Scor SE · EURONEXT:SCR
Scor — FY2008 Earnings Presentation
46 slides from Scor's earnings presentation, 2009
Slide 1: SCOR Group Full Year 2008 Results
SCOR GROUP Full Year 2008 Results SCOR delivers on promises and further executes on strategy
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: SCOR delivers and executes on strategy
1 SCOR delivers and executes on strategy 2 Solid full year 2008 results 3 SCOR pursues its strategy and confirms its over the cycle targets
Slide 4: SCOR - a solid traditional reinsurance company with a strong Global franchise
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets SCOR - a solid traditional reinsurance company with a strong Global franchise A powerful twin-engine Group Insurance Risk Reinsurance Manager of the Year Personal
Slide 5: 2008 highlights – SCOR delivers on key areas
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets 2008 highlights – SCOR delivers on key areas… Î Demonstrated franchise value proposition through 2008 and 2009 January renewals Strengthening Franchise Î Strength
Slide 6: …and its ability to execute is appreciated by investors
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets …and its ability to execute is appreciated by investors Outperformance in share price… FY 2008 performance: Strengthening SCOR -6.5%-1) Franchise 100 Peer 1 -13.6
Slide 7: SCOR demonstrates its Global franchise supported by a multi-line business approach
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets SCOR demonstrates its Global franchise Strengthening supported by a multi-line business approach Franchise Value 2008 GWP €5.8 billion Î Underwrites traditional r
Slide 8: New Group is fully operational – integration successfully completed
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets -1) “New Group” is fully operational – integration Executing Operational successfully completed Excellence Allactions All choices have have been been done taken C
Slide 9: Cost synergies will be achieved one year ahead of plan
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Cost synergies will be achieved one year ahead Executing Operational of plan Excellence Pre-tax annual synergy targets of € 71 million will be achieved by the end
Slide 10: Consistent strategic path despite the current financial market turmoil
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Consistent strategic path despite the current Pursuing financial market turmoil Strategic Focus Traditional underwriting focus Conservative asset management polic
Slide 11: SCOR delivers and executes on strategy
1 SCOR delivers and executes on strategy 2 Solid full year 2008 results 3 SCOR pursues its strategy and confirms its over the cycle targets
Slide 12: 2008 published results - highlights
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets 2008 published results - highlights Î Achieved return on equity (ROE) of 9.0% despite financial crisis and high natural catastrophe activity Î Gross premiums at €
Slide 13: SCOR generates €315 million of net income in 2008
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets SCOR generates € 315 million of net income in 2008 Variation -4) 2007 -4) 2007 -4) in €m 2008 -1) -2) Variation -3) Variation at constant published pro-forma exch
Slide 14: Shareholder's equity 2008 evolution
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Shareholder’s equity 2008 evolution in €m Financial leverage 18% 19% 206 201 206 201 579 583 579 583 271 44 21 -237 -14 -44 -129 Min Interest -27 Other -17 -144 +
Slide 15: Positive cash flow further increases cash position in Q4 2008
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Positive cash flow further increases cash position in Q4 2008 Positive net operating cash flow in €m 2008 ÎCash and short-term investments Cash and cash equivalen
Slide 16: Non-Life: Net combined ratio improves to 98.6% in 2008
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Non-Life: Net combined ratio improves to 98.6% in 2008 despite increased nat cat events Gross written premiums in €m -4.2% Î Gross written premiums stable at 3 24
Slide 17: Life: Solid operating margin with strong technical performance
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Life: Solid operating margin with strong technical performance Gross written premiums in €m +3.4% Î Gross written premiums increased by 3.4% compared to last year
Slide 18: Asset Management: Cautious investment approach
