Slides
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Investor Day 12 December 2024 Forward 2026 update Driving value creation Shaping the reinsurer of tomorrow
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2 This presentation does not constitute an offer to purchase or exchange, nor a solicitation of an offer to sell or exchange SCOR’s shares or other securities. This presentation should not be transmitted, forwarded or shared by any means in any jurisdiction in which it is unlawful or prohibited to do so. This presentation includes forward-looking statements, assumptions and information about SCOR’s financial condition, results, business, strategy, plans and objectives, including in relation to SCOR’s current or future projects. These statements are sometimes identified by the use of the future tense or conditional mode, or terms such as “estimate”, “believe”, “anticipate”, “expect”, “have the objective”, “intend to”, “plan”, “result in”, “should”, and other similar expressions. It should be noted that the achievement of these objectives, forward-looking statements assumptions and information is dependent on circumstances and facts that may or may not arise in the future. No guarantee can be given regarding their forward-looking statements, assumptions and information provided in this presentation. These forward-looking statements, assumptions and information are not guarantees of future performance. Forward-looking statements, assumptions and information (including on objectives) may be impacted by known or unknown risks, identified or unidentified uncertainties and other factors that may significantly alter the future results, performance and accomplishments planned or expected by SCOR. In particular, it should be noted that the full impact of the economical and geopolitical risks including, but not limited to, the ongoing conflicts in Ukraine and in middle eastern countries on SCOR’s business and results cannot be accurately assessed. Therefore, any assessments, any assumptions and, more generally, any figures presented in this presentation will necessarily be estimates based on evolving analyses, and encompass a wide range of theoretical hypotheses, which are highly evolutive. At this stage, none of these scenarios, assessments, impact analyses or figures can be considered as certain or definitive. Information regarding risks and uncertainties that may affect SCOR’s business is set forth in the 2023 Universal Registration Document filed on March 20, 2024, under number D.24-0142 with the French Autorité des marchés financiers (AMF) posted on SCOR’s website www.scor.com. In addition, such forward-looking statements, assumptions and information are not “profit forecasts” within the meaning of Article 1 of Commission Delegated Regulation (EU) 2019/980. The forward-looking statements, assumptions, and information provided in this presentation are only valid at the date hereof and SCOR has no intention and does not undertake to complete, update, revise or change these forward-looking statements, assumptions and information, whether as a result of new information, future events or otherwise. This presentation may include information on specific transactions that shall be considered as projects only. In particular, any decision relating to the information or projects mentioned in this presentation and their terms and conditions will only be made after the ongoing in-depth analysis considering tax, legal, operational, finance, human resources and all other relevant aspects have been completed and will be subject to general market conditions and other customary conditions. The Group’s financial information contained in this document is prepared on the basis of IFRS and interpretations issued and approved by the European Union. Any financial results subsequent to June 30, 2024 included in this presentation have not been audited by, or have not been the subject of a limited review by, SCOR’s statutory auditors. Any figures for a period subsequent to September 30, 2024 should not be taken as a forecast of the expected financials for these periods. Disclaimers 2
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Thierry Léger CEO 14:00 Agenda Chapter Speaker Start time Jean-Paul Conoscente CEO SCOR P&C Property and Casualty outlook 14:30 15:35 Thierry Léger CEO Life and Health strategy update 14:10 CFO update François de Varenne CFO and Deputy CEO Introduction Conclusion Thierry Léger CEO 16:05 Finance Q&A 16:10 Business Q&A 14:45 Coffee break 15:25 10’ Length 15’ 30’ 20’ 5’ 40’ 40’ 10’ 3
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Introduction Thierry Léger, CEO Investor Day 12 December 2024
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SCOR’s strategic positioning Build on Tier 1 franchise and expertise Clear strategy to create value and be “future-ready” A nimble and innovative solutions provider Strong governance, management and operations 5
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We set reserves at best estimate with some buffers P&C reserves and L&H assumptions 100% checked and validated by independent third parties Moved forward to a more dynamic ALM framework with first positive impacts on the Group solvency Significant progress has been made over the last 12 months We aligned our structure to Forward 2026 Simplified organization and new culture for faster decision-making at the front Accelerated operational efficiency with the savings target to be delivered ahead of Forward 2026 We allocated capital dynamically towards profitable and diversifying opportunities Significant growth of most profitable and diversifying P&C lines in 2024 Elevated level of return on invested assets benefiting from a short portfolio duration We accelerated the L&H business transformation Steered L&H new business growth towards capital-efficient, higher-margin products Centralized the steering of L&H in-force management to preserve and deliver value 6
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2024 reserve reviews concluded, and externally validated 7 Completion of 2024 internal reserve review Completed, with all lines at best estimate and increased resilience Completion of 2024 internal assumption review Broad portfolio review completed at Q3 Completion of WTW external review Supporting SCOR’s internal reserve review conclusion1 Completion of Milliman external review Covered 100% of the gross PVFCF and supporting SCOR’s internal assumption review conclusion2 P&C L&H 1. Further details of the WTW review are set out on slide 61; 2. Further details of the Milliman review are set out on slide 62
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Grow Economic Value by 9% p.a.1 over 2025-2026 Enhance the platform to be future-ready Move to dynamic, adaptable, data-driven management of risks and capital Enhance ALM framework to dynamically protect shareholder economic value Expand and develop risk partnerships Harvest business opportunities from supportive market conditions Leverage and monetize global Tier 1 franchise at full potential Fuel growth from diversified portfolios and generate capital sustainably 1. Growth at constant economics (the starting point of each year is being adjusted for the payment of the proposed dividend for the preceding year) Forward 2026: Drive value creation while shaping the reinsurer of tomorrow 8
