Scor Se · EURONEXT:SCR
Scor — Q3 2008 Earnings Presentation
37 slides from Scor's earnings presentation, Nov 14, 2008
Slide 1: SCOR Group Q3 2008 Results
SCOR GROUP Q3 2008 Results SCOR weathers the storm in the financial markets 14 November 2008
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. As a result of the extreme and unpre
Slide 3: Agenda
1 SCOR weathers the storm in the financial markets 2 Q3 2008 financials 3 Reinsurance industry outlook 2009
Slide 4: SCOR weathers the storm in the financial markets
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 SCOR weathers the storm in the financial markets Strategic focus on traditional reinsurance business and diversification Prudent asset SCOR’s long- High liquidity due to management policy term s
Slide 5: A proven business strategy
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Business A proven business strategy Strategy Strategic focus on traditional reinsurance business and diversification… …an optimally-balanced reinsurance portfolio in %; Q3 YTD 2008, total € 4.3b
Slide 6: A solid balance sheet
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Solvency & A solid balance sheet Liquidity …with a strong solvency and cash flow… …supported by positive operating cash flow No capital issue in €m € 1.3bn operating cash flow in less than 2 yea
Slide 7: A defensive asset management
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Asset A defensive asset management Management …and a continuing prudent investment approach …limited exposure to financial crisis in %, invested assets of € 19.1 bn Prudent asset management poli
Slide 8: Q3 2008 financials
1 SCOR weathers the storm in the financial markets 2 Q3 2008 financials 3 Reinsurance industry outlook 2009
Slide 9: Q3 YTD 2008 published results - Highlights
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Q3 YTD 2008 published results - Highlights Î Annualized return on equity (ROE) of 10.7% despite financial crisis and high natural catastrophe activity Î Gross premiums at more than € 4.3 billion
Slide 10: SCOR generates € 280 million of net income in Q3 YTD 2008
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 SCOR generates € 280 million of net income in Q3 YTD 2008 Q3 Q3 Variation Q3 in €m 1) YTD 2007 2) Variation YTD 20073) Variation at constant YTD 2008 exchange rates published pro-forma Gross wri
Slide 11: Stable shareholders' equity despite challenging market environment
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Stable Shareholders’ equity despite challenging market environment – Book value per share at € 19.46 in €m 18% Financial leverage 18% 206 207 207 268 12 579 576 576 20 -267 -8 -23 -143 Min. Inte
Slide 12: Positive cash flow further increases cash position in Q3 YTD 2008
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Positive cash flow further increases cash position in Q3 YTD 2008 Positive net operating cash flow Q3 in €m YTD 2008 Cash position increased to € 2.9 billion at 30 September 2008 Cash and cash
Slide 13: Non-Life: Net combined ratio improved to 99.2%
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Non-Life: Net combined ratio improved to 99.2% despite increased nat cat events in 2008 Gross written premiums in €m -4.0% Gross written premiums up by 1.8% at constant exchange rates Combin
Slide 14: Life: Continuing strong operating performance
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Life: Continuing strong operating performance Gross written premiums1) in €m 1) +0.3% Gross written premiums increased by 5.7% at constant exchange rates +5.7% SCOR generated additional new
Slide 15: Asset Management: Cautious investment approach continues
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Asset Management: Cautious investment approach continues Q3 Q3 Total Investments € 19.1 billion in €m, published YTD 2008 YTD 2007 Real Estate Equities Alternative Average investments over the p
Slide 16: Reinsurance industry outlook 2009
1 SCOR weathers the storm in the financial markets 2 Q3 2008 financials 3 Reinsurance industry outlook 2009
Slide 17: Reinsurance industry outlook 2009
SCOR weathers the storm in the financial markets | Q3 2008 financials | Reinsurance industry outlook 2009 Reinsurance industry outlook 2009 Ä Decrease in supply à Increase in demand Î Pricing discipline of all major Î Insurers’ capital need increases due reinsurers to crisis Î Focus on technical pro
Slide 18: Appendices
APPENDICES Appendix A: Key figures for Q3 2008 QTD and YTD (published & pro-forma) & Adjusted Q2 2008 YTD Appendix B: Balance sheet & Cash flow statement Appendix C: Calculations of EPS, Book value per share and ROE Appendix D: Net liabilities by segments Appendix E: Details on invested assets Appen
Slide 19: A: Key figures for Q3 2008
Appendix A: Key figures for Q3 2008 Q3 Q3 QTD Q3 QTD in €m 2007 Variation 20071) Variation QTD 2008 published pro-forma Gross written premiums 1 577 1 257 +25.5% 1 460 +8.0% Net earned premiums 1 394 1 150 +21.2% 1 313 +6.2% Operating income 59 157 -62.4% 185 -68.1% Net income 38 119 -68.1% 135 -71.