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets Asset Management: Cautious investment approach Total Investments € 18.8 billion at 31/12/2008 in €m published 2008 2007 Real Estate Equities Average investments o
Slide 19: SCOR delivers and executes on strategy
1 SCOR delivers and executes on strategy 2 Solid full year 2008 results 3 SCOR pursues its strategy and confirms its over the cycle targets
Slide 20: SCOR pursues its strategy…
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets SCOR pursues its strategy… Economic fundamentals deteriorating SCOR strategic positioning Risk of severe economic and No off B/S exposure and balanced Life / fina
Slide 21: …and benefits from the increasingly hardening reinsurance environment
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets … and benefits from the increasingly hardening reinsurance environment Positive reinsurance outlook highlights counter-cyclical nature Î Reinsurance demand has hi
Slide 22: SCOR confirms its over the cycle targets despite challenging environment
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets SCOR confirms its over the cycle targets despite challenging financial market environment Assumptions under realistic Today’s SCOR confirms its Dynamic scenarios
Slide 23: SCOR closely monitors the environment to mitigate risks and seize opportunities
SCOR delivers and executes on strategy | Solid full year 2008 results | SCOR pursues its strategy and confirms its over the cycle targets SCOR closely monitors the environment to mitigate risks and seize opportunities What we have done to date - recap Moving into uncharted waters Î Delivered solid 2
Slide 24: Appendix
APPENDIX Appendix A: Key figures for Q4 2008 QTD and YTD (published & pro-forma) 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 (incl. Bond & Equity portfolio
Slide 25: A: Key figures for Q4 2008
Appendix A: Key figures for Q4 2008 Q4 Q4 QTD Q4 QTD in €m (rounded) 2007 Variation 2007 -1) Variation QTD 2008 published pro-forma Gross written premiums 1 482 1 380 7.4% 1 436 3.3% Net earned premiums 1 390 1 307 6.4% 1 304 6.7% Operating income 14 164 -91.5% 159 -91.2% Net income 34 107 -67.9% 11
Slide 26: A: Consolidated statement of income
Appendix A: Consolidated statement of income Unaudited Q4 Q4 QTD in €m (rounded) QTD 2007 2007 pro- 2008 pro- 2008 forma1) forma1) Gross written premiums 1 482 1 436 5 807 5 853 Change in unearned premiums 48 -12 -48 -121 Gross earned premiums 1 530 1 424 5 759 5 732 Other income from reinsurance op
Slide 27: A: Q4 2008 QTD consolidated statement of income by segment
Appendix A: Q4 2008 QTD consolidated statement of income by segment Q4 QTD 2008 Q4 QTD 2007 in €m (rounded) Proforma-1) Non- Intra- Non- Intra- Life Total Life Total Life Group Life Group Gross written premiums 748 735 0 1 482 665 771 0 1 436 Change in unearned premiums 17 31 0 48 -11 -1 0 -12 Gross
Slide 28: A: 2008 income by segment compared to 2007 pro-forma
Appendix A: 2008 consolidated statement of income by segment compared to 2007 pro-forma 2008 2007 in €m (rounded) pro-forma-1) Non- Intra- Non- Intra- Life Total Life Total Life Group Life Group Gross written premiums 2 701 3 106 0 5 807 2 613 3 240 5 853 Change in unearned premiums -10 -38 0 -48 -1
Slide 29: A: 2008 income by segment compared to 2007 published
Appendix A: 2008 consolidated statement of income by segment – compared to 2007 published 2008 2007 in €m (rounded) published-1) Non- Intra- Non- Intra- Life Total Life Total Life Group Life Group Gross written premiums 2 701 3 106 0 5 807 2 432 2 329 4 762 Change in unearned premiums -10 -38 0 -48
Slide 30: A: Reconciliation of total expenses to cost ratio
Appendix A: Reconciliation of total expenses to cost ratio in €m (rounded) 2008 2007-1) Total Expenses as per Profit & Loss account 353 416 ULAE (Unallocated Loss Adjustment Expenses) 21 33 VOBA (Converium, Remark, re-classed in 2008) -25 Synergies realized in 2007 7 Total expense base 374 431 Non c
Slide 31: B: Consolidated balance sheet – Assets
Appendix B: Consolidated balance sheet – Assets Published Accounts / Unaudited in €m (rounded) 2008 2007-1) Intangible assets 1 464 1 575 Goodwill 787 777 Value of purchased insurance portfolios 607 705 Other intangible assets 70 93 Tangible assets 29 26 Insurance business investments 16 982 16 971
Slide 32: B: Consolidated balance sheet – Liabilities & shareholders' equity