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Growing Economic Value through three complementary engines Increase new business margins to deliver a long-term profitable L&H portfolio Strengthen in-force management to protect and deliver value L&H Leverage Tier 1 franchise and hard market to continue expansion into preferred lines Balance exposures while growing and diversifying the whole portfolio P&C Maintain prudent and sustainable strategy Increase regular income yield Expand third-party asset management InvestmentsUpdated 9
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Enhancing the platform to be future-ready Capital Allocation Risk Partnerships ALM Enhance the use of data through a dedicated platform and holistic governance Improve core business capabilities and promote the development of new models, products and services Adopt a more granular framework, with a refined view on liabilities cash flow projections Improve stability of cash flows and secure balance sheet against market volatility Build on retrocession relationships to create risk partnerships with both existing and new partners Monetize the Group’s franchise and expertise, and increase fee income by 60% related to risk partnerships1 Steer capital allocation at a more granular level to drive disciplined cycle management Allocate capital to grow a balanced and diversified portfolio with a lower capital intensity that maximizes value creation 1. Compared to 2023, based on a revised scope for risk partnerships, 2026 ambition remains unchanged i.e. ~EUR 50m increase compared to a rebased 2023 gross fee income of EUR 82m; The fee income from risk partnerships is included in the insurance service result 50% 33% 33% 33% Tech and Data 10
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Maintaining Forward 2026 targets Targets 2025-2026 updated assumptions Technical profitability L&H insurance service result ~ EUR 0.4bn p.a. P&C net combined ratio < 87% Management expenses3 ~ EUR 1.2bn in 2026 Investment regular income yield 3.4% to 3.8% in 2026 Return on equity Return on equity4 > 12% p.a. Value creation P&C new business CSM 1% to 3% CAGR2 L&H new business CSM ~ EUR 0.4bn p.a. Growth P&C insurance revenue 4% to 6% CAGR2 1. Growth at constant economics (the starting point of each year is being adjusted for the payment of the proposed dividend for the preceding year); 2. Compound Annual Growth Rate over 2023-2026; 3. “Other income and expenses”, “Other operating income and expenses” as well as financing expenses are excluded from the management expenses; 4. Assuming a 30% corporate income tax rate for 2025-2026 Economic Value growth1 of 9% p.a. over 2025-2026 Financial target Solvency ratio in the optimal 185% to 220% range Solvency target Updated Updated Group CSM growth 1% to 3% p.a.New 11
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Investor Day 12 December 2024 Life and Health strategy update Thierry Léger, CEO
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Making significant progress on the 3-step plan • Increased profit hurdle and optimized mix • Higher margin on new business New Business ✓ Redefined position across markets and introduced new pricing thresholds ✓ Accelerated plans to grow in higher- margin Longevity and Financial Solutions • Higher centralization of business steering • Protect and deliver value In-Force ✓ Implemented new operating model with strengthened in-force management ✓ Taken actions and delivered significant savings • Set the right base • Establish additional prudenceReserves ✓ Completed internal assumption review, supported by external review ✓ Added additional prudence to reserves Actions taken since Q2 2024 100% 100% 50% 13
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New Business Shifting towards capital-efficient and diversifying Longevity and FinSol 92% 6%2% 20231 ~75% ~15% ~10% Forward 2026 ~60% ~20% ~20% Updated Forward 2026 Protection Longevity FinSol Accelerate and focus on global diversification Centralized market pricing teams to increase oversight, with clear focus on delivering higher returns Implemented higher return thresholds for new business, increasing new business profitability and ensuring long-term sustainable portfolio Reduced exposure to living benefits and long-term guarantees Run-off South Africa and service Central European markets from Paris Strengthen team and expand offering of financial solutions Relative margin indicator, illustrativeNew business CSM 1. Excluding a large transaction in Asia (EUR 50m) 14
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New Business: Protection Repositioning across markets and increasing profit hurdle Maintain positions and improve efficiency Manage for value Maximize capital efficiency Turn around / run-off Maintain positions and continue to grow Continue to reduce costs Exit lowest-margin business and improve technical margins Continue to reduce costs Reduce exposure to living benefits and long-term guarantees Reduce capital intensity where opportunities arise (e.g., retrocession) Fundamentally review underwriting approach to protect in-force assets Run-off subscale markets and manage run-off portfolios centrally Protection new business CSM Forward 2026 Updated Forward 2026 ~ -30% > +2pts IFRS RoE 2026E vs 2023 ~75% ~60% Share of NB CSM in 2026E 15 Mortality Morbidity
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Accelerating and focusing on global diversification New Business: Longevity RoW Significant growth potential in other active bulk annuity markets (Netherlands, Canada) and in Retail products (e.g., Australia, Europe) $50tn Retirement Assets US $50bn p.a.1 Pension Risk Transfer Emerging opportunities to provide longevity cover thanks to strong bulk annuity market £40bn p.a.2 Bulk Annuities Quote selectively in a competitive market, with a clear focus on margin, and expand market access via partnerships Forward 2026 Updated Forward 2026 ~ +30% Longevity new business CSM US and RoW UK ~15% ~20% Share of NB CSM in 2026E 1. Source: Pension risk transfer monitor as at September 2024 from Legal & General; 2. Pension at a Glance 2023 from OECD16 UK
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New Business: Financial Solutions Growing market share and expanding offering 17 Risk remote deals Full risk transfer deals Actively seek opportunities where market demand remains, and maintain discipline in a competitive market Scale-up the team and refocus existing resources Leverage the SCOR franchise, broaden product offering and streamline the execution of large structured transactions Increased focus on structured transactions driving improved cashflow generation Forward 2026 Updated Forward 2026 ~ +90% ~10% ~20% Share of NB CSM in 2026E FinSol new business CSM
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Delivering higher margins with significantly improved business mix in 2026 New Business 92% 6% 2% 20231 ~75% ~15% ~10% Forward 2026 ~60% ~20% ~20% Updated Forward 2026 Protection Longevity FinSol ≈ flat New business CSM New business IFRS RoE Significantly changed L&H new business profile by 2026 Lower Protection new business CSM compensated by growth in Longevity and FinSol by 2026 > 2pts improvement in new business RoE driven by higher margins and improved business mix > +2pts 2026E vs 2023 1. Excluding a large transaction in Asia (EUR 50m)18
