Scor SE · EURONEXT:SCR
Scor — KBW conference 2012
26 slides from Scor's conference presentation, 2012
Slide 1: KBW conference
KBW conference Paolo De Martin, Group CFO
Slide 2: KBW conference: key messages
KBW conference SCOR successfully combines growth, profitability and solvency with an attractive shareholders 1 remuneration policy Enterprise Risk Management is embedded in SCOR’s strategic cornerstones, leading to constant 2 improvement in the understanding of the risk universe while pursuing a cap
Slide 3: SCOR has achieved significant growth over the past few years
SCOR has achieved significant growth over the past few years… SCOR has reached a top-tier position within the industry Gross written premiums, in € billions (rounded) ~9.4 2) 8.6 6.4 6.7 2) ~4.8 5.8 4.6 4.8 3.0 2.7 3.1 2.9 2.4 2.4 SCOR Global Life 1.2 4.0 ~4.6 1.0 3.1 3.3 3.7 SCOR Global P&C 1.8 2.3
Slide 4: While increasing its solvency and profitability
…while increasing its solvency and profitability SCOR has strongly increased its solvency with robust net income production Shareholders’ equity + subordinated debts, in € billions (rounded) 1.0 1.0 0.5 0.5 0.6 0.6 0.6 4.4 4.4 4.6 0.2 3.6 3.4 3.9 Subordinated debt 2.3 1.7 Shareholder’s equity 2005 2
Slide 5: TSR 2005-2011
SCOR’s twin-engine model consistently provides investors with solid and low volatile returns, and low market correlation Diversified reinsurers offer better risk-adjusted returns than pure P&C players… Pure Life Mixed players Mainly P&C 100% ROE Average TSR Beta Volatility 80% SCOR SCOR 75% 3% 0.8 P
Slide 6: SCOR's Hub structure increases the Group's productivity
SCOR’s Hub structure increases the Group’s productivity Productivity has strongly increased over the past few SCOR continues to streamline its operations years1) With its two external growth operations in € millions (rounded) (Converium and Transamerica Re) since 2007, SCOR has become a true globa
Slide 7: SCOR optimizes its cost structure, while actively investing to improve its competitive edge
SCOR optimizes its cost structure, while actively investing to improve its competitive edge SCOR’s cost structure is best-in-class 2011 Management (Operating & other) Expenses in % of Gross Written Premiums (GWP) Other expenses 0.8% Operating expenses 7.5% 15.0% Average 13.1% 8.4% 4.0% Median 10.9%
Slide 8: SCOR will continue to pursue its active shareholder remuneration policy
SCOR will continue to pursue its active shareholder remuneration policy Historically robust dividend policy SCOR aims to remunerate shareholders1) through cash dividends but, over the cycle, would not exclude other means (e.g. opportunistic share-buy back, dividend in shares), if relevant ’05 ’06 ’0
Slide 9: KBW conference
KBW conference SCOR successfully combines growth, profitability and solvency with an attractive shareholders 1 remuneration policy Enterprise Risk Management is embedded in SCOR’s strategic cornerstones, leading to constant 2 improvement in the understanding of the risk universe while pursuing a cap
Slide 10: Enterprise Risk Management is embedded in SCOR's strategic cornerstones
Enterprise Risk Management (ERM) is embedded in SCOR’s strategic cornerstones Controlled risk Robust capital High diversification Strong franchise appetite shield SCOR benefits from an extensive learning process which leads to constant improvement in its understanding of the risk universe Strong
Slide 11: SCOR benefits from an extensive learning process in understanding risks
SCOR benefits from an extensive learning process, which leads to constant improvement in its understanding of the risk universe Continuous improvement in understanding of the risks Check risk profile against target to identify risks Assess risk Management based on SCOR’s learning culture ext
Slide 12: SCOR's risk appetite remains unchanged whilst SCOR improves its assessment of risks
SCOR’s risk appetite remains unchanged whilst SCOR improves its assessment of risks SCOR’s risk profile 2011 vs. 2012 Undiversified Stand-Alone risk profile 2011 vs. 2012 3.0 Life ▬ 2012 3.0 ▬ 2011 2.0 1.0 Change in Economic Value (€bn) 0.0 1.0 -1.0 Change in Economic Value (€bn) Expected Economic p
Slide 13: The Capital Shield Strategy protects the Group and its shareholders
The Capital Shield Strategy protects the Group and its shareholders from extreme events and severe loss scenarios Different layers ensure protection of SCOR’s capital Direct hedging optimizing the risk-return profile Cat illustrative example Traditional retrocession covers for P&C and Life Cap
