Scor Se · EURONEXT:SCR
Scor — Merger or Acquisition (July 2006)
39 slides from Scor's merger presentation, Jul 5, 2006
Slide 1: SCOR Global Life: European Roots, Global Reach
“SCOR Global Life : European Roots, Global Reach” SCOR and Revios to create together a Top-Tier Life Reinsurer 5 July 2006
Slide 2: Disclaimer
Disclaimer Certain statements contained herein are forward-looking statements including, but not limited to, statements that are predictions of or indicate future events, trends, plans or objectives, based on certain assumptions and include any statement that does not directly relate to a historical
Slide 3: SCOR acquires Revios
SCOR acquires Revios Transaction Highlights p. 04 Life Reinsurance: a Growing and Strategic market for SCOR p. 09 Revios: a Strong Franchise p. 13 Building a Top-Tier Global Life Reinsurer: SCOR Global Life p. 18 Value Creation for SCOR Shareholders p. 29 Indicative Timetable p. 36 3 “SCOR Global Li
Slide 4: Transaction Highlights
Transaction Highlights Life Reinsurance: a Growing and Strategic market for SCOR Revios: a Strong Franchise Building a Top-Tier Global Life Reinsurer: SCOR Global Life Value Creation for SCOR Shareholders Indicative Timetable
Slide 5: SCOR to acquire Revios and create SCOR Global Life, a Top-Tier Global Life Reinsurer
SCOR to acquire Revios and create SCOR Global Life, a Top-Tier Global Life Reinsurer Top Global Life Reinsurers 2004 GWP, in USD billion 10 9 8 7 6 5 4 3 2 1 0 Swiss Re RGA GE Transamerica Munich Re Hannover Re Gen Re* XL Re Source: S&P Global Reinsurance Highlights 2005 (*) Premium figures relate t
Slide 6: Transaction Overview
Transaction Overview A “twin engine” Life / P&C strategy confirmed at the Group level Strong A critical mass advantage creating a worldwide Strategic top 5 player in Life Reinsurance Rationale Powerful business fit with complementary platforms Common approach to markets and underwriting practices Ac
Slide 7: Transaction Overview
Transaction Overview Acquisition of 100% of the equity capital of Revios paid in cash Total financing needs approx. EUR 650 million Financing Rights issue approx. EUR 300 million Subordinated debt up to EUR 350 million Closing to be completed by Q4 2006, once all regulatory and antitrust approvals a
Slide 8: A Transaction in line with our strict acquisition criteria
A Transaction in line with our strict acquisition criteria 9 Solidify the Life / Non Life business mix established Strategically 9 Coherent in Moving Forward as a pillar of the strategy 9 Increased diversification and lower risk profile 9 Meet the criteria of ROE set out in Moving Forward Satisfy SC
Slide 9: Transaction Highlights
Transaction Highlights Life Reinsurance: a Growing and Strategic market for SCOR Revios: a Strong Franchise Building a Top-Tier Global Life Reinsurer: SCOR Global Life Value Creation for SCOR Shareholders Indicative Timetable
Slide 10: Life Reinsurance: a Growing and Strategic Market for SCOR (1/2)
Life Reinsurance: a Growing and Strategic Market for SCOR (1/2) The worldwide Life reinsurance market: Æ A CAGR of 10% over the last 4 years Æ 1/5th of the total worldwide reinsurance market (EUR 29 billion) Life reinsurance market base 100, 1990 500 450 400 350 300 250 200 150 100 1990 1991 1992 19
Slide 11: Life Reinsurance: a Growing and Strategic Market for SCOR (2/2)
Life Reinsurance: a Growing and Strategic Market for SCOR (2/2) The Life Reinsurance market is characterized by recurrent and long-term growth, driven by: Æ Double-digit, cycle-free growth of the primary Life insurance market Æ The mobilization of banking networks for the distribution of Life insura
Slide 12: SCOR: a Twin-Engine Group
SCOR: a Twin-Engine Group Group structure post transaction Gross written premiums SCOR Group 2005 (EUR million) 43% Life 4 000 +64% 3950 P&C 57% 3 500 3649 3 000 SCOR + Revios 2005 2 500 2407 2 000 Life 62% 1 500 1 000 SCOR Group SCOR Group + SCOR Group + P&C 38% Revios Revios 2005 Proforma 2005 Pro
Slide 13: Transaction Highlights
Transaction Highlights Life Reinsurance: a Growing and Strategic market for SCOR Revios: a Strong Franchise Building a Top-Tier Global Life Reinsurer: SCOR Global Life Value Creation for SCOR Shareholders Indicative Timetable