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In-force Strengthening governance on in-force management globally 1919 Progress 3 1 2 4 Objective Align financial compensation of leadership team to enhanced KPIs Centralize the steering of L&H in-force business to protect value Develop enhanced KPIs to monitor business Leverage advanced analytics to strengthen measurement and monitoring framework In-force KPI targets embedded in leadership team incentives as primary objectives Central ownership of run-off portfolios (e.g., Israel) in-place, team operational in Q4 2024 Quarterly business review being rolled out covering IFRS and economic KPIs Roll-out in-progress in the US, scale-up planned for 2025 Increase reporting on in-force management Quarterly reporting to Board and Comex, and yearly update to financial markets5
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Strengthening the end-to-end process, harnessing data analytics to protect and deliver value In-force 20 2 3 45 6 1 Business acceptance – Centralized pricing oversight and strict thresholds on minimum profitability Business underwriting – Target a more diversified, higher-margin portfolio, with reduced living benefits Technical accounting – Improved data quality and availability with roll-out of new systems Reporting – Enhanced reporting in strengthened quarterly business review Experience analysis – Deal-level analytics informing business decisions Reserving – Refined granularity to better align with business decisions
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In-force Continuing strong actions in the US 21 Achievement in last 8 years 78 actions launched 407 treaties 55% rate increase 45% recaptures 10% actions in arbitration 6 months on average to client decision US management actions 2017-2024 75% of the US in-force book1 is Yearly Renewable Term (YRT) treaties… …of which the vast majority includes premium rate review clause 1. Based on premiums over the last 5 years
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Financials Improving L&H competitiveness through higher cost efficiency 1. Part of Group transformation program launched in 2022; Group savings target of EUR 150m communicated in September 2023; 2. Savings initiatives delivered in 2024 with most of the P&L impact to be visible in the following years 22 Transformational initiatives launched since 2022 keeping the L&H management expenses flat between 2023 and 2026E A more efficient and focused L&H organization following the strategic review will bring additional EUR 30m management expense savings (majority already realized in 20242) Lower L&H total cost base in 2026E 2023 cost base Transformation program1 Payroll, inflation, FX and initiatives for growth Forward 2026 cost base Additional savings from L&H strategic review Updated Forward 2026 cost base L&H total cost base 2023-2026E ~EUR -30m Savings from transformation initiatives to offset cost increase
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Financials Growing CSM progressively from high-quality new business 23 Opening CSM CSM amortization New business CSM Interest accretion and other Closing CSM +/- Simplified and illustrative ~ EUR 4.7bn ~ EUR -0.3bn CSM amortization p.a. 2025E-2026E ~ EUR 0.4bn New business CSM p.a. 2025E-2026E 1% to 3% p.a. 2025E-2026E L&H CSM roll-forward 2025E-2026E
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Financials Rebasing the level of normalized L&H profits 24 L&H insurance service result (ISR) 2025E-2026E CSM Release RA release Experience variances & onerous contracts1 Revenue on financial contracts Revised ISR 2025E-2026E ~ EUR 0.3bn p.a. ~ EUR 0.1bn p.a. +/- + ~ EUR 0.4bn p.a. ~ 6.5% CSM amortization rate1 (vs 8% prior estimate) 0 5 10 15 20 0% 20% 40% 60% 80% 100% FinSol Longevity Protection Year Illustrative CSM stock run-off pattern by product Simplified and illustrative 1. Applied to the closing CSM (before amortization) at the half year or the full year
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L&H: growing and creating value from a lower base 25 Technical profitability > +2pts New business IFRS RoE 2026E vs 2023 ~ EUR 0.4bn p.a. Insurance service result 2025E-2026E Efficiency EUR 30m Additional management expense savings ~ EUR 0.4bn p.a. New business CSM 2025E-2026E 1% to 3% p.a. CSM growth 2025E-2026E New New Updated Value creation Updated New 1. Under IFRS 17, there remains an ongoing potential for volatility resulting from BAU activity, ongoing management actions, lapse and other variances; On management actions, variations may arise from the actual outcome vs the modelled result in the best estimate liability 2025-2026 L&H assumptions1
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26 Higher margin new business, with significantly improved business mix by 20261 Strengthened in-force management to protect and deliver value Improved competitiveness through higher cost efficiency Conclusion Strong focus on cashflow generation
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Investor Day 12 December 2024 Property and Casualty outlook Jean-Paul Conoscente, CEO SCOR P&C
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Leveraging Tier 1 franchise and hard market to expand into attractive lines 28 P&C Reinsurance SCOR Business Solutions Enhance portfolio diversification through attractive Treaty Lines Maintain a prudent approach to business exposed to climate change Accelerate the development of Alternative Solutions Grow diversifying lines whilst considering their respective cycles Leverage leading position in construction and energy to meet the world’s infrastructure and transition needs Build a balanced and resilient book, actively managing volatility
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Alternative Solutions Achieving significant growth and diversification in 2024 1. Over the period 2024-2026; 2. January to September 2024 compared with January to September 2023; 3. Compared to 2023. Excludi ng a large multi-year contract which commuted at end-202329 Forward 2026 on track P&C Reinsurance Accelerated growth on diversifying lines (Engineering, IDI, Marine and International Casualty) SCOR Business Solutions Strong development of the Construction book, focusing on local and New Energy business Forward 2026 ambition (x2 EGPI3) achieved in just one year Forward 20261 2024 YTD2 +8% p.a. +15% EGPI growth on diversifying lines Forward 20261 2024 YTD2 +12% p.a. +24% EGPI growth on Construction 2023 9M 2024 0.5 0.9 x1.7 EGPI growth on Alternative Solutions (in EUR billion)
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Growing Alternative Solutions in a favorable market 30 Premium growth and higher risk retention in P&C insurance putting cedants’ regulatory capital under pressure Increasing Nat Cat frequency, inflation and higher risk retentions intensify cedants’ needs for P&L protection and cash flow management A growing demand for structured reinsurance products Market outlook Structured volatility solutions Structured capital relief solutions Out of focus unless highly structured Targeting solutions not requiring meaningful Nat Cat capacity Key growth area in Forward 2026 Volatility mostly staying with cedants given structuring features, while protecting for capital events Low capital required benefiting from reinsurers’ capital model and larger diversification High return on allocated capital
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Accelerating growth of Alternative Solutions 31 IFRS 17 insurance revenue is net of commissions In general, EGPI is earned through in IFRS insurance revenue over 2 years AS has a slightly positive impact on IFRS 17 combined ratio (vs IFRS 4 underwriting ratio), driven by the exclusions of fixed commissions and NDIC EGPI Fixed commission Profit commission (NDIC) IFRS 17 insurance revenue 20231 9M 2024 2026E 0.5 0.9 ~x3 Slightly positive impact on overall P&C combined ratio c.-60% Updated Forward 2026 ambition Estimated Gross Premium Income (EGPI) EUR billion Favorable market context SCOR perceived as a strong, reputable Alternative Solutions provider IFRS 17 net combined ratio 2025E-2026E Rest of P&C AS positive impact Overall P&C < 87% 1. Excluding a large multi-year contract which commuted at end-2023
