2013-03-06 07:21:10 -
Press Release
06 March 2013
For more information, please contact:
Jean-Charles Simon / Géraldine Fontaine +33 (0) 1 58 44 75 58
Communications and Public Affairs
Antonio Moretti
+33 (0)
1 58 44 77 15
Investor Relations Director
SCOR records net income of EUR 418 million in 2012
and proposes[1] a dividend of EUR 1.20 per share
In 2012, SCOR records a solid performance that continues to combine growth,
profitability and solvency:
* Gross written premiums reach EUR 9,514 million, up by 25.2% on a published
basis and by 10.8% pro-forma[2], bearing witness to the Group's enhanced
franchise.
* SCOR Global P&C gross written premiums increase by 16.8% to EUR 4,650
million, fuelled by very good July 2011 and January, April and July
2012 renewals;
* SCOR Global Life gross written premiums reach EUR 4,864 million, up by
34.4% on a published basis and by 5.6% pro-forma, supported by the
successful integration of ex-Transamerica Re business.
* SCOR Global P&C's net combined ratio stands at 94.1%.
* SCOR Global Life's technical margin stands at 7.7%.
* Operating cash flow stands at EUR 761 million thanks to significant
contributions from the Group's two business engines and despite net payments
in 2012 of around EUR 300 million for 2011 natural catastrophe losses.
* SCOR Global Investments records an on-going return on invested assets of
3.5% (before equity impairments), thanks to its active portfolio management,
and continues to follow a prudent strategy in a historically low yield
environment.
* With a 5.3% cost ratio in 2012, SCOR trends towards the rate set out in the
Strong Momentum V1.1 plan, actively investing for the future with 24 on-
going projects.
* SCOR delivers a net income of EUR 418 million, up by 26.7% on a published
basis and by 13.6% pro-forma. ROE stands at 1,002 basis points above the
risk-free rate excluding equity impairments (900 basis points including
impairments), demonstrating the Group's capacity to deliver good results in
spite of the low-yield and challenging economic environment.
* SCOR's debt leverage stands at 19.9% at 31 December 2012, at the low end of
the Strong Momentum V1.1 plan assumptions. In 2012, the Group successfully
placed on the Swiss franc market CHF 315 million of perpetual subordinated
notes under best in class conditions and continued to actively manage its
liabilities, buying back an existing debt for EUR 50 million at 80% of par
value.
* Shareholders' equity stands at EUR 4,810 million at 31 December 2012,
compared to EUR 4,410 million at 31 December 2011, after the distribution of
EUR 203 million in dividends for 2011. Book value per share stands at EUR
26.18 at 31 December 2012, compared to EUR 23.83 at 31 December 2011.
* Proposed dividend of EUR 1.20 per share for 2012[3], representing a payout
ratio of 53%.
Denis Kessler, Chairman & CEO of SCOR, comments: "SCOR achieved solid
performances in 2012, despite an economic and financial environment that remains
challenging and natural catastrophe costs that are still elevated. The Group
continues to grow, particularly with further very strong increases during the
P&C renewals and the successful integration of the Transamerica Re business, and
now conducts around 60% of its activities in Asia-Pacific and the Americas. The
quality of SCOR's results in terms of profitability, solvency and growth were
further recognised in 2012 by the upgrade of the Group's rating by the four
rating agencies following SCOR. The Group's three-year strategic plan, Strong
Momentum V1.1, is due to be completed in the summer of 2013, and SCOR will
present its new 3-year strategic plan in September. The whole Group is fully
engaged in this project, with a renewed ambition to achieve the best
performances for our shareholders and to anticipate and manage the risks of our
clients".
--------------------------------------------------------------------------------
[1]Proposal subject to approval by the Annual General Meeting of shareholders on
25 April 2013.
[2] Pro-forma: as if the acquisition of the Transamerica Re mortality portfolio
had taken place on 1 January 2011. For more information, please refer to the
2011 annual results presentation, available at www.scor.com and on pages 5 and
6 of this press release.
