scor global p&c january 2019 renewal results...2) reinsurance treaties include the annual...

SCOR Global P&C January 2019 renewal results

Victor Peignet

CEO of SCOR Global P&C

1

February 7, 2019

London

2

Disclaimer

General:

Numbers presented throughout this report may not add up precisely to the totals in the tables and text. Percentages and percent changes

are calculated on complete figures (including decimals); therefore the presentation might contain immaterial differences in sums and

percentages due to rounding.

Unless otherwise specified, the sources for the business ranking and market positions are internal.

Forward looking statements:

This presentation includes forward-looking statements and information about the objectives of SCOR, in particular, relating to its current

or future projects. These statements are sometimes identified by the use of the future tense or conditional mode, as well as terms such

as “estimate”, “believe”, “have the objective of”, “intend to”, “expect”, “result in”, “should” and other similar expressions. It should be noted

that the achievement of these objectives and forward-looking statements is dependent on the circumstances and facts that arise in the

future. Forward-looking statements and information about objectives may be affected by known and unknown risks, uncertainties and

other factors that may significantly alter the future results, performance and accomplishments planned or expected by SCOR. Information

regarding risks and uncertainties that may affect SCOR’s business is set forth in the 2017 reference document filed on February 23, 2018

under number D.18-0072 with the French Autorité des marchés financiers (AMF) and posted on SCOR’s website www.scor.com, as may

be updated in the 2018 reference document.

In addition, such forward-looking statements are not “profit forecasts” in the sense of Article 2 of Regulation (EC) 809/2004.

Financial information:

All figures in this presentation are unaudited unless otherwise specified.

Unless otherwise specified, all figures are presented in Euros.

Any figures for a period subsequent to 30 September 2018 should not be taken as a forecast of the expected financials for these periods.

All definitions can be found in the appendix.

All figures are at constant exchange rates as at December 31, 2018 unless otherwise specified.

All figures are based on available information as at January 22, 2019 unless otherwise specified.

http://www.scor.com/

SCOR materially grew P&C gross reinsurance premiums by 9.7%1) at the January renewal with better

prices and stable profitability

− Stronger client relationships in both non-proportional treaties and proportional business. Largest

growth in USA, in line with “Vision in Action”.

− Risk-adjusted price is up 1.3% overall. Price improvements achieved across markets, 1.8% in non-

proportional and 1.2% in proportional treaties.

− Expected profitability is stable, both in terms of return on risk-adjusted capital and technical

profitability (loss ratio + commission ratio). Portfolio management actions2) have improved the

technical profitability by ~0.2% and the return on risk-adjusted capital by ~0.4%.

SCOR’s P&C Specialty insurance businesses are benefitting from improved insurance conditions

− SCOR Business Solutions: volume momentum and clear inflection points in most lines and regions

− MGA: improved expected profitability but premium down slightly (-5%) due to portfolio management

actions

− Channel: continued progress on operationalizing SCOR’s London Market platform with continued

portfolio management actions

The outcome of these renewals is in line with the September 2018 IR Day update at 5%-8% p.a. of the

“Vision in Action” strategic plan growth assumption for SCOR Global P&C

Summary: Sound premium growth with stable expected profitability in a

market characterized by supportive price trends

31) Growth rate excludes MGAs, Alternative Solutions, SCOR Business Solutions and Lloyd’s business2) Portfolio management actions refers to deliberate share variations, deliberate cancellations and/or new business written

About two-thirds of SCOR’s P&C reinsurance premium renews at 1/1

Estimated total 2018 UW Year premiums

1) SUL = SCOR Underwriting Limited, SCOR’s capital provision business at Lloyd’s2) Reinsurance treaties include the annual premium of Alternative Solutions business line. All subsequent slides exclude Alternative

solutions business for 2019 4

▐ In EUR billions

4.6

0.3

0.8

0.4

0.4

Reinsurance

Treaties2)

of which 64%

renews at 1/1

(EUR 2.9bn)

MGAs

Business Solutions

Channel Syndicate

SUL1)

Reinsurance

Specialty

Insurance

86%

46%57%

14%

54%43%

EMEA Americas Asia-Pacific

Rest of the

year renewals

January

renewals

Reinsurance treaty renewal seasonality

6.5

2%

2%

1%

-1%

0%

-1%

-1%

3%

7%

1%

-3%

-1%

0%

3%

3%

-3%

-3%

-2%

0%

0%

2%

Price improvement and premium growth continued in January 2019 renewals

Reinsurance price change1) Reinsurance renewal growth2)

5

2012

2019

2012

2018

January

renewals

April

renewals

June-July

renewals

Portfolio management:

grow when prices are

strong; reduce on lines

or programs where

pricing does not meet

hurdles

Stability:

less pricing

volatility than

the market

5%

5%

23%

9%

5%

3%

14%

9%

2%

2%

6%

5%

4%

10%3)

11%

6%

5%

14%

24%

8%

24%4)

14%5)

2012

2018

0%

1) As published. Year-on-year price changes on a comparable basis2) As published. Year-on-year renewal growth at constant exchange rates,

e.g., 2012 growth computed with December 31, 2011, exchange rates and comparable basis. Hence different from annual premium growth. Includes MGA business, except for 2019.