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32 EGPI Growth Ultimate insurance revenue Growth FY N-1 FY N FY N+1 FY N+2 UWY N-2 Total P&C 106 83 42 UWY N-1 Total P&C 100 -5% 79 -5% 39 39 UWY N RI (excl. AS) 80 +7% 64 32 32 AS RI 9 +150% 4 2 2 SBS 22 0% 18 9 9 Total P&C 111 +11% 85 +8% 43 43 UWY N+1 Total P&C 121 +10% 92 +8% 46 46 UWY N+2 Total P&C 130 +7% 99 +7% 49 Insurance revenue Excl. impacts from multi-year contracts and late premium updates 81 82 89 95 yoy growth rate +1% +8% +8% -60% for Alternative Solutions -20% for other lines 50% year N 50% year N+1 1. AS: Alternative Solutions; EGPI: Expected Gross Premium Income; FY: Financial Year; RI: Reinsurance; UWY: Underwriting year EGPI earned over two years on average Insurance revenue is net of fixed commissions and NDIC. These two elements combined represent ~60% of EGPI for Alternative Solutions and ~20% for other lines of business Insurance revenue can be influenced by large multi-year contracts and late premium updates – negative base effect expected at EUR -150m for the 2025E insurance revenue growth (~ -2%pts impact) Confirming 4% to 6% CAGR for P&C insurance revenue growth Illustrative view1Modelling considerations
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2025 P&C market offering attractive opportunities for SCOR 33 Modest price reductions on some lines, whilst underlying terms & conditions are holding Pricing adequacy remains strong for most lines 2024 active Nat Cat losses fueling treaty market demands ahead of January 2025 renewals Attractive current conditions in most lines and markets Largely unchanged rates and terms & conditions expected Double-digit premium1 growth expected for underwriting year 2025, leveraging Tier 1 franchise and recognized technical expertise P&C Reinsurance SCOR Business Solutions 1. Measured by estimated gross premium income (EGPI)
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34 Unchanged P&C strategy. Delivering on the Forward 2026 ambitions and targets, building on the strong 2024 achievements, and accelerating growth on Alternative Solutions.1 Continue to leverage SCOR’s Tier 1 franchise and favorable market conditions, to further diversify, reduce volatility and build a resilient book. Maintain engagement with clients to develop solutions that address their needs in the evolving risk landscape, through strategic partnerships and innovation. Conclusion
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Investor Day 12 December 2024 CFO update François de Varenne, CFO and Deputy CEO
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36 Addressing challenges and making significant progress for a new SCOR SCOR’s responsesKey priorities Operating cash flow generation 3 Progress and updated view on net cash flow from operations Reserving positions for P&C and L&H 1 Both at best estimate, supported by external reviews Financial leverage and refinancing strategy 4 Temporary increase in financial leverage driven by refinancing Capital management framework 5 Committed to Forward 2026 dividend policy Group earnings power for 2025-2026 ROE > 12% and EV growth of 9% p.a. unchanged for 2025-20262 36 Progress on levers to be “future-ready” 6 Well on track on Capital Allocation, ALM and Risk Partnerships
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Best estimate reserves for P&C and L&H, supported by external reviews 37 2024 P&C reserves at best estimate 100% of L&H portfolio reviewed by Milliman2 1 SCOR’s 2024 P&C internal annual review is completed with all lines at best estimate This is supported by WTW’s external review for a 2nd consecutive year WTW’s review covered “100% of SCOR’s Group’s global P&C claims reserves1 with an independent review for 77% of claims reserves and a peer review for the rest” WTW concluded that “This redundancy has increased from that in our prior review as at 30 September 2023.” 1. Gross of retrocession and undiscounted on an earned basis of €19.983 billion. Further details of the WTW review are set out on slide 61; 2. Further details of the Milliman review are set out on slide 62 The Milliman review “covered 100% of the gross PVFCF”, with “an independent review for the material lines of business representing 76% of the gross PVFCF […] and a peer review for less material lines of business.” “Milliman has concluded that in aggregate at the group level the valuation of the PVFCF, RA and CSM gross of retrocession is materially reliable and in a range of reasonableness.”
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CSM growth 1% to 3% p.a. Group earnings power for 2025-2026 ROE > 12% and EV growth of 9% p.a. unchanged for 2025E-2026E 38 ROE > 12%2 p.a. 1. Growth at constant economics (the starting point of each year is being adjusted for the payment of the proposed dividend f or the preceding year); 2. Assuming a 30% corporate income tax rate for 2025-2026 L&H insurance service result p.a. 2025E-2026E ~ EUR 0.4bn < 87.0% P&C net combined ratio 2025E-2026E Investment regular income yield 2026E3.4% to 3.8% ~ EUR 1.2bn Management expenses 2026E 4% to 6% CAGR P&C insurance revenue 2023-2026E 1% to 3% CAGR P&C new business CSM 2023-2026E ~ EUR 0.4bn L&H new business CSM p.a. 2025E-2026E 9% p.a. EV growth1 2025-2026 updated assumptions Updated Updated New 2
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39 Forward 2026 assumptions Insurance service result (ISR) ~EUR 0.4bn p.a.EUR 500 to 600m p.a. New business CSM 1% to 3% CAGR3 2023-2026E CSM amortization rate ~ EUR 0.4bn p.a. ~ 6.5%1~ 8% 2025-2026 updated assumptions2 CSM amortization rate: lowered to 6.5% from ~8% driven by a change in cashflow profile following the 2024 assumption review CSM stock to grow progressively with new business CSM more than offsetting CSM amortized Protect and deliver value from in-force; intrinsic IFRS volatility remains Improve in-force over time as more profitable new business is addedCSM growth n.a. 1% to 3% p.a. 2025E-2026E 1. Applied to the closing CSM (before amortization) at the half year or the full year; 2. Under IFRS 17, there remains an ongoing potential for volatility resulting from BAU activity, ongoing management actions, lapse and other variances; On management actions, variations may arise from the actual outcome vs the modelled result in the best estimate liability; 3. Compound Annual Growth Rate Updated Updated Updated New 2 L&H financials: rebasing profit level and growing progressively CSM Group earnings power for 2025-2026
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40 P&C financials: reiterating confidence in growth at attractive margins 40 Forward 2026 assumptions Net combined ratio o/w Cat ratio o/w Discount effect < 87%< 87% New business CSM Insurance revenue 2025-2026 updated assumptions ~ 10% -6% to -7% ~ 10% -7% to -8% Insurance revenue: strong growth will convert into insurance revenue in 2025- 2026 as the premiums are earned through Combined ratio maintained < 87%: - Cat budget remains at ~ 10% - Lower discount effect offset by reduced buffer building in 2025-2026 - Slower buffer building, opportunistically in accordance with Group profitability Updated 1. Compound Annual Growth Rate 1% to 3% CAGR1 2023-2026E 1% to 3% CAGR1 2023-2026E 4% to 6% CAGR1 2023-2026E 4% to 6% CAGR1 2023-2026E 2 Group earnings power for 2025-2026
