SCOR Se

Ian Kelly - Head of Investor Relations Denis Kessler - Chairman and Chief Executive Officer Mark Kociancic - Chief Financial Officer Frieder Knüpling - Chief Risk Officer Victor Peignet - Chief Executive Officer Global P&C Paolo De Martin - Chief Executive Officer Global Life Francois de Varenne - Chief Executive Officer of Global Investments

Kamran Hossain - RBC Xin Mei Wang - Morgan Stanley In-Yong Hwang - Goldman Sachs Frank Kopfinger - Deutsche Bank Vinit Malhotra - Mediobanca Anasuya Iyer - Jeffries Jonny Urwin - UBS Thomas Fossard - HSBC Vikram Gandhi - Societe Generale

Good morning everybody and thank you for joining the SCOR Group’s 2016 results call. Before we start, I please as you as usual to consider the disclaimer on Page 2 of the presentation, which indicates that the 2016 financial information is audited, and that the group solvency final results are to be filed to supervisory authorities by June 2017, and may differ from the estimates expressed or implied in this report.

And with that we can commence the call, and I give the floor to Mr. Denis Kessler, CEO and Chairman of the SCOR Group, who is joined on this call by the entire committee.

Thank you Ian and good morning everyone. We have some exciting news to give you today, but let’s first recap on the year.

The 2016 was another outstanding year for SCOR and was marked in particular as a successful launch of a new three-year strategy plan Vision in Action. Shortly after launch that was last September, the strength of the new plan was recognized through another upgrade from Moody’s, which cements a position in the top tier as a global and highly diversified market leader.

As part of the capital management policy, which is at the heart of Vision in Action, we successfully issued a new EUR 300 million contingent capital facility to help safe guard the group solvency in terms of extreme catastrophic events. We continue our development in the emerging markets both for Life and for P&C.

SCOR is successfully being granted a license to operate at a branch in India. I’m also pleased to report that our internal model was approved as a regulator with all restrictions lifted.

We also managed to issue debt under excellent conditions to support the financing of the Vision in Action plan. We continue to grow sustainably and profitably in both P&C and Life Reinsurance.

On the P&C side, the renewals demonstrated the strength of a franchise with selective growth and [indiscernible] stable pricing; and as per Vision in Action, we are successfully spending in the US market. On the Life side, we confirmed a strong and growing position in the longevity reinsurance sector, and in-line with what we said, we are expanding the franchise in Asia-Pac.

SCOR is consistent and delivers most of the targets set in Vision in Action have been exceeded. The annualized return on equities stands at 9.5% in 2016.

This is above the target of 800 basis points above the 5-year risk-free rates, and as you can see on the slide, if we were to exclude the cost of reflecting the future French tax rate changes, by the way due to 2020, net income would be at EUR 660 million with a return on equity of 10.4%. In addition to exiting the return on equity target, we have been able to generate significant solvency to capital with the de-solvency ratio now stands at 225% exceeding the higher end of the optimal range.

Let's move to Slide 4, SCOR is consistently delivered, not just on achieving the strategic targets, but also on delivering excellent shareholder returns. Today, I’m able to announce a proposed increase to regular dividend of $0.15 to EUR 1.65 per share; by the way it is an increase of 10%; and a powerful testimony to the strong sustainable earnings as a group, a testimony to the consistent solvency capital generation of the underlying business; and third to the active shareholder remuneration, which we are pursuing.

This increased dividend will be proposed in the next Annual General Meeting to be held on April 27. We have distributed in excess of EUR 2 billion in dividend over the last 10 years, during which Group's rating has risen to AA- and shareholders’ equity as you can see has risen to EUR 6.7 billion.

This translates in the book value per share of EUR 35.94, let’s say almost EUR 36, which is a new record level since the first strategic plan back on track as those were already showed at that time. Let's move to Slide 5, the strong capital generation that supports increased dividend, also supports increased solvency.

In Vision in Action, we described the solvency scale, which by the way remains as same as in previous plans. Indeed consistency and continuity in management of capital is important.

And we describe the management actions as we move up through the solvency scale. Today this group can generate capital sustainably above the optimal range; and today I believe that these core groups fundamentally enters a new era, not one where the solvency for just one point in time goes above the optimal range, but one where there is a longer term direction as the group solvency benefits from the strength of the underlying business fundamentals, the strength of expense ratings, and the optimal use of leverage.

As the year ends, our excess capital is at about EUR 200 million or five points of solvency ratio above the end of the optimal result. The solvency scale provides for specific management actions when we consider upper hand of the optimal range.

Out of those actions, we could consider accelerating growth, provided it means of Vision in Action playing targets. We could consider adopting a risk profile.

We could consider increasing dividend growth rates or buying back shares. At the moment, we don't focus on special dividends or acquisitions, which is of course not excluded.

I would like to announce that today we introduce a framework for share buyback settled with the group to undertake across the next 24 months, a specific share buyback program with the amount and timing to be settled by the Board of Directors in accordance with the group's growth performance. Further to the share buyback program, a word on the merger plans, those are companies as the head of the group.

This project remains on track with work progressing well on dealing with business. We reiterate and operational points and we expect the project to be completed in early 2019.

The merger of the three SE companies in France should provide a group with diversification benefits of up to EUR 200 million of solvency capital upon its completion. I will now hand over to Mark to give you more details on our 2016 financial performance.

Mark, here is the floor.