Slide 20: A: Consolidated statement of income
Appendix A: Consolidated statement of income Unaudited Q2 YTD Q2 YTD Q3 Q3 QTD Q3 Q3 YTD in €m 2008 2007 QTD 2007 YTD 2007 pro- pro- pro- adjusted forma1) 2008 forma1) 2008 forma1) Gross written premiums 2 748 2 957 1 577 1 460 4 325 4 417 Change in unearned premiums -36 -73 -60 -36 -96 -109 Gross e
Slide 21: A: Q3 2008 QTD consolidated statement of income by segment
Appendix A: Q3 2008 QTD consolidated statement of income by segment Q3 QTD 2008 Q3 QTD 2007 proforma1) in €m Non- Intra- Non- Intra- Life Total Life Total Life Group Life Group Gross written premiums 693 8832) 1 577 631 828 1 460 Change in unearned premiums -5 -54 -60 -5 -32 -36 Gross earned premium
Slide 22: A: Q3 2008 YTD consolidated statement of income by segment
Appendix A: Q3 2008 YTD consolidated statement of income by segment Q3 YTD 2008 Q3 YTD 2007 pro-forma1) in €m Non- Intra- Non- Intra- Life Total Life Total Life Group Life Group Gross written premiums 1 953 2 3712) 4 325 1 948 2 469 4 417 Change in unearned premiums -27 -69 -96 -2 -107 -109 Gross ea
Slide 23: A: Adjusted Q2 2008 YTD consolidated statement of income by segment
Appendix A: Adjusted Q2 2008 YTD consolidated statement of income by segment Q2 YTD 2008 Q2 YTD 2007 adjusted proforma1) in €m Non- Intra- Non- Intra- Life Total Life Total Life Group Life Group Gross written premiums 1 260 1 488 0 2 748 1 317 1 641 2 957 Change in unearned premiums -21 -15 0 -36 3
Slide 24: B: Consolidated balance sheet – Assets
Appendix B: Consolidated balance sheet – Assets Published Accounts / Unaudited in €m Q3 2008 Q4 20071) Intangible assets 1 497 1 576 Goodwill 784 777 Value of purchased insurance portfolios 630 705 Other intangible assets 82 93 Tangible assets 30 26 Insurance business investments 16'268 16'971 Inves
Slide 25: B: Consolidated balance sheet – Liabilities & shareholders' equity
Appendix B: Consolidated balance sheet – Liabilities & shareholders’ equity Published Accounts / Unaudited in €m Q3 2008 Q4 20071) Group shareholders’ equity 3 499 3 615 Minority interests 7 33 Total shareholders’ equity 3 506 3 647 Financial liabilities 903 904 Subordinated debt 576 579 Financial d
Slide 26: B: Consolidated statements of cash flows
Appendix B: Consolidated statements of cash flows Published Accounts / Unaudited Q3 YTD Q3 YTD in €m 2008 2007 CASH AND CASH EQUIVALENTS AT JANUARY 1 2 052 837 NET CASH FLOWS FROM OPERATING ACTIVITIES 711 519 Cash flows from changes in scope of consolidation -13 -339 Cash flows from acquisitions and
Slide 27: C: Calculations of EPS, book value per share and ROE
Appendix C: Calculations of EPS, book value per share and ROE Earnings per share calculation Post-tax Return on Equity (ROE) in €m Q3 YTD Q3 YTD 2007 in €m Q3 YTD Q3 YTD 2007 2008 adjusted 2008 adjusted Net income (A) 2801) 300 Q3 2008 net income 2801) 300 Average number of closing 183 335 740 118 4
Slide 28: D: Net liabilities by segments
Appendix D: Net liabilities by segments Net liabilities Life & Non-Life in €m 18 107 +4% 18 887 43% 43% Life Non-Life 57% 57% 31/12/2007 30/09/2008 28
Slide 29: E: Unrealized gains & losses evolution