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41 Group earnings power for 2025-2026 Investments: high regular income yield benefiting from elevated reinvestment rates 2 High regular income yield expected for 2025 and 2026, from: - High reinvestment rates due to still-elevated interest rates - Increase portfolio duration in 2024 by +0.5 years3 with enhanced ALM framework FY 2023 9M 2024 2026E Regular income yieldReinvestment rates1 4.5% 4.7% 4.8% 4.1% Q4 2023 Q1 2024 Q2 2024 Q3 2024 3.5% 3.8%2 3.4%2 3.2% 1. Corresponds to theoretical reinvestment yields based on asset allocation to yielding asset classes (i.e., fixed income, loans and real estate), according to current reinvestment duration assumptions and spreads, currencies, yield curves prevailing for each quarter end. Reinvestment yield is not an actual measure of yields achieved on new investments; 2. Assumptions under market conditions as of 30/09/2024; 3. to 3.5 years at Q3 2024 vs 3.0 years at FY2023 for the fixed income investments
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2023 2024E 2025E 2026E Group earnings power for 2025-2026 Accelerating Group Transformation and Simplification 42 Management expenses without transformation and savings Estimated Management expenses with savings EUR 150m savings > EUR 150m savings incl. reinvestments Group Transformation & Simplification initiatives well advanced, leading to an acceleration of EUR 150m savings target delivery by almost 1 year Additional savings of EUR 30m from a more efficient and focused L&H organization following the L&H strategic review, allowing for savings > EUR 150m and reinvestments in growth areas and operational excellence Flat management expenses of ~ EUR 1.2bn between 2023 and 2026 Group management expense evolution 2023-2026E, illustrative 2 EUR 1.2bn
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Update structure to manage cash and profits Reduce volatility of French statutory accounts Project to relocate an internal retrocession platform to France Enhance underwriting capabilities in France for strategic lines of business (Structured Solutions) Centralize P&C underwriting with large cedants through a new Global Client Unit in France Internal retrocession Underwriting profit relocation Entity relocation Objectives Actions launched Ensure protection of existing French Deferred Tax Assets (DTAs) Support future cash generation in France through operating profit and utilization of DTAs Benefit from tax losses carried forward but not yet recognized, to recover tax benefits from past losses, beyond the plan horizon Started in 2024 Start in 2026 Start in 2025 Reduce fixed costs at the holding company Transformation and simplification Started in 2024 Group earnings power for 2025-2026 Repatriating profits to France to ensure full benefit of French DTAs 43 Status 2
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Updated view on net cash flows from operations 44 Group cash flows from operations 2026E1 EUR billion 3 1. Net cash flow from operations = technical cash flow from operations + allocated investment cash flow – allocated management expenses – allocated taxes and miscellaneous, post-tax Forward 2026 -0.3 -0.2 1.0 Updated Forward 20262 ~1.5 ~1.0 0.3 1.2P&C New business delivering strong cashflows Lagged claims payment expected to end in 2026 Return to normal expected in 2027 of ~EUR 1.2bn L&H L&H P&C Group Centralized capital management and liquidity team Improved intra-group allocations (investment, tax, corporate cost, etc.) 50% from 2024 L&H assumption review and additional CSM tax payment in Canada 50% from higher intra- group allocations Lagged payment of P&C large claims to impact 2025-2026 (High baseline in 2023: EUR 1.5bn) Impacted mainly by assumption review and higher intra-group allocations Expected to break even in 2026
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Refinancing strategy impacts financial leverage in the short-term Q3 2024 Updated 2026E1 Subordinated debt Economic Value 2.6 8.4 EUR billion 22.7% < 25% Financial leverage ≈ Expected increase in financing expenses of ~ EUR 25m to 30m over 2025-2026 Financial leverage to temporarily increase by 2-3pts over the next 4-5 years in line with debt refinancing strategy in favor of larger tranches Sub. Debt Sub. Debt + Economic Value Continue to offer AA level of security Updated 4 1. Forward 2026 assumption was < 20%45
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SCOR has an attractive capital management framework for its shareholders, that favors cash dividends and may also include share buybacks or special dividends SCOR aims to offer a resilient and predictable dividend SCOR intends, through this capital management framework, to distribute to its shareholders a significant portion of the Economic Value growth To this end, SCOR follows a four-step process 1 Committed to Forward 2026 capital management framework and dividend policy Consider the Economic Value growth and analyze its drivers Set the regular dividend for the current year at a level at least equal to the level of the regular dividend of the previous year Ensure the Solvency Ratio, accounting for future growth or potential management actions, remains in the optimal range (185-220%) 2 3 4 Complement the regular dividend with share buybacks or special dividends on an optional basis 5 46
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Progress on levers to be “future-ready” Capital allocation: combining both IFRS and SII frameworks 47 Growth Steer capital allocation at a more granular level to drive disciplined cycle management Allocate capital to grow a balanced and diversified portfolio with a lower capital intensity that maximizes value creation Objectives 1st step: IFRS capital performance framework will be effective as of 1st January 2025 as the main KPI to monitor capital performance 2nd step: Solvency II capital generation framework to be refined in 2025 to more granular portfolios Capital allocation and portfolio steering will be based on combined IFRS and Solvency II frameworks by the end of 20251 Stay within the limits of Forward 2026 Risk Appetite 6 1. Pricing continues to use SCOR’s Economic Value Added framework
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ALM: on track towards a dynamic framework 48 First impacts Lengthened asset duration1 Progress since Sept. 2023 Enhanced the ALM team Next steps Reduced SCR with an expected positive solvency ratio impact to be reflected in Q4 2024 Refine SCOR’s hedging program with expected positive impacts on solvency ratio and sensitivities in 2025 Improve sensitivities monitoring for FX, interest rates and inflation Constantly adapt governance between ALM, Investments and Risk, with a clarified Risk Appetite Framework Reduced solvency ratio sensitivities to interest rates and FX Developing an ALM framework to protect shareholder economic value against market variances, and allow dynamic trade-off between investment objectives and regulatory / accounting constraints Move to a dynamic economic value protection once solvency ratio is in the upper part of its optimal range 6 Progress on levers to be “future-ready” 1. to 3.5 years at Q3 2024 vs 3.0 years at FY2023 for the fixed income investments Developed centralized data platform for Finance and Risk with enhanced granularity for FX and interest rate sensitivities Implemented FX and Interest Rates Risks hedging strategy, including derivatives