[3]Proposal subject to approval by the Annual General Meeting of shareholders on
25 April 2013.
*
* *
In 2012, SCOR Global P&C (SGPC) continues to deliver high growth, with technical
profitability better than the assumptions of the Strong Momentum V1.1 plan
SGPC gross written premiums are up by 16.8% in 2012 (+10.8% at constant exchange
rates) to EUR 4,650 million, in line with the growth assumptions set out in the
Group's strategic plan Strong Momentum V1.1. This expansion comes mainly from
P&C reinsurance business in the US, Asia and Europe, more specifically in the
UK, Benelux and the Commonwealth of Independent States (CIS), and from robust
development in Specialties and Joint Ventures, with Lloyd's and the Channel
2015 syndicate as well as in the Aviation line.
The very good renewals achieved over the past few months (+22% in July
2011, +14%, +11% and +24% in January, April and July 2012 respectively) were
continued at the 1 January 2013 renewals, thereby confirming the dynamism of
SGPC and the quality of its underwriting policy.
SGPC records an excellent combined ratio of 94.1% thanks to:
- a further improved net attritional loss ratio, in line with the 60%
strategic plan assumption, excluding 2.2 points from the reserve releases in the
fourth quarter 2012;
- Nat Cat net loss ratio of 7.6 points in 2012. In the fourth quarter
2012 alone, the Nat Cat net loss ratio stands at 15.7%, including EUR 137
million of losses from Super Storm Sandy which hit the Northeast of the United
States, partly offset by reserve releases of EUR 90 million, primarily from the
Aviation and Inherent Defect Insurance (IDI) business lines.
The effectiveness of SCOR's controlled risk appetite has been proved once again
by its exposure to Sandy, the Group being among the least affected in the
industry. Moreover, in 2013, SCOR further optimized its capital shield program,
which protects the Group from being significantly affected should Sandy industry
losses deteriorate.
SCOR's agreement with the Medical Defense Union (MDU) will be terminated by
March 31, 2013. This contract had been acquired through the Converium business
combination. As a result, it has been decided to adjust the intangible value
associated with this contract to its residual value of EUR 6 million.
For the full year 2012, the normalized[1] net combined ratio stands at 94.7%
(compared to 95.4% in 2011), i.e. slightly lower than the net combined ratio
assumption set out in the Strong Momentum V1.1 plan (95-96%).
SCOR Global Life (SGL) records a strong and stable technical margin, in line
with Strong Momentum assumptions
SGL gross written premiums reach EUR 4,864 million in 2012, compared to EUR
4,604 million in 2011 pro-forma, representing an increase of 5.6% (stable at
constant exchange rates), thanks to the successful integration of ex-
Transamerica Re operations. Decreases in the Middle East have been offset by
significant increases in SGL business in Asia/Australia, Central and Eastern
Europe, Canada and the UK/Ireland.
This growth has been supported by significant new business production
(approximately EUR 840 million, i.e. +20% compared to 2011) from France, the US
and Asia-Pacific, partially offsetting the reduction of in-force business,
mainly in the German and Middle East markets. SGL also records double-digit
growth in the Critical Illness, Disability, Longevity and Personal Accident
lines.
SGL generates a technical margin of 7.7% (including 0.3 pts of one-off items),
in line with the assumptions of the Strong Momentum V1.1 plan and the pro-forma
technical margin for 2011 of 7.9%, which contained 0.5 percentage points of non-
recurring items, demonstrating the resilience of the technical results of its
biometric risk portfolio.
2012 also marks the final integration of ex-Transamerica Re business and
employees within SGL's structure and operations.
SCOR Global Investments (SGI) delivers an on-going return on invested assets of
3.5% (excluding equity impairments) in 2012, in a historically low yield
environment
In an environment still marked by historically low interest rates in the major
currency zones, SGI maintained a prudent investment strategy throughout 2012.