Thank you Deny and good morning everyone. So moving on to Slide 6, I will walk you through the financial highlights of the 2016 results.

SCOR wrote more than EUR 13.8 billion of gross written premiums in 2016, representing a 5.3% increase over 2015 at constant exchange rates or 3% at current exchange rates. This top line growth was fuelled by the strong contribution of both business engines, SCOR Global Life with an 8.3% rise at constant exchange rates, and SCOR Global P&C with 1.2% growth at constant exchange rates.

SCOR achieved achieves a strong set of results for 2016 with a net income of 603 million, generating a 9.5% return on equity thereby exceeding the group profitability target set at 800 basis points, above the five-year risk-free rates. It’s worth mentioning that the 2016 net income was impacted by the passing of the Finance Bill 2017, which provides for the planned reduction of French corporate income tax rates from 34.43% to 28.92%, while the group acknowledges this is good news in the long term, it will reduce the tax charge because it will reduce the tax charge.

It also means an adjustment to the P&L, at the end of 2016 in the amount of EUR 57 million. So, as Deny mentioned, excluding this non-cash impact accounting for the downward adjustment of deferred tax assets, the Group would have recorded a 2016 net income of 660 million and return on equity of 10.4%.

The P&C net combined ratio for the full-year stood at 93.1%, while the life technical margin reached 7%. Finally, SCOR Global Investments delivered a solid return on invested assets of 2.9%, benefiting from the execution of the Vision in Action asset management policy.

Moving to Page 8, one of the more impressive value creation metrics for our shareholders is shown by the 5.2% increase in shareholder's equity to EUR 6.7 billion. This translates into a very strong book value per share of EUR 35.94.

The shareholders equity was boosted by the strong net income, the strong foreign exchange impact between the US dollar and the euro, while accounting for the 278 million in dividends that were paid out during the second quarter of 2016. The financial leverage ratio stands at 24.4% under the 25% threshold indicated in Vision in Action.

On Page 9, SCOR delivers excellent recurring cash flow for the year at EUR 1 billion after normalizing for SCOR Global P&C, a return of funds withheld in the amounts of 300 billion, which took place during the third quarter. Cash flow used in financing activities, mainly referring reflects the dividend payment and the impact of our active liability management policies in 2016.

Total liquidity reached EUR 2.3 billion at the end of 2016, compared to EUR 2 billion in 2015, supported by the very strong operating cash flow generation although the rebalancing of the invested assets has commenced. Liquidity is down from the first half of 2016 level of EUR 2.9 billion and Francois will speak to this shortly.

I will now hand it over to Frieder to comment on the Group's solvency ratio evolution.

Thank you, Mark. Slide 10, shows the development of the Group’s solvency position during 2016.

In total, the solvency ratio has increased by 14 percentage points during the year to a level of 225% that means 5 percentage points above the upper end of the optimal range. Economic variances, which are mainly driven by financial market movements have led to a marginal decrease in the solvency ratio by 0.5 percentage point.

We have fully reflected the change in French corporate tax rates. This has reduced the value of DTAs on the existing tax losses, and the loss absorbing capacity of future taxation.

The combination of both effects has reduced the solvency ratio by 3.3 percentage points. A number of areas of our internal model have been improved in 2016.

The most significant change related to the operational risk module. The total impact on the solvency ratio, which also includes the effect of a number of minor changes to other areas is an increase by 4 percentage points.

Operating earnings of the reinsurance portfolio have led to a growth of the solvency ratio by 11.9 percentage points. This includes a bit less than plus 1 percentage point of unwinding of estimates in the year ended 2015 solvency ratio.

The remainder of the increase is driven at the value of new business written by the Life and P&C division's during 2016, and the development of the existing business. As in the previous years, capital and solvency generated by our business divisions is well in excess of the proposed dividend.

Moving on to Page 11, among the sensitivities to financial market parameters, the most significant ones relate to interest rate movements and two large natural catastrophes as in the past. All the potential events included in this list of sensitivity is however would lead to a solvency ratio in the upper half of or above the optimal range, and SCOR will continue to benefit from increases in interest rate.

As a reminder, SCOR does not use any long-term guarantee or transitional measures and its solvency position is not sensitive to the level of the ultimate forward rate. As shown on Page 12 SCOR's risk profile continues to be dominated by insurance underwriting risks, in-line with our stated risk appetite.

In comparison, the contribution of market and credit risks for the total capital requirements is significantly smaller. The Life and P&C underwriting risks continue to be very well balanced.

The level of diversification at this level of aggregation has increased further to 49%, which is a clear indicator of the strengths of SCOR's business model. It is built on the continuous maximizing of diversification, which in turn is the basis of optimizing the Group's capital efficiency and profitability.

With this, let me hand over to Victor for his comments on the P&C portfolio.

Thank you, Frieder and good morning. As you can see on Slide 13, this is another set of very good results and we are continuing on the basis of the metrics of optimal dynamics.

As far as the activity is concerned the Q4 of 2016, and the 1/1/2017 renewals have put us back on the growth trend assumed for optimal dynamics, that is at growth rates slightly above 5% at constant exchange rates, which is at the midpoint of the 3% to 8% range that we have indicated for Vision in Action. This is in-line with the comments that we have made when our Q2 and Q3 2016 results were released showing reduced growth rates, due to specific one-off revisions of prior-year premier estimates by cedants.