3) Without specific large deal the growth would have been ~8%4) Without specific large deals the growth would have been ~14%5) Without specific large deals the growth would have been ~4%

21882370

735-117 -17

25

191130 71

836

Premium upfor renewal

Cancelled Sharevariation

Restructured Underlyingvolume x

pricechanges

Newbusiness

with existingclients

New clients RenewedPremium

-4% -1% +1% +7% +2%+4%

Change

in %

6

SCOR grew P&C reinsurance premium by 9.7% primarily through growth

with existing clients, with portfolio actions to improve the overall profitability

3)

1) Global lines include: Agriculture, Aviation, Credit & Surety, Inherent Defects Insurance, Engineering, Marine and Offshore, Space, Cyber and Motor Extended Warranty

2) P&C lines include: Property, Property Cat, Casualty, Motor & other related lines (Pers. Insurance, Nuclear, Terrorism, Special Risks & Inwards retro)3) Cancelled business and Share variations include portfolio management actions. Portfolio management actions are deliberate share variations,

deliberate cancellations and/or new business written

Global Lines1)

P&C Lines

composed of:

EMEA 49%

Americas 34%

Asia-Pacific 17%

composed of

EMEA 48%

Americas 37%

Asia-Pacific 15%

2 923

3 206

+9.7%

▐ Gross premiums in EUR millions

3)

+13.7%

+8.3%P&C Lines2)

without a large deal the

growth would have been 8%

Of which:▪ Positive : 117m▪ Negative: -93m

Of which:▪ Positive : +187m▪ Negative : -204m

Proportional(1.2%; 8.7%)

Non Proportional

(1.8%; 11.7%)

0%

2%

4%

6%

8%

10%

12%

14%

0% 1% 2%

Reinsurance price and premium changes year on year

7

SCOR Global P&C secured price & premium improvements both in

proportional and non proportional

Non Proportional rates improved

− Lines most impacted by losses

displayed largest improvements:

Marine, Casualty and Auto

Proportional renewals were driven by

increases in large whole-account

programs

Cat pricing was broadly flat

− Most of the loss affected programs

renew later in the year

▐ In %

SC

OR

Pre

miu

m C

ha

ng

e

SCOR Price Change on Risk-adjusted Basis

(price; premium)

Note: SCOR Price monitoring only considers contracts renewing without any change in structure.


8

SCOR Global P&C grew with improving Americas trends, while selectively

growing in challenging EMEA markets, maintaining positions in China and

growing in the rest of APAC

Americas: SCOR Global P&C pursuing

strong profitable growth across all lines

despite flat Cat environment:

− Non Prop rates +4.8%

− Improved non Cat Property (+4.8%)

and US casualty (+3.6%)

EMEA: selective growth with existing

clients

− Prices driven by primary rates

(+1.7%)

APAC ~flat driven by China

− Portfolio management actions in

China

▐ In %

SC

OR

Pre

miu

m C

ha

ng

e

EMEA(1.2%; 6.7%)

Americas(3.4%; 20.5%)

China(-1.3%; -0.3%)

APAC excl. China(-0.2%; 7.8%)

APAC(-1.0%; 2.3%)

-1%

5%

10%

15%

20%

-2% -1% 0% 1% 2% 3% 4%

(price; premium)



Agriculture(0.0%; 22.7%)

Property Prop(2.0%; 4.3%)

Property Cat(-0.3%; 15.0%)

Credit & Surety(-1.3%; 16.0%)

Motor(-0.1%; 2.4%)

Marine & Offshore(1.7%; 3.5%)

Engineering(1.5%; 6.0%)

IDI(1.5%; 6.5%)

Casualty(3.0%; 8.8%)

Aviation(2.8%; 9.1%)

0%

10%

20%

-2% 0% 2% 4%


9

SCOR Global P&C grew broadly while improving pricing and conducting

portfolio management actions

▐ In %

SC

OR

Pre

miu

m C

ha

ng

e


(price; premium)


Bubble size proportional to premium renewed

in progress

10

SCOR’s Specialty Insurance performed well thanks to strong SBS growth

and MGAs portfolio management

SBS

MGAs

(USA)

