Asia4) Latin America Russia & CIS South Korea Middle East Caribbean Germany Australia Canada France