SCOR launches a EUR200 million nat cat facility

SCOR announces an innovative and efficient three-year contingent capital facility. This takes the form of a guaranteed equity line, providing the Group with EUR200 million worth of coverage in case of extreme natural catastrophe or life events.

Following the authorisation granted by SCOR’s shareholders in April 2013, SCOR has arranged a new contingent capital equity line with UBS. This equity line facility will replace, as of January 1, 2014, the current contingent capital facilities, which come to an end on December 31, 2013. Under this new EUR200 million arrangement, SCOR raises its protection versus the existing contingent capital facility by EUR50 million.

This contingent capital solution is innovative in that protection would be triggered in case of extreme life events, as well as natural catastrophe events included within the last facility. It is calibrated to protect SCOR’s solvency, in the case of such events, from deteriorating below the “Optimal” zone as defined in the “Optimal Dynamics” strategic plan.

For this new facility SCOR pays an annual commission to UBS of 0.10 percent, which makes it highly cost-efficient relative to the previous contingent capital arrangements and relative to other forms of capital. In addition, SCOR has substantially lowered the probability of the trigger events compared to its first structure in 2010 (by significantly raising the applicable trigger thresholds), which also significantly lowers the probability-weighted costs to SCOR and its shareholders.