Slide 14: Capital shield policy and high diversification minimize capital needs
Capital shield policy for P&C and high diversification both contribute to SCOR’s relentless efforts to minimize its capital needs SCOR P&C’s economic capital needs have been Diversification between Life and Non-Life brings lowered thanks to an optimal capital shield policy further substantial capita
Slide 15: Capital management relies on the Group Internal Model
Capital management relies on the Group Internal Model, and is optimized in order to fulfill the various solvency measures Capital management Capital adequacy measures Group Internal Model (GIM)1) Regulatory requirements Rating Models (e.g. S&P1)3)) Group (Solvency I) Local 6.4 SCOR ~221% AA level of
Slide 16: SCOR's current capital structure has a high degree of financial flexibility
SCOR’s current capital structure has a high degree of financial flexibility for further optimization Active capital management over the past few years provides strong capital growth while decreasing leverage ratio1) to a level lower than European peers2) 6000 5.4 5.6 Senior debt 3) 4.8 46% 4.4 4.6 4
Slide 17: KBW conference
KBW conference SCOR successfully combines growth, profitability and solvency with an attractive shareholders 1 remuneration policy Enterprise Risk Management is embedded in SCOR’s strategic cornerstones, leading to constant 2 improvement in the understanding of the risk universe while pursuing a cap
Slide 18: SCOR Global P&C continues focusing on improving technical profitability
SCOR Global P&C continues focusing on improving technical profitability with active management of its portfolio and reinsurance fragmented cycles P&C Industry More fragmentation than ever, globally positive trend to continue Dynamics Long-tail casualty and financial lines pricing adequacy remain
Slide 19: Emerging Markets and mature rating sensitive countries share of SCOR Global P&C
Emerging Markets and mature rating sensitive countries have represented a growing share of SCOR Global P&C’s business Mature vs. Emerging countries – 2008-2011 Emerging countries 2008 2011 2008-2011 1 111 Emerging Share of Share of % GWP countries GWP GWP total GWP total GWP Growth 813 Mature and ra
Slide 20: SGPC is actively pursuing Strong Momentum's eight initiatives, adding a new one
SGPC is actively pursuing Strong Momentum’s eight initiatives, whilst adding a new one Strong Momentum’s growth initiatives 1 Increase moderately retentions over the plan 5 Access additional specialized business via U/W agencies 2 Scale up Business Solutions 6 Launch ILS risk transfer solution
Slide 21: SCOR Global Life biometric-only portfolio provides stable technical profitability
SCOR Global Life biometric-only portfolio provides stable technical profitability Life Industry Primary cedants affected by worldwide economic downturns, impacting solvency margin of Dynamics customers Assumptions 2012 Expected Growth GWP: TM: Leading global player in an industry with high barrier
Slide 22: SCOR Global Life production of significant free cashflow
SCOR Global Life production of significant free cashflow validates the strength and maturity of the franchise and its cash-repatriation capacity 2011 Free Surplus evolution Free Surplus in €m (rounded) 27.8 962.9 ‐229.9 95.0 29.7 260.0 ‐ 180.7 2 599.9 550.4 552.3 47.6 Endogenous Free Free Surplus 1
Slide 23: The current investment portfolio is well-positioned to cope with today's risks
The current investment portfolio is well-positioned to cope with today’s risks and maximizes flexibility of investment choices Strategic versus tactical asset allocation Total invested assets1): € 13.2 billion at 30/06/2012 Strategic Asset Allocation, as defined in the strategic plan SM v1.1 SAA T
Slide 24: SCOR's positive trend continues, in line with operational assumptions and targets
SCOR’s positive trend continues, with underlying profitability levels in line with its operational assumptions and targets SCOR’s operational performance is consistent with its “Strong Momentum” assumptions and targets H1’12 SMV1.11) Actuals Gross written premium The Group experiences double-digit
Slide 25: Appendix
Appendix SOOR 25
Slide 26: Disclaimer Page
Disclaimer Page 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