Slide 14: Revios: a Life Reinsurer active worldwide
Revios: a Life Reinsurer active worldwide Premium income by geographic areas GWP 2005, EUR million Other Europe Rest of the World North America 194 16 329 UK Ireland 216 Germany 355 Sweden 86 Asia Pacific 46 A staff of 277 Present in 42 countries 578 clients 14 “SCOR Global Life: European Roots, Glo
Slide 15: Revios: a high-performance Life Reinsurer
Revios: a high-performance Life Reinsurer Key Figures (in EUR million) 2003 2004 Gross Written Premiums 1307.0 1203.0 Operating Income 66.6 78.9 Consolidated net Profit 40.2 50.4 Embedded Value 558.0 592.0 The level of the Embedded Value should have increased in 2005 given the favorable environment
Slide 16: Revios: an attractive business
Revios: an attractive business A specific expertise in technical and value-added products, services and markets A strong and respected management team with highly qualified professionals Less than 4 years after its creation, Revios has gained full momentum and is today the first European specialized
Slide 17: Revios: a powerful business fit
Revios: a powerful business fit A business concept similar to SCOR Vie’s approach to the market: Based mainly on direct access to clients Stable long-term relationships with core clients and strong franchise A focus on service offering based on customized R&D and tailored solutions 17 “SCOR Global L
Slide 18: Transaction Highlights
Transaction Highlights Life Reinsurance: a Growing and Strategic market for SCOR Revios: a Strong Franchise Building a Top-Tier Global Life Reinsurer: SCOR Global Life Value Creation for SCOR Shareholders Indicative Timetable
Slide 19: A new unified brand European Roots, Global Reach
A new unified brand European Roots, Global Reach 19 “SCOR Global Life: European Roots, Global Reach”, July 5, 2006
Slide 20: European Roots, Global Reach: building a top-tier Global Life reinsurer
European Roots, Global Reach: building a top-tier Global Life reinsurer A European top-tier reinsurer with a worldwide network Total Premium income 2005: EUR 2,266 million Combined market share 2005: N°1: Sweden - 8% global Life reinsurance market N°2: Northern - 14% European Life reinsurance Europe
Slide 21: SCOR Global Life: a highly diversified Group
SCOR Global Life: a highly diversified Group SCOR Vie, GWP (2005) Revios, GWP (2005) Asia and other Asia and other 5% 28% Germany 8% France 37% North America 37% North America 27% 12% UK 18% Other Europe 28% Other Europe SCOR Vie + Revios, GWP (2005) Germany Asia and other 6% 17% 17% France North Am
Slide 22: Market complementarity ensuring business development
Market complementarity ensuring business development Main SCOR Vie markets: Main Revios markets: France Germany Italy United Kingdom Spain Sweden Korea Ireland Japan Switzerland Canada New Zealand United States: a post-merger market share of around 5% ensuring critical mass and credibility in a cons
Slide 23: A common approach to markets and underwriting practices
A common approach to markets and underwriting practices Common values and an enhanced product mix will benefit SCOR Global Life A shared philosophy of underwriting and market approach based on: Æ long-term relationships with clients founded on partnership Æ products and services adapted to the speci
Slide 24: A critical mass leading to increased profitable business growth
A critical mass leading to increased profitable business growth A larger platform will enable SCOR Global Life to: Æ invest in R&D (product innovation, demographic research) Æ provide innovative and competitive financing solutions to clients Æ fully benefit from a worldwide network and cross-selling
Slide 25: A dedicated management team with clear Corporate Governance rules
A dedicated management team with clear Corporate Governance rules As soon as the Sell & Purchase Agreement is signed, a Liaison Committee will work on the new structure Management positions at SCOR Global Life to be based on competence and not on passport Implementation of Management Letters and Qua
Slide 26: Proposed Group structure (1/2)