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Progress on levers to be “future-ready” Risk partnerships: leveraging SCOR’s Tier 1 franchise and expertise 49 Objective and progressRisk partners +60% fee income by 20261 Multiple income sources Traditional retro providers and capital market providers: – Proportional capacity – Scalability – Multi-year basis Whole account stop-loss, covering both P&C and L&H Expand new partners (+3 partners in 2024) Support underlying portfolio growth Manage risk exposure Generate additional fee revenue Overriding commission for proportional retrocession Expected profit commission Fees for tail risks Investment opportunities through sidecars: Worldwide Cat, Worldwide multiline, casualty, etc. +50% capacity by 2026 1. Compared to 2023, based on a revised scope for risk partnerships; 2026 ambition remains unchanged i.e. ~EUR 50m increase compared to a rebased 2023 gross fee income of EUR 82m; The fee income from risk partnerships is included in the insurance service result 6
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50 P&C and L&H reserves fully reviewed, supported by third parties and at best estimate with buffers1 Committed to delivering on targets and generating capital in a sustained manner Significantly simplified processes and continue to progress to shape the reinsurer of tomorrow Conclusion Committed to Forward 2026 dividend policy
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Investor Day 12 December 2024 Conclusion Thierry Léger, CEO
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Growing in a diversified and profitable way Above capital generation In line with capital generation Below capital generation Financial solutions Longevity Marine, Engineering, IDI, International Casualty Alternative Solutions P&C short-tail Nat Cat Protection 52 L&H P&CGrowth strategy US Casualty =
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Return on equity2 > 12% p.a. 1. Growth at constant economics (the starting point of each year is being adjusted for the payment of the proposed dividend f or the preceding year); 2. Assuming a 30% corporate income tax rate for 2025- 2026; 3. Based on 9M 2024 Driving Economic Value growth through shareholders’ equity growth 53 ~ 50% ~ 50% 2024E3 2025E 40% to 45% 55% to 60% 2026E 9% p.a. Economic Value growth1 CSM growth 1% to 3% p.a. New
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Contributing to building resilient societies 54 Environmental Reach Net Zero emissions by 20501 with new targets announced at the 2024 AGM: x3.5 low-carbon energy insurance and reinsurance by 20302,3 Reduce carbon intensity portfolios of P&C by 23% by 20302,4 Social Governance Commit to gender diversity, accelerate the feminization of SCOR’s governing bodies Increase female senior leaders to 30% by 20255 A governance in line with best practices, with a seasoned Board of Directors and an experienced leadership team focused on execution 1. Actions to decarbonate SCOR portfolios on both underwriting and investments depend on externalities out of the Group’s control, mainly decisions from policy makers and actions taken by clients and investees; 2. Compared to 2020; 3. Using SCOR’s EGPI (Estimated Gross Premium Income); 4. For P&C portfolios of European clients, Direct and facultative property and casualty, based on available data; 5. Initially 27%
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Excellent performance of P&C generates strong profits, capital and reserve resilience 55 Forward 2026 leverages SCOR’s Tier 1 franchise and the expertise of its people to create significant value over the plan period1 New L&H strategy will improve profitability over time whilst protecting and delivering value from in-force Conclusion
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Investor Day 12 December 2024 Appendix
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Operations Be exemplary with our own footprint and behaviors Reach net zero emissions on operations by 2030 Business Deploy capacity for low- carbon assets and engage with clients on their own commitments and strategy Double insurance and facultative reinsurance coverage for low-carbon energy by 2025, and multiply such coverage by 3.5 times by 20302 Engage with clients representing at least 30% of SCOR Business Solutions premium regarding their ESG commitments and their transition strategy, over the new strategic plan period x3.5 low-carbon energy insurance and reinsurance by 2030 (vs 20202,3) Reduce carbon intensity portfolios of P&C by 23% by 2030 (vs 20202) Reach Net Zero emissions by 20501 1. Actions to decarbonate SCOR portfolios on both underwriting and investments depend on externalities out of the Group’s control, mainly decisions from policy makers and actions taken by clients and investees; 2. Using SCOR’s Estimated Gross Premium Income (“EGPI”) for 2020 as the baseline; 3. For P&C portfolios of European clients, Direct and facultative property and casualty, based on available data; 4. Measured by market value -55% of carbon intensity on equities and corporate bonds by 2030 and -27% by 2025 (vs 2019) -50% of carbon intensity on real estate investments by 2030 (vs 2020) Double the amount4 of green and sustainable bonds by end of 2024 (vs 2020) Reverse biodiversity loss by 2030 Investment Materially reduce the carbon intensity of our investment portfolio 57
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Portfolio mix for P&C Reinsurance and SCOR Business Solutions (1/2) SCOR Business Solutions 12% 3% 4% 3% 8% 6% 4% 60% EGPI2 2024E Casualty Other Credit & Surety Cyber Construction Marine&Offshore Alternative Solutions Property P&C Reinsurance1 10% 4% 13% 5% 2%5% 7% 1% 10% 9% 4% 31% EGPI2 2024E Motor Decennial Casualty Other Cyber Engineering Marine&Offshore Aviation & Space Alternative Solutions Credit & Surety Agriculture Property Long-tail Mid-tail Short-tail Long-tail Mid-tail Short-tail 1. MGAs have been moved from SBS to treaty; 2. Estimated gross premium income 58
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Portfolio mix for P&C Reinsurance and SCOR Business Solutions (2/2) SCOR Business SolutionsP&C Reinsurance 15% 8% 43% 34% EGPI1 2024E APAC Latin America North America EMEA 16% 10% 32% 24% 18% EGPI1 2024E APAC Latin America & Caribbean North America North, Central & Eastern Europe Western Europe & Middle East and Africa 1. Estimated gross premium income 59
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L&H CSM breakdown as of 30/09/2024 60 By geography By business Europe APAC North America Protection US Protection Non-US Longevity Financial Solutions 47% 23% 30% EUR 4.7 bn 17% 43% 37% 3% EUR 4.7 bn