These revisions were more particularly related to the aviation, marine, and engineering lines of business. As you would expect knowing our plan, the distribution of the growth is very much waited towards the property and casualty treaty business on the US market.

Both the specialty lines and business solutions are impacted by the situation of the worldwide economy that mostly affects the engineering and marine and energy lines of business. We are however seeing prospects of improvement in the construction area, starting with the US, possibly followed by Asian economies like China, India or Japan whether it be locally or through investments abroad, mostly in infrastructure, power, including renewable energies and water treatment and distribution.

We will see you how the 1/4 and 1/7 renewable will go, and as we said during the 2016 IR Day, we will come back on Monte Carlo with a narrow drench of assumed growth for the Vision in Action plan. As far as the technical and management expenses ratio are concerned, our net combined ratio continues to be very satisfactory at 93.1%.

In addition, the activity continues to produce excellent cash flow. Our normalized net combined ratio is stable at 94.4%.

Here again, we stay in line with the optimal dynamics assumptions and you will recall that our 1/1/2017 renewals only show a marginal deterioration of the expected profitability. There are basically two one-off items to underline in the contents of the net combined ratio and I would like to qualify each of them.

On one side, you will recall that we did reserve releases in Q2 that correspond to a reduction of 0.8% in the net combined ratio of 93.1% over the entire year. The position at the end of the year is that we are reserved at best estimate plus the March that is oversize similar to what it was at the end of 2015.

On the other side, the commission ratio is loaded by one-off adjustments on large specific contracts that are subject to sliding skates. As the loss ratio for these contracts are landing more favorably than expected there is a shift from lower losses that are reflected in the attritional ratio to higher commissions that are reflected in the commission ratio.

These one-off adjustments are neutral from a P&L standpoint, and net of those, the overall commission ratio is down to the level indicated in Vision in Action. That is within the range of 25% to 26%, which reflects the slightly increased rate of proportional in the overall portfolio.

I will now hand over to for Paolo for his presentation of the Life results.

Thank you, Victor. In the Life division we had an excellent year in 2016.

The first quarter in particular has been our strongest quarter on record, in terms of in terms of both volume and results. For the total year, gross written premiums have reach and reached EUR 8.2 billion with an increase at constant exchange rates of 8.3% or 6.4% at current exchange rates.

The growth in 2016 has been very well diversified in terms of both geographical spread and product lines with longevity driving the lion’s share of growth in Q4 standalone. On the results side, we are delivering EUR 526 million of technical result with the margin of 7%.

Strong level of profitability is reached through the combination of profitable new business and strong performance of our in-force portfolio. We are very proud of our achievements over the last three years and of our contribution to SCOR twin-engine strategy.

We’ve integrated the general US acquisition, maintain our leadership in the US, and receive two years in a row the Reactions Magazine award in North America as best Life for Insured. We have further energized our global organization with a new setup base on regional focus and global product lines, which has driven a significant improvement of our competitive position and we have successfully demonstrated our team's ability to grow organically both in terms of footprint and in terms of product offering.

Since 2013, we’ve added EUR 2.1 billion of profitable premiums for a total growth of more than 30% over the last three years. We’re confident about our momentum going into 2017.

We see growth being potentially higher or slightly higher than the Vision in Action assumption of 5% to 6% with the technical margin in-line with the strategic plan assumption. I’ll now hand over to Francois for more details on our Group investment strategy.

Thank you, Paolo. Moving on to Slide 15, SCOR's total investment portfolio reaches EUR 27.7 billion at the end of December 2016, with an invested asset portfolio of EUR 19.2 billion, compared to EUR 18.8 billion at the end of June.

During the second half of 2016, SCOR Global investments has rebalanced its investment portfolio as announced in the vision in action plan. Liquidity was reduced by 3 points, the proportion of corporate bond increased by 5 points and duration of the fixed investment income portfolio with increase from 4 years to 4.5 years compared to June 2016 level.

The high-quality of our fixed income portfolio has been maintained as well with favorable average rating of double AA-. However, SCOR Global investments has maintained a very strict policy of avoiding any sovereign exposure to Eurozone peripheral countries, and as guaranteed no exposure to the French index.

At the end of December, expected cash flows from the fixed income portfolio over the next 24 months stands at EUR 6.7 billion, despite the rebalancing of the investment portfolio completed since the announcement of Vision in Action. It will facilitate the dynamic management of our reinvestment policy as market condition timing.

In spite of the prolonged low yield environment, SCOR Global Investments manages to deliver strong and recurring return on invested assets, which stands at 2.9% for the full year of 2016, well above our risk-free bench mark. Moving on to Slide 16, you will appreciate that a significant structure in the Vision in Action rebalancing has been completed in the second half of 2016.

Consistent with the Group's risk appetite and our continued focus on the preservation of asset value we have practically decided to pull the rebalancing strategy in November 2016 anticipating the market impact of the US elections, and of the Italian referendum, and our asset allocation has remained broadly stable during that period. This does not change our Vision in Action strategic objective and we have resumed our rebalancing strategy early 2017 taking advantage of favorable market for US corporate bond.

This enables us to look at nice yield on its reinvestment program well above recurring fees. Recent financial market development are overall positive for the execution of Vision in Action as illustrated by our reinvestments yield increasing from 1.9% to 2.5% over the last quarter and above our current [indiscernible].

