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Scor — Merrill Lynch Banking & Insurance CEO Conference 2008

20 slides from Scor's conference presentation, Oct 7, 2008

  1. Slide 1: SCOR's strategy is proving right

    SCOR GROUP SCOR’s strategy is proving right Merrill Lynch Banking & Insurance CEO Conference London, 7 October 2008

  2. Slide 2: Notice

    Notice Certain statements contained in this presentation are forward-looking statements, of necessity provisional, that are based on risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements. Additional information regarding ris

  3. Slide 3: Two business models were pursued in the insurance and reinsurance industry since 2001

    Two business models were pursued in the insurance and reinsurance industry since 2001 Business Model A Business Model B 1 Î Limited business diversification Î High business diversification 2 Î Business expansion into Financials Î Focus on traditional reinsurance business 3 Î Aggressive asset managem

  4. Slide 4: The financial crisis leads to a general reassessment of the business models

    The financial crisis leads to a general reassessment of the business models Business Model A appears to be less “suitable” than Business Model B in a period of a challenging financial environment 1 Î Low business diversification leads to major difficulties (e.g. monoliners, pure cat players) 2 Î Fin

  5. Slide 5: SCOR's strategy clearly based on business model B (I)

    SCOR’s strategy clearly based on business model B (I) SCOR’s strategy since 2003 Consequences 1 Î High level of reinsurance diversification Î Diversification reduces business Î Twin-engine strategy (45% Life / 55% Non-life) volatility - increasingly recognized Î by line of business and geography by

  6. Slide 6: SCOR's strategy clearly based on business model B (II)

    SCOR’s strategy clearly based on business model B (II) SCOR’s strategy since 2003 Consequences 4 Î Clear capital management strategy Î SCOR’s current capital position is Î Strict and transparent “Capital Shield” policy strong with a high level of capital Î Low capital leverage (from 46% in 2004 to 1

  7. Slide 7: SCOR's strategy increasingly appreciated by rating agencies and the financial community

    SCOR’s strategy increasingly appreciated by rating agencies and the financial community Fitch: “Our ratings for SCOR reflect the strong solvency and moderate debt Rating Agencies’ views upgrade from A- in relation to the risk profile of the Group which enjoys a large degree to A after H1 2008 of bus

  8. Slide 8: Evidence for positive reinsurance industry outlook in 2009 (I)

    Evidence for positive reinsurance industry outlook in 2009 (I) Ä Decrease in supply à Increase in demand Î Top 26 reinsurers 9% net asset Î Insurers capital need increases due value (NAV) decreases in 1H08 to the crisis Î Pricing discipline of all major reinsurers Î Difficult access to capital marke

  9. Slide 9: Evidence for positive reinsurance industry outlook in 2009 (II)

    Evidence for positive reinsurance industry outlook in 2009 (II) Historic premium growth in P&C segment in the US in % (primary + reinsurance) Recession, Recession, Financial Oil crisis Recession Hurricane Andrew WTC crisis… 25% 20% 15% 10% 5% 2009/2010 ? 0% 1971 1974 1977 1980 1983 1986 1989 1992 19

  10. Slide 10: NAV development of major reinsurance companies

    Contraction of reinsurance capital base impacts capacity Lower investment Reduction of results reduce net investment value 107% income impact capital base Increase in share buy back and dividend pay out in 104% 104% reinsurance companies (in %) NAV development of major 2007 and 2008 H1 2006 102% 102

  11. Slide 11: 2008 shows above-average claims development which need to be factored into pricing

    2008 shows above-average claims development which need to be factored into pricing Insured catastrophe losses 1980 - Sept 2008 (in USD/bn) 120 Major losses September 2008 already Major US Cat events in 2005 (KRW) 100 reach 2007 level and exceed annual amounts 2006, 2003, 2002, 2000 and almost all ye

  12. Slide 12: SCOR has anticipated the markets ahead…

    SCOR has anticipated the markets ahead… @ 2008 Monte Carlo reinsurance industry meetings Primary statements during the press conference on 7 September Î Outlook 2009: Pricing levels better than expected Î Credit crunch is affecting insurers and reinsurers Î Inflationary trends will be factored into

  13. Slide 13: …and is carefully monitoring the market and constantly fine-tuning its business portfolio

    …and is carefully monitoring the market and constantly fine- tuning its business portfolio Î There is no global pricing trend… …but rather a fragmented picture requiring close monitoring Î With a strong capital base focusing on technical profitability… … and potential to capture growth and new oppor

  14. Slide 14: SCOR well-positioned to capture growth opportunities

    SCOR well-positioned to capture growth opportunities Î SCOR is committed to its Dynamic Lift V2 targets of securing a ROE of 900 bps above risk free rate over the cycle thanks to: Î Strong ERM which has limited our exposures to monoliners and subprime Î … execution of “Capital Shield” strategy focus

  15. Slide 15: Appendix

    Appendix

  16. Slide 16: SCOR's strategic plan is built on a clear ERM risk/reward strategy…

    SCOR’s strategic plan is built on a clear ERM risk/reward strategy… The Dynamic Lift targets … … define SCOR’s risk appetite SCOR’s aims over the next 3 years: Î At the heart of Dynamic Lift’s ƒ To secure a ROE of 900 bps above risk free strategic objectives are risk and rate over the cycle return t

  17. Slide 17: …with a focus on traditional business and diversification through a twin-engine strategy…

    …with a focus on traditional business and diversification through a “twin-engine” strategy… A “twin-engine” strategy Î Is a leading P&C reinsurer with a focus on Î 5th largest Life reinsurer in the world with leading European markets and a strong position in Latin positions in Europe and in many Asi

  18. Slide 18: …based on a robust capital shield and shareholder value creation

    …based on a robust “capital shield” and shareholder value creation “Capital shield” Shareholder value Solid balance sheet (published) Strong earnings (pro-forma) in €m H1 2008 H1 2008 Investments 18 586 ƒ € 25.5 bn total assets Net combined ratio 98.7% ƒ Net technical Non-Life Gross reserves1) 19 14

  19. Slide 19: Asset Management: Cautious investment approach continues

    Asset Management: Cautious investment approach continues Total investments € 18.5 billion in €m, published H1 2008 H1 2007 Real Average investments over the period 18 636 13 931 Estate Equities Alternative 2% 5% Investments3) Total net investment results (net of Cash expenses) 314 342 14% 2% Return

  20. Slide 20: SCOR well on track - supported by profitable business engines and robust capital position

    SCOR well on track - supported by profitable business engines and robust capital position Capital – adequacy confirmed ƒ Robust balance sheet demonstrated Non-Life – managing the cycle despite financial market crisis - efficient ƒ SCOR focuses on “Capital Shield” strategy proved diversification and

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