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Details of reserve review by WTW 61 The scope of WTW’s work was to form an opinion on the gross of retrocession global claim reserves for the non-life (“P&C”) business of SCOR Group as at 30 September 2024. The analysis was based on a combination of independent reviews and separate peer reviews of SCOR internal actuarial reports for specific business segments. WTW concluded that, as at 30 September 2024, SCOR Group’s global P&C earned claims reserves, undiscounted and gross of retrocession are greater than WTW’s corresponding best estimate. This redundancy has increased from that in our prior review as at 30 September 2023. WTW’s review covered 100% of the earned claims reserves, undiscounted and gross of retrocession of €19.983 billion. Segments representing 77.1% of reserves were independently reviewed. The remaining 22.9% were peer reviewed. • The scope of WTW’s review excludes SCOR Group’s life and health business. • WTW’s conclusions are based on a series of assumptions as to the future. It should be recognised that actual future claim experience is likely to deviate, perhaps materially, from WTW’s estimates. This is because the ultimate liability for claims will be affected by future external events; for example, the likelihood of claimants bringing suit, the size of judicial awards, changes in standards of liability, and the attitudes of claimants towards the settlement of their claims. • WTW has not anticipated any extraordinary changes to the legal, social, inflationary or economic environment, or to the interpretation of policy language, that might affect the cost, frequency, or future reporting of claims. In addition, WTW’s estimates make no provision for potential future claims arising from causes not substantially recognised in the historical data (such as new types of mass torts or latent injuries, terrorist acts), except in so far as claims of these types are included incidentally in the reported claims and are implicitly developed. • WTW’s analysis was carried out based on data as at the valuation date of 30 September 2024. WTW’s analysis may not reflect development or information that became available after the valuation date and WTW’s results, opinions and conclusions presented herein may be rendered inaccurate by developments after the valuation date. • SCOR Group has asbestos, pollution and other health hazard (APH) exposures which are subject to greater uncertainty than typical accident or event loss exposures. Due to the low overall materiality of the exposure and limitations in the data available, WTW projected SCOR’s APH claims, excluding US sexual abuse claims, using industry benchmarks on an aggregate basis. For US sexual abuse claims, WTW’s analysis was based on detailed exposure modeling. There is a high level of uncertainty affecting these claims. Due to this inherent uncertainty, the actual losses could prove to be significantly different to the SCOR estimated loss amounts for these claims. • Since 2021 sharp increases in inflation in many economies worldwide have resulted from recent rises in energy, food, component and raw material prices driven by wider economic effects of the Russia-Ukraine conflict, Israel-Gaza conflict, future effects of geopolitical tensions combined with factors such as supply chain disruptions caused by the COVID-19 pandemic and labour shortages. Generally, inflation has reduced to more normative levels in response to policy responses by central banks and governments. However, prospective inflationary risks remain high due to the continuing Russia-Ukraine conflict, Israel-Gaza conflict and heightened geopolitical tensions with increased possibilities of hitherto unexpected conflict escalation. In addition, our estimates do not consider the potential impact of the results of the 2024 US elections, including but not limited to any potential on future inflation. • Longer term implications for inflation from current conflicts, heightened geopolitical tensions, increased energy prices, potential reductions in food supplies, disruption in global trading and their impacts on insurance exposures remain highly uncertain. The WTW analysis makes no explicit allowance for extraordinary future effects that may result from the above factors or other emerging shocks on the projection results. • The estimates are in Euros based on exchange rates provided by SCOR Group as at 30 September 2024. A substantial proportion of the liabilities is denominated in foreign currencies. To the extent that the assets backing the reserves are not held in matching currencies, future changes in exchange rates may lead to significant exchange gains or losses. • In its review, WTW has relied on audited and unaudited financial information and data supplied to us by SCOR Group and its subsidiaries, including information given orally and on information from a range of other sources. WTW relied on the accuracy and completeness of this information without independent verification. However, WTW has reviewed this information for general reasonableness and consistency with its knowledge of the insurance industry. WTW’s analysis inherently assumes that this information is complete and accurate. WTW has not attempted to determine the quality of the current asset portfolio of SCOR Group, nor has WTW reviewed the adequacy of the balance sheet provisions except as otherwise disclosed herein. Except for any agreed responsibilities WTW may have to SCOR Group, WTW does not assume any responsibility and will not accept any liability to any other party, whether in tort (including negligence) or otherwise for any damages suffered by such party arising out of this commentary or references to WTW in this document.
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Milliman opinion 62 Milliman (thereafter ‘’Milliman’’ or ‘’We’’) has been engaged by SCOR group (SCOR) to form an Opinion of the gross of retrocession Present Value of Future Cash Flows (‘’PVFCF’’), Risk Adjustment (“RA”) and Contractual Service Margin (‘’CSM’’) for the Life and Health Business of SCOR as of 30th September 2024. Our review has been based on the prevailing IFRS standards and the calculations do not take into account any potential futurechanges of these standards. Our work has not covered a review of the CSM at the previous closing dates, nor a review of the potential impact on the reserves of any informal or formal legal disputes that might arise with a third party. The objective of our independent review was to ensure the appropriateness of the methodologies and assumptions used, and to establish an opinion on the coherent and reasonable character of Life & Health PVFCF, RA and CSM results performed internally by SCOR taking into accountthe available data and assumptions as of 30th September 2024. Our review covered 100% of the gross PVFCF in absolute value. We have in particular performed an independent review for the material lines of business representing 76% of the gross PVFCF in absolute value and a peer review for less material lines of business representing a total of 24% of the gross PVFCF in absolute value. Milliman has concluded that in aggregate at the group level the valuation of the PVFCF, RA and CSM gross of retrocession is materially reliable and in a range of reasonableness. We have based our review on the data and information provided by SCOR without carrying out exhaustive checks and controls on these data. We have performed consistency checks and reconciliations at a local and global level, in conjunction with detailed analyses for certain specific calculations and have not found material defects in the data. If there are material defects in the data, it is possible that they would be uncovered by a detailed, systematic review and comparison of the data to search for data values that are questionable or for relationships that are materially inconsistent. Such a review was beyond the scope of our assignment. In determining the PVFCF, RA and CSM, assumptions have been made about future experience, including mortality, longevity, morbidity, lapses, policyholder behaviour, management actions and expenses. Actual experience may differ from that assumed in these projections. To the extent that actual experience is different from the assumptions, actual results will also differ from the projected results. Our work has been performed according to our engagement letter with SCOR. Milliman does not assume any responsibility and will not accept any liability to any other party in relation to our Opinion.