Channel

Main lines1)Renewed

Premium

(EUR millions)YOY Δ

Property Non Energy 139 +17%

Property Energy 81 +14%

Casualty 61 +14%

Offshore 20 +12%

Winning new business and growing in all lines

Positive price movements in most lines and regions

Premium growth1): +18%

Slight reduction of premium (-5%) with improved

expected profitability at January 2019 renewals

Portfolio management: Growing with select partners

and shedding low-performing business

Expected technical profitability improved by 6

percentage points

Estimated premium growth over Q43): +5% (excluding lines in run-off – Marine, Accident & Health, and Financial

Institutions)

Underwriting and operational alignment underway with formation of the London Platform. Service company

approval received which will help geographical expansion notably in EIL4) and PCR4)

Portfolio management actions in other lines of business

▐ In %

-15%

-10%

-5%

0%

5%

10%

FY

'09

FY

'10

FY

'11

FY

'12

FY

'13

FY

'14

FY

'15

FY

'16

FY

'17

FY

'18

SBS price trends improving2)

Property

Non Energy

Property

Energy

Offshore

Casualty

1) Sample of analyzed contracts with an inception date from October 1, 2018 to January 1, 2019, underwriting year basis

2) Weighted average annual pricing change of the SBS renewed portfolio, FY18 includes January 1, 2019, renewals

3) Sample of analyzed contracts with an inception date from October 1, 2018 to January 10, 2019.

4) EIL stands for Environmental Impairment Liability; PCR stands for Political and Credit Risks.

All figures based on available information as at January 25, 2019. SBS stands for SCOR Business Solutions; Channel stands for The Channel Syndicate.

91

95

95

136

163

195

219

245

260

267

295

366

778

91

84

94

131

137

181

222

223

242

261

265

367

626

Eastern Europe

Latam and Caribbean

Canada

Northern Europe

Italy

APAC excl. China

Other Western Europe

UK & Ireland

MEA

Germany

France

China

USA +24%

0%

+11%

+2%

+8%

+10%

-1%

+8%

+20%

+4%

+1%

+13%

0%

1) Other Western Europe: Austria, Cyprus, Greece, Malta, Portugal, Spain, Switzerland2) Northern Europe: Belgium, Luxembourg, The Netherlands, Sweden, Denmark, Norway, Finland, Iceland3) Eastern Europe: Albania, Bosnia, Bulgaria, C.I.S., Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro,

Poland, Romania, Serbia, Slovakia, Slovenia

11

SCOR Global P&C’s reinsurance gross premium – By geography


Up for renewal

Renewed business

11

By Geography

1)

2)

3)

Key Client Management

approach allowed us to seize

opportunities to grow profitably

with existing US clients on new

and existing programs

82

99

95

113

103

312

77

94

91

92

94

268

IDI

Engineering

Marine &Offshore

Agriculture

Aviation(includ. Spaceand GAUM)

Credit & Surety

54

110

138

158

292

298

118

477

847

51

111

139

120

259

286

96

414

812

Others

Casualty NP

Motor NP

Property NPW

Casualty P

Motor P

o/w US CAT

Property Cat

Property P

+24%

By line of business

1) Position of the Agriculture renewals as at January 22, 20192) Includes Personal Accident, Special Risks, Workers’ Compensation, Nuclear Pools, Terrorism Standalone, Motor Extended Warranty and Inwards retrocession 12

SCOR Global P&C’s reinsurance gross premium – By line of business


+16%

+9%

1)

Up for renewal

Renewed business

in progress

2)

+4%

+15%

+4%

+13%

-1%

0%

+6%

+3%

+6%

+7%

+32%

Cancelled/restructured: client or SCOR decided to cancel the business/programs and/or to change their programs (e.g.

from proportional to Non-Proportional)

EMEA: Europe, Middle East & Africa

IDI: Inherent Defects Insurance (Decennial)

LoB: Line of Business

MGA business: business done with Managing General Agents / Managing General Underwriters (MGA/MGU)

New business with existing clients: existing client decided to place new business/programs with SCOR (i.e. new to SCOR

or new as such) and/or to change their programmes (e.g. from Proportional to Non-Proportional)

Price change: “price change” defined as movement in price per unit of exposure. Therefore for most products, where the

exposure unit is a monetary amount, the price movement is net of general inflation. By definition, changes in commissions are

not considered as price changes. All percentages based on weighted averages per segment and overall on premium volume.

Share variation: client or SCOR decided to reduce or increase the share participation (e.g. SCOR increases share with client

X from 10% to 20%)

Underlying volume x price changes: combined effect of variations in underlying primary volume, in exposures and/or in

rates (= ceded EGPI change for existing clients)

Underwriting Ratio: on an underwriting year basis, the sum of the gross loss ratio and the acquisition cost ratio (cedant's

commission and brokerage ratios). Administration costs must be added to get the Combined Ratio

2017 Underwriting year premiums: SCOR Global P&C premiums for contracts incepting between January 2017 and

December 2017, expressed at December 31, 2017 closing exchange rates

13

Definitions

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