Appendix E: Unrealized gains & losses evolution Unrealized gains & losses in €m Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 20071) Q1 20081) Q2 20081) Q3 2008 Equities 28 29 23 -14 -24 -115 -128 -209 Bonds -52 -46 -115 -51 -40 -40 -181 -250 Real estates & REITS 122 122 119 122 147 156 141 123 Total 98 105 27
Slide 30: E: Investment income development
Appendix E: Investment income development Investment income QTD (before tax & investment expenses) Q2 Q3 Q3 YTD In €m QTD YTD adj. 250 Groupama guarantee impact -10 -10 211 Bonds impairments -4 -27 -30 195 14 186 Equities impairments -47 -50 -97 8 162 8 168 20 97 Real estate amortization -8 -2 -10 3
Slide 31: E: Total Corporate Bond portfolio
Appendix E: Total Corporate Bond portfolio By rating By sector in %, total € 2.3 billion in €m 1% 5% YTD 2008 In % 12% 27% AAA AA Financial 1 530 68% A Industrial 163 7% BBB <BBB Communications 138 6% NR Utilities 127 6% 36% 19% Consumer, Non-cyclical 90 4% By geography Energy 64 3% in %, total € 2.
Slide 32: E: Financials Corporate Bond portfolio
Appendix E: “Financials” Corporate Bond portfolio By rating By sector in %, total € 1.5 billion in €m 5% 4% YTD 2008 In % AAA 37% AA Bank 1 093 71% A 28% Diversified financial services 335 22% BBB <BBB Insurance 78 5% NR Real estate 24 2% Total 1 530 100% 26% By geography in %, total € 1.5 billion 4
Slide 33: E: Structured products in fixed income portfolio as of Q3 2008
Appendix E: Structured products in fixed income portfolio as of Q3 2008 Structured product portfolio € 1.1 billion of high quality; 89% AAA rating 100% Commercial MBS 75% 23% Alt-A MBS 2% 50% Subprime MBS Consumer 4% ABS1) 11% Prime non- agency MBS CDO 14% 6% MBS ABS CDO & PPS3) Principal protected
Slide 34: E: Key characteristics of subprime and Alt-A products
Appendix E: Key characteristics and performance indicators of subprime and Alt-A products Alt-A MBS (Total: USD 28.1m) Subprime MBS Prime 2nds (Total: USD 12.6m) Subprime (Total: USD 52.5m) Original average credit support 4.77% Prime 2nd Liens make up 21% 15% of subprime exposure of total subp
Slide 35: F: Deposits represent 37% of total invested assets
Appendix F: Deposits represents 37% of total invested assets, with a limited credit risk Funds withheld by cedants € 7.1 billon1) Loans and accounts receivable represents 37% of the invested assets with an average yield of approx. 3.4%, encompasses Non-Life Deposits Cash deposits with cedants: €
Slide 36: F: Debt structure
Appendix F: Debt structure Floating/ Issue First call Debt Amount Maturity Fixed Coupon + Step-up Comments date date rate Subordinated US$ 100 7 June 30 years floating first 10 years: 3-month 25 June Credited as capital by rating debt million 1999 June 2029 Libor rate + 0,80% and 2009 agencies 1,80%
Slide 37: G: Converium Final purchase price allocation
Appendix G: Converium Final purchase price allocation P-GAAP framework: final purchase price allocation Purchase of 12 months in €m 30/09/07 minority 30/09/08 adjustment interest Purchase price 1 868 8 32 1 908 Acquisition costs 11 4 1 16 Total cost of investment 1 879 12 33 1 924 IFRS Net asset at