Looking forward, we will continue to redeploy opportunistically on investment portfolio to our Vision in Action strategic asset allocation in order to lock favorable market entry points. Finally, I wanted to state the fact that I believe we are uniquely positioned to take advantage of the global context of rising interest rates and inflation through our asset management policy.

We continue to benefit from our unique currency mix, 48% of our invested assets being denominated in US dollar and only 30% in Euros. More importantly, you can notice that the rebalancing of our investment portfolio completed since the announcement of Vision in Action will not impact our ability to take advantage of improving our investment condition.

We keep high degree of flexibility with EUR 6.7 billion of assets that will be reinvested in the next 24 months without selling any assets we currently own in our portfolio. Excluding, cash more than 30% of our investment portfolio will be available for reinvestment in the next two years, just taking into account redemption and coupon and thus benefiting from [indiscernible] investment rates.

In [indiscernible] environment, it should be noted that the significant reduction of our portfolio 43% is also protected from an increase in inflation or will benefit from an increase of interest rate as illustrated in that chart on the bottom left of this page. Let me finish this presentation my with my expectation on the return on invested assets for the full year 2017.

This year should be as market conditions are low and inflation point for our income yield which should increase on average, thanks to our rebalancing strategy and increasing reinvestments rate. We also expect some recurring capital gains to be generated at some point in the year, mainly coming from non-yielding asset classes.

Having this in mind, I believe a return on invested assets should be in the range between 2.7% and 3.2% for the full year. With this, I will hand it over to Denis Kessler for the conclusion of this presentation.

Thank you for Francois. As you can see 2016 was marked by some key events with Brexit, US election, the Italian referendum and SCOR has been able to navigate these events successfully.

We have an excellent start to the Vision in Action plan. In 2017, we are well placed to continue to deliver on our plans overall, and it has been said again by Francois, interest rate increases are positive for the group and we continue to execute investment strategies, with really [indiscernible] assets to take advantage of increasing rates.

We see positive prospects in the reinsurance market, the SCOR Global P&C has underwritten excellent 1/1 renewals and expands successfully in the US and SCOR Global Life deepens in franchise in Asia Pac and continues to successfully grow the longevity business. The Group is well positioned to leverage changes in legislation with restrictions on the internal model entirely lifted, potential benefits from the US EU collateral agreements that would reduce the need for NOC’s.

And we are unlikely, I repeat unlikely who has a burden of being classified as globally systematically important. Finally, the Group is a stable secure yet fungible capital base with more than 97% of its capital held in advanced economies and currencies.

And on to the final slide, I leave you with a picture of our successors in 2016, under the new Vision is Action plan during H2 of 2016. The Group has achieved an ROE of 10.6% above the minimum target and our solvency ratio of 225% above the optimal range.

While they were in position to continue a success story and execute our plans in 2017. Thank you very much for your attention and Ian we can now start the Q&A session.

Thank you, Denis. Before moving to the Q&A session, quickly, please just note on Page 20 the next scheduled events which are the Q1 2017 results and the annual general meeting, both taking place on April 27.

And also the investor conferences are noted here that we currently plan to attend in 2016. So with that, we can now start the Q&A and I would like to remind you as ever to limit your questions to two each.

Hi, good morning everyone. Three questions.

First of all, on the buyback, can I just ask and if interest rates do come back down, obviously your ratio is 225, it is above the 220, but it is not enormously above than you have been before, if rates do come back down, does that change your thinking on that? So that’s the first question.

And the second question is just about economic cash flow generation, really appreciate [indiscernible] is fantastic that you’re giving that. If I ask the 11.9% operation experience this year, can I ask what that might look like on a - what do you consider this to be like a normal or a pan basis, just record an idea about how the ratio should move over time, any color on that would be really helpful?

Thank you.

Mark?

Right now, we are in a position today to tell the market that we have strong underlying fundamentals both in the technical aspects of the business, I think we are on a positive trend for the investment side and probably more importantly the 225 that you are looking at today is not based on some volatility of - favorable volatility of market conditions, but rather what I have just spoken to which is the solid underlying fundamentals of the business.

I can take the second question, so as I mentioned in the 11.9% as a bit of a positive effect, which results from the unwinding of estimates of prior year's that’s where it’s a bit less than 1 percentage points or if you allow for this or strip this out, the capital generated in 2016 is a bit closer to 11 percentage points. That is actually quite close to what we've published for 2015.

There is no particular one-off in this either positive or negative, which would have a significant impact either way. Model changes we have shown separately.

So, this is sensitive obviously to claims experience and sensitive to the profitability of new business that means renewals and new business written on the Life side, both volume and profitability will drive this up or down, but as of today this - as I said there is nothing unusual in this which would let us to think that this is either much higher or much lower than what you should expect.

So, just a follow up, is there an easier, is there a likely easier rule of thumb to get from your ROE to what that number looks like or is that just one for the actuaries?

I’m afraid it’s the latter. The accounting mechanisms between IFRS and solvency 2 are very different, particularly on the Life side.

I mean this is the same story as on the MCV. Under solvency 2, profitability of the new business is fully recognized as value in the year when the business is written and then your very difficult mechanics of unwinding of discount in compared to IFRS where the profitability of the business is really spread out over the lifetime of the treaties.

So, I’m afraid there is no such easy reconciliation. It’s probably easier to compare it to MCB, particularly on the Life side where we pretty much use this solvency to methodology already.

That's great. Really appreciate [indiscernible], fantastic.

Thank you.

Hi thanks. It's Xin Mei Wang from Morgan Stanley.