The so-called "rollover" strategy, which consists of maintaining a relatively
short duration of the fixed income portfolio and generating recurring financial
cash flows, whilst actively managing the invested assets portfolio, continues.
At 31 December 2012, expected cash flows on the fixed income portfolio over the
next 24 months stand at EUR 6.0 billion (including cash and short-term
investments), the duration of the fixed income portfolio having been kept
relatively short and stable at 2.7 years (excluding cash). Having identified the
risk of sovereign debt as early as 2008, SGI still has no exposure to the
sovereign debt of Greece, Ireland, Italy, Portugal or Spain. The fixed income
portfolio (including short-term investments) is of a high quality, with a stable
average rating of AA-.
Since the beginning of 2013, in an economic and financial context that remains
uncertain, but in which systemic risk appears to be receding, SGI has begun a
cautious inflection programme, which consists of selectively reinvesting part of
its cash.
For the full year 2012, the invested assets portfolio generates a financial
contribution of EUR 394 million. The active management policy practised by SGI
has enabled the Group to record capital gains of EUR 161 million in 2012. The
Group has rigorously applied an unchanged amortization and impairment policy to
its investment portfolio, for a total amount of EUR 86 million in 2012, of which
EUR 69 million on equities which are net asset value neutral.
Excluding equity impairments, the on-going return on invested assets reaches
3.5% for the full year 2012 (3.0% including equity impairments). Taking account
of funds withheld by cedants, the net rate of return on investments is 2.7% over
the period.
Invested assets (excluding funds withheld by cedants) stand at EUR 13,982
million at 31 December 2012, composed as follows: 10% cash, 79% fixed income (of
which 9% are short-term investments), 5% equities, 4% real estate and 2% other
investments. Total investments, including EUR 8,266 million of funds withheld,
stand at EUR 22,248 million at 31 December 2012, compared to EUR 21,053 million
at 31 December 2011.
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[1]The normalized net combined ratio is calculated by removing 1.6 pts (the
difference between 6.0 pts of cat budget and the actual level of 7.6 pts) and
adding 2.2 pts of reserve releases (EUR 90 million in Q4 2012) to the actual net
combined ratio of 94.1%.
*
* *
In the 2012 annual results presentation and in this press release, two sets of
2011 financial data are used, published accounts & pro-forma information:
Audited published accounts Full Year and 4(th) quarter accounts:
The audited published accounts of Q4 2011 include Transamerica Re figures since
it was acquired on 9 August 2011.
Unaudited pro-forma information: Full Year information & quarterly information
* Following IFRS 3 guidance - an acquirer shall disclose information that
enables users of its financial statements to evaluate the nature and
financial impact of business combinations that were effected during the
period.
* The unaudited pro-forma financial information as of 31 December 2011 is
presented to illustrate the effect on the Group's income statement of the
Transamerica Re acquisition as if the acquisition had taken place on 1
January 2011. These illustrative figures are based upon estimates and may
not comply with generally accepted accounting principles.
* As a reminder, the disclosure of pro-forma gross written premiums and pro-
forma net income for the period ended 31 December 2011 will be included in
the 2012 "Document de Référence".