Appendix B: Consolidated balance sheet – Liabilities & shareholders’ equity Published Accounts / Unaudited in €m (rounded) 2008 2007-1) Group shareholders’ equity 3 410 3 614 Minority interests 6 34 Total shareholders’ equity 3 416 3 648 Financial liabilities 936 904 Subordinated debt 583 579 Financ
Slide 33: B: Consolidated statements of cash flows
Appendix B: Consolidated statements of cash flows Published Accounts in €m (rounded) 2008 2007 CASH AND CASH EQUIVALENTS AT JANUARY 1 2 052 1 241 NET CASH FLOWS FROM OPERATING ACTIVITIES 779 611 Cash flows from changes in scope of consolidation -71 -354 Cash flows from acquisitions and sale of finan
Slide 34: 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 (rounded) Full Year FY 2007 in €m (rounded) Full Year FY 2007 2008 adjusted 2008 adjusted Net income (A) 315-1) 407 2008 net income 315-1) 407 Average number of closing
Slide 35: D: Net liabilities by segments
Appendix D: Net liabilities by segments Net liabilities Life & Non-Life in €m (rounded) +4.9% 18 989 18 107 48% Life 45% Non-Life 55% 52% 31/12/2007 31/12/2008 35
Slide 36: E: Unrealized gains & losses evolution
Appendix E: Unrealized gains & losses evolution Unrealized gains & losses in €m (rounded) Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 Equities 29 23 -14 -24 -115 -127 -209 -236 Bonds -46 -115 -51 -40 -40 -181 -250 -226 Real estates & REITS 122 119 122 147 156 141 123 128 Total 10
Slide 37: E: Investment income development
Appendix E: Investment income development Investment income QTD (before tax & investment expenses) Q3 Q4 Q4 in €m (rounded) YTD QTD YTD 250 Groupama guarantee impact -10 0 -10 211 Bonds impairments -30 -13 -43 195 14 186 8 8 Equities impairments -97 -120 -217 168 20 162 97 33 158 22 Real estate amor
Slide 38: E: Total Corporate Bond portfolio
Appendix E: Total Corporate Bond portfolio) By rating By sector in %. total € 2.4 billion in €m (rounded) 1% 3% 11% 2008 In % AAA 37% AA Financial 1 694 71% A Industrial 91 4% BBB <BBB Communications 143 6% 36% NR Utilities 126 5% 12% Consumer, Non-cyclical 92 4% By geography Energy 71 3% in %. tota
Slide 39: E: Financials Corporate Bond portfolio
Appendix E: “Financials” Corporate Bond portfolio By rating By sector in %. total € 1.7 billion in €m (rounded) 4% 2% 2008 In % AAA AA 27% Bank 1 346 79% A Diversified financial services 269 16% 52% BBB <BBB Insurance 58 3% NR Real estate 20 1% 15% Total 1 694 100% By geography in %. total € 1.7 bil
Slide 40: E: Total Equity portfolio
Appendix E: Total Equity portfolio By geography By sector in %. total € 762 million in €m (rounded) 8% 2008 In % 12% EU (Non-UK) Diversified-1) 352 46% North America Financial 89 12% 10% UK Consumer, Non-cyclical 81 11% Others Industrial 42 5% 69% Consumer, Cyclical 39 5% Communications 35 5% Utilit
Slide 41: E: Structured products in fixed income portfolio as of Q4 2008
Appendix E: Structured products in fixed income portfolio as of Q4 2008 Structured product portfolio € 1.0 billion High quality: 90% AAA rating 100% Commercial MBS Alt-A MBS 21% 75% 2% Subprime MBS 4% 50% Consumer ABS-1) Prime non- 10% agency MBS 15% CDO 4% MBS ABS CDO & PPS-2) Principal protected A
Slide 42: 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 (USD 24.4m) Subprime MBS Prime 2nds (Total: USD 9.7m) Subprime (Total: USD 44.3m) Î Original average credit support 4.77% Î Prime 2nd Liens make up 21% Î 15% of subprime exposure of total subprime exp
Slide 43: F: Reconciliation of IFRS asset classification to IR presentation
Appendix F: Reconciliation of IFRS asset classification to IR presentation IFRS classification Cash and Real Alternative Equities Fixed Funds Total short estate investments income withheld IFRS term by cedants Real estate investments 285 285 AFS - Equities 103 262 762 1 127 AFS - Fixed income 6 093
Slide 44: G: Estimated sensitivity to interest rates and equity market
Appendix G: Estimated sensitivity to interest rates and equity market Estimated sensitivity to interest rate & equity market movements on net income and shareholders’ equity 2008-1) 2007 in €m (rounded) Shareholders’ Shareholders’ Net income-4) Net income-4) equity impact equity impact Interest rate
Slide 45: G: Estimated sensitivity to FX movements
Appendix G: Estimated sensitivity to FX movements Estimated sensitivity to FX movements on shareholders’ equity 20082008 2007 FX Shareholders’ Shareholders’ movements equity impact equity impact in €m (rounded) USD/EUR +10% 186 147 in % of shareholders equity 5.4% 4.1% USD/EUR -10% -186 -147 in % of
Slide 46: H: Debt structure
Appendix H: 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%