Two questions please. First is on the extra solvency relief from legal entity restructuring, can you just remind us of how you think about the use for that in terms of the priorities for acceleration growth that in risk profile and then thinking about the dividend and the potential pipeline, it is my first question.

My second question is, on the reserves. So, you mentioned that the margin above best estimate on reserves on a similar level to 2016, is that on an absolute basis or on a percentage term basis?

And then just considering the release of reserves in 2Q, could you just talk through what actions replenish the buffer to remain the same with the [indiscernible] continued low inflation in the year or where there other actions as well? Thank you.

Thank you very much and we will ask Mark maybe to talk about the consequences and the merger of the three SEs.

Just to give you a status update on where we are. So the project itself is on track.

It’s definitely very complex. We are dealing with 48 jurisdictions at the present time and the creation of 10 branches.

So this is taking significant time to go through. Obviously, we are trying to protect and maintain the business franchise and the continuity for our clients throughout this process.

So, we envision a completion of the project, probably something around early 2019. One of the constraints that’s come out of this is that essentially you would need to have a fiscal year beginning after a merger effective January 1 of a given year.

So, I would expect this to crystallize or finalize in early 2019. I do conform the 200 million that we spoke about last IR Day, those are the projected solvency capital benefits.

Given the fact that this is a perspective transaction, but we will still go through the decision tree that we outlined on IR Day with respect to excess capital. So again we redeployed in the business, given that it is a one time I don't think it would enter the discussion of the regular dividend that we could certainly discuss the share buyback question that we raised during IR Day with respect to this.

The second question was - as you know it is a margin above business might recall.

I think the total amount of technical reserves has increased slightly, but not in proportion that really changes, so I would say that it is both valid in absolute and in relative to your question. And as far as the measures there is no particular measures, it is just showing that the prior year’s are showing positive developments and that there is a kind of regeneration of margin, which is like a natural mechanism.

We start with very prudent reserving in general and our underwriting years are developing favorably and recreating margin, which means that it naturally will replenish it.

Okay, great, thank you.

Almost magic. Next question.

All right thank you for taking my question. In-Yong Hwang from Goldman Sachs.

Yes, two questions, so firstly on the buyback again, I’m just thinking about the timing, I think obviously that’s up to the Board of Directors, but actually you mentioned that Monte Carlo is the time where you will have a clear deal where the growth trajectory is going. So is that the time we should expect to more clearer deal of what the buyback is going to look like?

That is my first question. My second question is on the running yield, there was a strong pickup in the fourth quarter 22.6 cents from 1.8% the quarter therefore, appreciate the interest rate environment is more favorable and you had a much high reinvestment rate, but just wondering if there is any one-of in the 3.2%?

Thank you.

Share buyback again Mark.

On the buyback, with respect to the timing, we gave guidance today for the next 24 months. It could happen at any time.

I think there is a couple of variables that we’re waiting to clarify. Victor mentioned one of them in his speech, which is the growth possibilities for the P&C division.

We referenced 3%, 8% scenarios, and everything in between, last IR Day. So this is something where we said, we probably need a year to sort that out and clarify it.

As I mentioned before, one of the decision tree points is to try to obviously produce secretive growth in the group and we want to self-finance that where possible, but the excess capital decision is something that could happen at any point-in-time and I would not exclude IR.

On the earning yield in terms of the equation, so the published earning yield in Q3 was 1.8 and the previous one in Q4 was 3.2, so that’s an increase of 30 basis points. If I take into account one-offs in Q3 that’s almost 8 basis points to the normalized earning yield in Q3 and with growth 1.7%.

If I look at Q4, we have positive one-off links to inflation and some dividends for 11 basis points and the effect of reinvestment program we started since the launch of Vision in Action for the summer, the full effects of Q3 is, it is equal to 12 basis points that is recurring in the recurring. The normalized yield excluding one-off and the opportunity in Q4 is 4.1%.

That’s why we increased our expectation or the income yield on the earning yield for the full year 2017 at 3.1% and 3.2%.

Great got it. Thank you very much.

Hello it’s Frank from Deutsche Bank, I have two questions, my first question is on the 12 percentage points, again capital generation, can you break it further down into the underlying drivers. So, obviously there have been effect from new business value, but also there are, is it a fact from the growth overall within your portfolio and could you also separate the unwinding of the existing business?

And my second question is, on potential benefit, which you pointed through from the collateral agreement, could you give some more information on this please?

Maybe this time by Frieder.

On the operating experience, new business is a significant share in this and I would say, in the range of about 0.5, may be a bit more and then unwinding and claims experience and assumption changes and so on the remainder. We don't disclose the exact split at this point, but in line with developing good practice in the market, we might do this in the future then hopefully give you standardized categories, which are comparable to our peers.

The growth of the underlying business has shown separately the SCR increase of about 200 million is reflective of the growth of the business during 2016 and the increase in risk exposure.

May be Mark on the benefits of the different US and EU agreement.

The new agreement that’s come about in the last days of the Obama administration is certainly a welcome development for SCOR for the industry, but we don't expect any meaningful benefits at least in the short-run. There is numerous administrative or legislative hurdles that have to be overcome in the United States both at the state-level and congressional level.

Some of this will clarify itself as the Trump administration makes it clear what they wish to pursue with this agreement. The agreement is perspective, so it doesn't impact our existing collateral arrangements that we have on the business, which are primarily on the Life side, but if it does come into play, it would have some benefits for us on a going forward basis.