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First call date schedule of SCOR’s debt instruments 250 600 250 500 300 2025 2026 2027 2028 6171 2029 2031 Issued in 2014 Perpetual Issued in 2015 Maturity in 2046 Issued in 2015 Maturity in 2047 Issued in 2016 Maturity in 2048 Issued in 2018 & 2019 Perpetual Issued in 2020 Maturity in 2051 EUR million USD million As at Q3 2024 63 1. After cross currency swap for SCOR’s USD-denominated debts
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Solvency ratio consistently above or within the optimal range 225% 213% 215% 226% 220% 226% 213% 209% 203% 2016 2017 2018 2019 2020 2021 2022 2023 Q3 2024 220% 185% A1 Stable Outlook A+ Stable Outlook A Under review with developing implications A+ Stable Outlook Financial strength ratings SCOR solvency ratio and credit ratings 64
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SCOR Group’s capital structure under Solvency II As at H1 2024, in EUR billion High quality of eligible own funds: • Unrestricted Tier 1 representing 73% of EOF and 147% of SCR Well managed EOF capacities: • RT1 remaining capacity : EUR 0.8bn • T2 remaining capacity : EUR 0.7bn 65 1.5 0.9 6.7 EOF SCR 17% Tier 2 10% Restricted Tier 1 73% Unrestricted Tier 1 9.1 4.5
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Execute the capital management framework Accelerate growth of profitable business Consider acquisitions Reconsider risk profile, including capital shield strategy 185% 100% 220% Execute the capital management framework Grow profitable business Adjust investment profile Adjust the composition of the P&C and L&H portfolio of risks Maximize use of retrocession Consider capital relief deals or private placements Review debt management strategy Consider rights issue Restructure activities Solvency Ratio Optimal range Forward 2026 targets: 1. Solvency ratio in the optimal range 185% to 220% range; 2. Economic value growth of 9% p.a. over 2025-2026 (growth at constant economic assumptions and excluding the mark to market of the option on own shares; Economic Value defined as the sum of the shareholders” equity and the Contractual Service Margin (CSM) net of tax Forward 2026 solvency management framework 66
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ALM Asset Liability Management – Risk-management technique aimed at earning adequate returns and protecting capital by simultaneously managing the duration and other relevant characteristics of assets and liabilities AuM Assets under Management – Total value of assets managed by an investment entity Alternative Solutions (AS) Customized, non-traditional, and new products/solutions provided when conventional (re)insurance is inadequate or unavailable. This includes (re)insurance solutions for Capital Optimization, Earnings and Cash Flow Volatility management, Protection Gap cover and Special Situation needs CAGR Compound Annual Growth Rate Combined Ratio Sum of P&C insurance service expense divided by the P&C net insurance revenue. The ratio is net of retrocession Contractual Service Margin (CSM) Represents the unearned profit on a contract to be recognised as it provides services in the future. It is gradually recognized in the income statement through the CSM amortization Credit & Surety Credit insurance provides insurance coverage against loss to a supplier caused by customers’ failure to pay for goods or services supplied. Surety insurance relates to sureties and guarantees issued to third parties for the fulfillment of contractual liabilities Deferred Tax Assets (DTA) Arises when a company has paid more taxes in the past than it owes, or when it has tax losses that can be used to offset future taxable income. If a company has incurred tax losses, these can be recognized as DTAs on the balance sheet, anticipating that they will be used to offset future taxable income Economic Value Sum of shareholders' equity and CSM net of tax. A notional tax rate of 25% is applied to the CSM EGPI Estimated Gross Premium Income – EGPI for a contract represents the ultimate premium written for an underwriting year, while GWP reports only the premium written for a given financial year ESG Environmental, Social, and Governance – criteria used to evaluate the sustainability and ethical impact of activities, including investments Engineering Engineering insurance provides economic safeguard to the risks faced by the ongoing construction project, installation project, and machines and equipment in project operation IDI Inherent Defects Insurance – Specific insurance product providing building owners and construction companies with protection against damage caused by defects in design, workmanship or materials affecting the structure, external walls and roofs, and any consequential damages to non-structural works and equipment. Product known as “assurance décennale” in France IFIE Insurance Finance Income or Expenses – reflects the unwind of the discounting of insurance liabilities Appendix M: Glossary – A to I 67
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Insurance Revenue Sum of expected claims and expenses for the relevant period, CSM amortization, Risk Adjustment release and amortization of existing onerous contracts Insurance Service Result (ISR) Difference between Insurance revenue and Insurance service expenses net of retrocession effect Longevity The relative incidence of survival of Life insureds or annuitants holding a Life insurance policy Marine Marine insurance covers the physical loss or damage of ships, cargo, terminals, and any transport by which the property is transferred, acquired, or held between the points of origin and the final destination Management Expenses Management costs monitored by SCOR, including exceptional costs. Excludes “Other income and expenses”, “Other operating income and expenses”, Lloyd’s expenses and financing expenses Mortality The relative incidence of death of Life insureds or annuitants holding a Life insurance policy Nat Cat ratio Natural Catastrophe Ratio – Net claims related to natural catastrophes divided by the P&C net insurance revenue Non-distinctive Investment Component (NDIC) Under IFRS 17, refers to the portion of an insurance contract that must be repaid to the policyholder even if no insured event occurs. This component is excluded from insurance revenue and insurance service expenses in the profit and loss statement. Net Zero Emission Plan from United Nations, aiming at cutting carbon emissions to a small amount of residual emissions that can be absorbed and durably stored by nature and other carbon dioxide removal measures, leaving zero in the atmosphere New Business CSM New Business Contractual Service Margin (CSM) - CSM associated with new insurance contracts written during a period Onerous Contracts Contracts which are deemed unprofitable at a point in time, hence not generating any CSM. Movements on onerous contracts flow through P&L. P&C lines Include Property, Property Cat, Casualty, Motor, and other related lines (Personal Insurance, Nuclear, Terrorism, Special Risks, Motor Extended Warranty, and Inwards Retrocession) Pension Risk Transfer Process where defined-benefit pension providers seek to remove some or all of their obligations to pay guaranteed retirement income or post-retirement benefits to plan participants. This is typically done by transferring assets to a life insurer, who then assumes the annuity risk for the plan participants Protection Protection encompasses traditional Life reinsurance business on living and death benefits. The main risks undertaken are mortality, morbidity and behavioral risks for individuals and groups of individuals. Risk Adjustment (RA) Cost of capital to cover the uncertainty about the amount and timing of the future cash flows released as insurance service is fulfilled. It is gradually recognized in the income statement through the RA release. Appendix M: Glossary – I to R 68
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Regular Income Yield Interest revenue on debt instruments not measured at FVTPL (fair value through profit and loss), other regular income and net real estate rental income divided by total invested assets Reinvestment Rate Theoretical reinvestment yields based on asset allocation to yielding asset classes (i.e., fixed income, loans and real estate), according to current reinvestment duration assumptions and spreads, currencies, yield curves prevailing at each quarter end Retrocession Transaction in which the reinsurer transfers all or part of the risks it has underwritten to another reinsurer, in return for payment of a premium. For SCOR, it notably includes a wide range of protections including proportional and non-proportional coverage Return on Equity (ROE) Group share of net income divided by average shareholders’ equity (calculated as time weighted average shareholders’ equity) Return On Invested Assets (ROIA) Total investment income on invested assets divided by the average invested assets (calculated as the quarterly averages of the total invested assets) Solvency Capital Requirement (SCR) Required capital, under the Solvency II framework, calculated by SCOR’s internal model, ensuring the Group can meet its obligations over the following 12 months with a 99.5% probability. It is the denominator of the solvency ratio Solvency Ratio Assess a company's ability to meet its long-term financial obligations, i.e., repayment of debt principal and interest Specialty lines Include Agriculture, Aviation, Credit & Surety, Inherent Defects Insurance, Engineering, Marine and Offshore, Space, and Cyber Total Liquidity Cash and cash equivalents (which include cash held by the Group on behalf of third parties), short-term government bonds maturing between three months and twelve months from the date of purchase (included in loans and receivables) and bank overdrafts UWY Underwriting Year. The year in which a policy commences or is renewed; to be distinguished from the accounting year. For example, a claim may occur during the current accounting year, but relate to a policy commencing in a prior underwriting year WW Cat XL Worldwide Catastrophe Excess of Loss Yearly Renewable Term (YRT) The yearly renewable term reinsurance is a type of life reinsurance where mortality risks of an insurance company are transferred to a reinsurer, with premiums recalculated annually based on the policyholder's age and risk profile Appendix M: Glossary – R to Z 69