P&L Key figures (in EUR millions)
2012 2011 Variation 2011 Variation
(audited) Published (%) Pro-forma (%)
(audited) (unaudited)
-------------------------------------------------------------------------------
Gross written premiums 9,514 7,602 25.2% 8,586 10.8%
-------------------------------------------------------- ----------------------
P&C gross written 4,650 3,982 16.8% 3,982 16.8%
premiums
-------------------------------------------------------- ----------------------
Life gross written 4,864 3,620 34.4% 4,604 5.6%
premiums
-------------------------------------------------------- ----------------------
Net investment income 566 624 -9.3% 653 -13.3%
-------------------------------------------------------- ----------------------
Operating results 632 417 51.6% 476 32.8%
-------------------------------------------------------- ----------------------
Net income 418 330 26.7% 368 13.6%
-------------------------------------------------------- ----------------------
Earnings Per Share (EUR) 2.28 1.80 26.7% 2.01 13.4%
-------------------------------------------------------- ----------------------
P&L Key ratios
2012 2011 2011
(audited) Published Pro-forma
(audited) (unaudited)
-------------------------------------------------------------------------
Net return on investments 2.7% 3.2% 3.2%
-------------------------------------------------------- --------------
Return on invested assets(1) 3.0% 3.7% 3.8%
-------------------------------------------------------- --------------
P&C net combined ratio(2) 94.1% 104.5% 104.5%
-------------------------------------------------------- --------------
Life operating margin(3) 5.1% 6.5% 6.4%
-------------------------------------------------------- --------------
Life technical margin(4) 7.7% 8.1% 7.9%
-------------------------------------------------------- --------------
Group cost ratio(5) 5.3% 5.5% 5.3%
-------------------------------------------------------- --------------
Return on equity (ROE) 9.1% 7.7% 8.5%
-------------------------------------------------------- --------------
1: Excluding funds withheld by cedants; 2: Combined ratio is the sum of the
total claims, the total commissions and the total P&C management expenses,
divided by the net earned premiums of SGPC; 3: The Life operating margin is the
sum of the technical results, the total investment income from SGL and the total
SGL expenses, divided by the net earned premium of SGL; 4: The technical margin
for SGL is the technical result divided by the net earned premiums of SGL; 5:
Cost ratio is the total management expenses, after deduction of investment
management costs, amortisation and certain non-controllable expenses, divided by
the gross written premiums
Balance sheet Key figures (in EUR millions)
2012 2011 (audited) Variation
(audited) (%)
----------------------------------------------------------------------
Total investments(1) 22,580 21,429 5.4%
----------------------------------------------------------------------
Technical reserves (gross) 23,692 23,162 2.3%
----------------------------------------------------------------------
Shareholders' equity 4,810 4,410 9.1%
----------------------------------------------------------------------
Book value per share (EUR) 26.18 23.83 9.9%
----------------------------------------------------------------------
1: Total investment portfolio includes both invested assets and funds withheld
by cedants, accrued interest, cat bonds and FX derivatives
*
* *
Forward-looking statements
SCOR does not communicate "profit forecasts" in the sense of Article 2 of (EC)
Regulation n°809/2004 of the European Commission. Thus, any forward-looking
statements contained in this communication should not be held as corresponding
to such profit forecasts. Information in this communication may include
"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 which does not directly relate to
a historical fact or current fact. Forward-looking statements are typically
identified by words or phrases such as, without limitation, "anticipate",
"assume", "believe", "continue", "estimate",
"expect", "foresee", "intend", "may
increase" and "may fluctuate" and similar expressions or by future or
conditional verbs such as, without limitations, "will", "should",
"would" and
"could." Undue reliance should not be placed on such statements, because, by
their nature, they are subject to known and unknown risks, uncertainties and
other factors, which may cause actual results, on the one hand, to differ from
any results expressed or implied by the present communication, on the other
hand.
Please refer to SCOR's Document de référence filed with the AMF on 8 March 2012
under number D.12-0140 (the "Document de référence"), for a description of
certain important factors, risks and uncertainties that may affect the business
of the SCOR Group. As a result of the extreme and unprecedented volatility and
disruption of the current global financial crisis, SCOR is exposed to
significant financial, capital market and other risks, including movements in
interest rates, credit spreads, equity prices, and currency movements, changes
in rating agency policies or practices, and the lowering or loss of financial
strength or other ratings.
SCOR Press Release:
hugin.info/143549/R/1681697/550850.pdf
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Source: Scor via Thomson Reuters ONE
[HUG#1681697]