And the timeframe that we would estimate is to be anywhere from 3 years to 5 years assuming this gets all of the legislative approval that you would anticipate in a best case scenario.

It is a positive development and as SCOR supports this agreement it was - we have been fighting for years and years and years and so even it’s late date, it’s been welcome. Next question.

Thank you.

Hello. Shall I go ahead.

This is Vinit from Mediobanca. Sorry.

Just one question on the 2.5% reinvestment yield for Francois, is it a fair understanding that even though there was a pause of rebalancing in November, this pickup has happened because of some of the rebalancing actions taken in the third quarter itself, is that how we should perceive it. Because I remember you had invested about 1 billion or so into US corporate debt already in the end of 3Q.

So, if you can just clarify a little bit more about this 2.5%. And I have one clarification please on the legal entity merger, 200 million benefits if I may, I seem to think that to really get that money deployed, the criteria was not really the completion, but was more understanding with the regulator or agreement with regulators, has there been any change to that philosophy or is it still the same in 2019 as when we should really look for it?

Thank you.

You need to come back on your questions. Our definition on the reinvestment rate is consistent quarter after quarter.

So this is the marginal reinvestment side i.e. the marginal market field on all yielding asset classes.

So, mostly fixed income loans and the real estate and that has taken the last day of the quarter, according to the asset allocation in our portfolio. So it means it will range that the last day of December 1 euro or 1 dollar in the portfolio is the same as allocation.

We reinvested at 2.5%. So this is a really good news.

The second good news is that this reinvestment rate is well above the book yield and that’s why we are optimistic on the fact that the running yield of the income yield will improve in the future.

And is this pickup from the 3Q, simply, I mean I'm sure some of it is market move, but is it a large part market-driven or larger part from asset reallocation.

You have two types of course in the move. The fact that market condition are much better, and the fact that we slightly changed the asset allocation.

I you cannot compare these are just between Q3 and Q4, so the 1.9 reinvestment rate at the end of Q3 into 2.5. The asset allocation effect is almost marginal due to the course we've put in place in rebalancing strategy in November and December.

So, most of the effect here that you see between Q3 and Q4 is linked to the improvement of the market conditions.

So as you release more, this should further pickup than presumably, if market is flat?

If we continue to release or rebalance the portfolio, especially in favor of credit as illustrated in Vision in Action, at constant market environment this reinvestment rate should increase, due to the balancing effect.

Thank you.

Again on the question of merger.

Vinit on the legal entity merger, this is something as I mentioned before that is very complex on a regulatory basis, so the international nature of the restructuring requires many countries to sign off and it requires not just to sign off on closing legal entities, but creating new branches to make sure that we do not impact the business that is fundamental to provide a continuity for the clients of both Life and P&C, so that is something that is very complex and is subject to regulatory approval. Once we have that certainty and I think it is something that is likely to be a lot more clear later in 2018, then we will be able to give you a more firm update, but I do expect this thing to complete in early 2019.

The only difference, I would say from the discussion we had at the IR day last year is really the increasing complexity of transferring the portfolios, creating the branches and the numerous jurisdictions that are affected that’s probably little bit more than what we had expected last September.

But this uncertainty is now our well understood I presume?

I’m sorry, could you repeat that?

And in fact it became slightly more complex in the last 3, 4 months.

Yes, I do expect - the feasibility is clear, it is more of a timing issue because there are so many incremental steps that need to happen with the transferring of portfolios, creation of new legal entities, I can't see why anyone would be against this on a local country level. It is more process, it takes time.

Thank you, Mark.

Hi it’s Anasuya. Sorry, I was on mute.

Thanks for taking my question, my first one is just a follow-up actually on the investment return, could you remind us where do you want to take the duration to, and with more rebalancing could you get to the 3.2% even if interest rates where to stay where they are today? And the second one was, going back to the 200 million potential from the excess capital, not from the internal restructuring, but from the solvency ratio, sorry to come back to it, but I just want to try and understand a bit more about what could attract you to the alternative.

For example where could you increase your risk profile and where it looks attractive at this point in time and is there any M&A you might consider? Thank you.

Mark you want to pick up the last question.

Sure. On the excess capital question, we do have different growth synergies in P&C, 3%, 8% that’s quite a wide range, so the principal use of potential capital would come from the P&C division.

We have fairly stable with the Life plans that’s coming along very nicely, and then on the asset side we do have some room still to redeploy the resources to increase the capital intensity, but clearly the major parties on the PMC side. With respect to M&A there is nothing on the horizon right now.

We did state to you during the IR Day that’s an option for us, but it’s not something, our plan is purely organic, it is not something we are actively pursuing at this time.

May I add one point, I mean. You talked about change of risk appetite, risk profile, we have no intention to change the risk profile of the Group, it has been set, it has been announced since the IR Day, we have already these drivers of basic limit and it is absolute framework that we respect.

So, the idea is different, it is within the framework, of course we can saturate certain limits on those. So it is a situation where we have no intention to change risk profile, but we are looking for sources of course within this framework that could sometimes reach the limit of the risk appetite as set.

It is a very important statement when we see the risk profile of this Group is for three years, it is well announced, it is measured and we stick to it during the period as a plan. We navigate always [indiscernible].