Proposed Group structure (1/2) Central functions Group Finance, Capital allocation between Life and P&C, Group control and risk management, IT, Communication Societas Europaea SCOR Global SCOR Global Operational entities Life P&C Commercial development and partnerships, Marketing and client relation
Slide 27: Proposed Group structure (2/2)
Proposed Group structure (2/2) Business Business Business Technical Unit 1 Unit 2 Unit 3 Actuarial Unit France Germany USA Belgium Switzerland Australia Italy Austria New-Zealand Finance Spain Sweden UK Unit Portugal Scandinavia Asia* Canada Eastern Europe Middle East Ireland Research Latin America
Slide 28: An integration process already in place
An integration process already in place Several integration committees will be established in order to coordinate and pilot the combination of the two entities. These committees will ensure the continuity of operations, prepare the integration and accelerate the combination process. Several committe
Slide 29: Transaction Highlights
Transaction Highlights Life Reinsurance: a Growing and Strategic market for SCOR Revios: a Strong Franchise Building a Top-Tier Global Life Reinsurer: SCOR Global Life Value Creation for SCOR Shareholders Indicative Timetable
Slide 30: A value creating transaction (1/2)
A value creating transaction (1/2) A total purchase price for 100% of the equity capital of Revios: EUR 605 million Reimbursement of EUR 50 million of Revios’ outstanding subordinated debt to Globale Rückversicherung AG Financing structure: Rights issue: around EUR 300m Hybrid debt: up to EUR 350m T
Slide 31: A value creating transaction (2/2)
A value creating transaction (2/2) The combination will be accretive to Earnings Per Share from Year One (i.e. 2007) and will enhance Return On Equity from Year One (i.e. 2007) 2007 2008 Expected EPS accretion* +7.0% +10.0% Expected RoE increase* +80 bps +100 bps * Estimates 4 July 2006 31 “SCOR Glo
Slide 32: Financial strength preserved
Financial strength preserved SCOR Vie and Revios are both rated « A -, stable outlook » by S&P and have a similar risk profile Revios is rated « A-, stable outlook » and SCOR Vie is rated « B++, positive outlook » by AM Best ; SCOR is in continuous dialogue with AM Best on the issue The combination
Slide 33: A transaction leading to synergies
A transaction leading to synergies Synergies estimated so far in EUR million A transaction relying mainly on revenue synergies 15 10 12 12 and on realistic recurrent 5 6 cost synergies (geographical 2006 0 rationalization, IT merger, 2007 2008 2009 -5 retrocession, etc) -15* -10 -15 -20 * Provision
Slide 34: A transaction improving SCOR's cost ratio
A transaction improving SCOR’s cost ratio Cost Base Cost ratio (EUR million) 300 8.3% 9% 8% 250 7.0% 7% 200 6.1% 6% 5% 150 4% 100 3% 2% 50 1% 0 0% SCOR (2005) SCOR + Revios (2005e) SCOR + Revios (2006e) (excluding integration costs) With a larger premium base in 2006, the combination will mechanical
Slide 35: Transaction Highlights
Transaction Highlights Life Reinsurance: a Growing and Strategic market for SCOR Revios: a Strong Franchise Building a Top-Tier Global Life Reinsurer: SCOR Global Life Value Creation for SCOR Shareholders Indicative Timetable
Slide 36: Indicative timetable
Indicative timetable Revios 2005 IFRS consolidated annual results End of August 2006 Revios Embedded Value as at 31/12/2005 4th Quarter 2006 - Antitrust approvals End of October 2006 - Regulatory approvals 36 “SCOR Global Life: European Roots, Global Reach”, July 5, 2006
Slide 37: European Roots, Global Reach: building a top-tier reinsurer
European Roots, Global Reach: building a top-tier reinsurer A financially attractive transaction A near-perfect complementarity An expanded geographic reach A deepening of top-level expertise 37 “SCOR Global Life: European Roots, Global Reach”, July 5, 2006
Slide 38: ANNEX
ANNEX
Slide 39: Key Figures
Key Figures In EUR million SCOR* REVIOS** Gross written premiums 2,407 *** 1,242 Operating income 242 78.9 Net income 131 50.4 Embedded-value 693 **** 592 Liabilities relating to contracts 9,849 4,071 Investments 9,743 4,061 Staff (at 30 June 2006) 891 277 Offices 24 17 * SCOR: 2005 audited accounts