Another two question on the investment, so the first one on duration, so we have relatively short on the asset side compared to the liability, which is good again in the context of increasing interest rate. We are more apparent today to take duration and to reduce duration gap within the USD denominated portfolio where interest rates are increasing.

So we do it very progressively, you have an niche session of what we did. When we reinvest today, we reinvest at longer maturity, the average duration of the program we implemented in the first few days of January on US corporate bonds as an average duration of close to 8 shares and very look and average yield of 3.6%.

The current duration of USD denominated portfolio is 5.1 years. As far as the euro denominated portfolio is concerned today, we are waiting a little bit, the duration is much lower and we tend to privilege loans, which is valuable height asset classes to which we will benefit in the future when the euro rates are going to increase.

On your second point, is the 3.2 achievable, I would say yes. And that’s the illustration on Slide 17.

With the improvement of the income yield, we have a few good news here that are sustainable and if non-yielding asset classes such as the real estate for other investments or equities do perform well, we can maintain our budgets of realized gains in 2017 and we could be in the path of 0.72 [ph] range for 2017, but also I think this is sustainable. In the current improved market condition it could be sustainable as well for 2018 and 2019.

All right great. Thank you very much.

Hi there, Jonny Urwin from UBS. Just two questions from me.

Thank you. So firstly on the redeployment of liquidity and the investment portfolio, just how should we be thinking about the pace of that, I mean, you pull us to November given the uncertainty around the US selection, obviously we've got few important elections in Europe coming up, so how are you thinking about navigating that environment?

Secondly, just on the source to ratio and the target range, the optimal target range is 185 to 220, I mean you obviously are now about that and there is a bit of excess capital over above the 220, I mean should we really be thinking about that target range as just being 220. I mean because obviously you could have done a share buyback today of 200 million, especially given the line of sight on the SE structure, sort of surplus, and that would have, you still would have been well, you know towards the top end of that range and relatively insensitive to certain macroeconomic fluctuations.

How should we think about that? Thank you.

The deployment of liquidity as you mentioned it, we had it for few weeks, the rebalancing strategy that was very common in Q3, and that was guaranteed end of November and December. In the first few days of January, we invested 1.7% of the portfolio, which means that liquidity today has reduced to 9 points and you should still expect this developed activity to reduced to the target level of five points, but rather next few months and quarters and at the end of the year, what is still again is also an ability for recurring financial cash flows on the portfolio on top of positive operating cash flows coming the two division, and this is illustrated on Slide 2017.

We are almost 2% or 3% of the portfolio that is maturing each quarter over the next two years, which means that we can capture all the increase if market conditions are improving in the future.

Mark?

On the optimal zone, so we do have the optimal zone of 185% to 220% and we do see that when we are inside there we are exactly where we want to be, 185% I think is not something you are going to see us pursue at something that is there in case of a shock [indiscernible] extreme volatility from external factors, but 220% I think that is probably a little bit too conservative. We would certainly want to be above 200%.

With respect to the solvency ratio and it could be anywhere between the 200 and the 220. You have to remember there is volatility that can occur on a quarterly basis on an annual basis.

And we have seen swings even from something like credit spreads from a year ago where we had 10 movement of 10 solvency ratio points within one quarter that never manifested itself in the March 31 figures because the market corrected itself, but that type of volatility is quite apparent. More importantly, we do view capital management, I think on a longer view than just one quarter.

So, we look at the growth potential of the franchises in Life and P&C over a longer term period, a 3 year to 5 year period even in many respects. So, it’s a nice place to be, and I think the key message today is the underlying fundamentals of the Group solvency and its profitability are very strong.

And that’s why we are envisioning share buybacks in the near future.

Okay, thank you.

Sorry, I would like just - the objective is not to be at 220%. We said that we are above 220, with really product capital, but the objective is to be within the optimal range so 185% to 220% and we feel comfortable if we are above 200%, so it is just to say that you can measure the excess capital and the difference between 225% and 220% is probably billion, the objective is not to be at 220%, I mean we are fine with 2210 or 215 or whatever, so it is just an important statement just to say that we just see marginally say something.

Very important point, which was said by Mark, even three times Mark? We want to self finance [indiscernible] Group.

It is very important for us. I mean therefore there are some question marks about the growth rate, just because markets are developing right now.

We said at last September and we are extremely blunt, we could see an acceleration of the P&C business since the - but we have margin to finance development of the acceleration of the P&C business and to share buybacks. So it’s not a question about, it is or we can do both, now the timing will certainly depend when we have more information about the - let’s say the development of the P&C business in the coming months, to what markets is extremely important to understand how we do.

We do capital management and we are in a good position because we can make capital. Next question please.

Good morning. I have got two questions.

The first one is on the life and health re-business, Paulo could you comment a bit more on the 2017 outlook, obviously 2016 has been very strong in terms of premium and margins maybe could you shed some line on how new business margins have trended into 2016 and what’s the outlook for 2017, and basically what you are expecting in terms of business trends, second question will be maybe for Mark, have you made your mind regarding what is the kind of additional disclosure, how can I get with SFCR and QFT’s in the coming months, anything that you would like to draw our attention to? And then maybe one last financial question on the sci-fi regulation, any specific, not explicit, but the implicit capital buffer of left in case of this implementation, which potentially could be removed at some stage?

Thank you.

What I said is a probability for SCOR to be qualified as systematically relevant or important is extremely remote. That’s a good news because if you are considered as potentially systemic you will have two post additional reserves, you might have much more reporting to do and so it is an extreme positive news, which is not yet confirmed, but it seems it’s probably for SCOR to be belonging to this category is extremely weak today.

So, for those, for what we say is we have been arguing for years about the fact that reinsurance industry is not systemic, but anyways SCOR is not systemic, so according to the news that we have and the information that we gather, it seems that this debate is backing fuel right now and it was a hot issue a few years ago. It seems that the regulatory pendulum is swinging in those direction right now and we have been waiting for four years to see the least of systemically reinsurers and the rest has not been released, so then you have seen also - pertains to US, I would say important debate about system visit [indiscernible] some declaration about the new NAIC Chairman against system visit in insurance is certainly something to note.

So what I'm saying is, we didn't put any reserves system intensity because we don't believe in the story, but at the meantime surprised that we are not likely to be considered systemic means that we keep positive degrees of freedom we have, especially because we would not have to post additional reserves or to have additional reporting requirements. It’s very good news, it’s not a news by the way, it’s a pretty good development I would say at this stage.

Did I answer your question or not.

Yes indeed.

On Life we have - Paolo is so happy to have a question on Life, he is smiling and [indiscernible].

We had a very good 2016 as I said both geographies and product lines, protection market and the production line of business were up overall 6%, they are very good underlying trends, some of our key core franchises that we are investing in major pacific mainland China was up 19%. You look at and Northern Asia, Japan and Korea were up 10%, I will say Asia also we did success, in the Americas, we had Canada up 16%.

Latin America made a big jump got to around 200 million in premium app over 50%, and even some traditional markets like Iberia where we had have a smaller protection business that was up about 13%. So the growth on the protection side was very well spread globally.

Obviously, longevity was up significant. We ended up the year at 700 million.

On a constant exchange rate that was about adding about 200 million with the strong Q4. So finished the year, very happy where we are and very happy with the trends we're seeing.

I think we’re going into 2017 with a strong level of comfort. We keep deploying resources in Asia-Pacific, the market is being very buoyant in the region for Life protection business.

We still see a good trend on the longevity market, particularly in the UK and I think we will keep benefiting by the diversifying footprint that we have on smaller markets like in 2016. In terms of margin, we were writing well above our ROE functions.

So, we have business coming in well above the overall 10% ROE assumption that have been our pricing models. So, we're very comfortable where we see the margin coming in and on top of that the in-force business has been doing very well in terms of results, but overall we feel confident going into - we feel confident going into 2017.

Any more precise number in terms of growth premium expectations for 2017 and anything to have in mind regarding the change in the business mix regarding the technical margins of 7.0% for 2017?

At this point, we don't expect the mix to alter that number. Unless we find some sizable transactions that are very profitable per se, but at this point we have not been in the pipeline.

So, we don't see mix impacting that, in terms of growth expectations there is assumptions that we made on the Vision in Action was the 5% to 6%. The way we're looking now in the outlook we think we're going to beat that, we're going to be above that assumption in 2017, as since the beginning of the year it is tough to say by how much, but we are definitely going to be either the higher end of that range or slightly above.

Okay thanks.

Hello. Can you hear me?

Yes sir.

Hello. Okay.

Thank you very much. Congratulations on a good set of results.

I’ve got two questions. First is on the sensitivity of solvency 2 ratio with respect to interest rate movements, I see that has gone up to about 20 percentage points versus 15 percentage points last year and maybe that is largely attributable to redeployment of liquidity, so the question is would this increased sensitivity act as an impediment to further re-risking the balance sheet?

That's first question, the second is really on the development around the issue with the CCR, can you update us with your latest thoughts around that? Thank you.

On the sensitivity 2 interest rates, this is a function of both the sensitivity of our SCR and our own funds, this is obviously ratio sensitivity. And mechanically, because you are looking at a ratio of 2 to 1 and the SCR is denominated the leveraged from the SCR sensitivity is quite bigger and also the SCR in itself is more sensitive to interest rates in our own funds.

So the bulk of the interest rate sensitivity actually comes from our capital requirements. It’s gone up because of a number of independent factors, some of the model changes, which you might have had on sequential impact on interest rate sensitivity is, we’ve improved the methodology to compute the sensitivities in itself and then there have been also a few secondary impacts of financial market movements, particular things like strengthening of the US dollar and so forth.

Okay.

May I ask [indiscernible] where we are obviously [indiscernible]?

Regarding CCR you may have seen that CCR has spun off its commercial activities in the new entity called CCRE and you may also have observed that contrary to the CCR itself, CCRE does not benefit from the same rating as the sovereign rating of France, so we think that this development is a positive development for fair competition between reinsurers. The other side of this case was the opening up of the French at the reinsurance markets, so on that particular about to file a recourse before the call to first instance of the European Union with a view to obtaining this opening up of this markets, but I would like to mention the fact that in our strategic plan vision in action there is no assumption that this market would open up, so it can only be a plus if it does, but it’s not as all factored in our strategic plan.

Thank you [indiscernible].

Okay, thank you very much for the color.

It’s a question of principle. CCR is a question of principle.

All would say, you want to operate in a market, you have to - or do that in a fair way [indiscernible] but it is not a profile, it is true around the world. And we have a long to a few association such as the Global Reinsurance Firm and we with the same position, if the government wants to intervene on market, he has to do that in a fair way.

Are there still some additional questions?

Thank you. Just reminds me to say, thank you very much for joining the call.

Bye, bye.