SCH2017_DRF_EN_Livre.indb

1 Overview of the Group’s strategy, markets and businesses Organizational simplicity and efficiency

Transport insurance A new insurance program covering all risks of loss or damage to goods while in transit, including intragroup shipments, was put in place as from January 1, 2017. Erection all risk insurance The erection all risk insurance program providing cover for damage to work and equipment for projects taking place at our clients’ premises was continued in 2017. Other risks In addition, Schneider Electric has taken out specific cover in response to certain local conditions, regulations or the requirements of certain risks, projects and businesses.

Self-insurance To optimize costs, Schneider Electric self-insures certain high- frequency/low-severity risks through 2 captive insurance companies: E a captive company based in Luxembourg provides Property Damage and Transport reinsurance worldwide as well as Liability reinsurance outside the USA and Canada. The total amount retained is capped at EUR20 million per year; E for the entities located in the USA and Canada, a captive insurance company based in Vermont (USA) is used to standardize deductibles for civil liability, workers’ compensation and automobile liability. These retentions range fromUSD1 million to USD5 million per claim, depending on the risk. An actuary validates the provisions recorded by the captive company each year. The cost of self-insured claims is not material at the Group level. Cost of insurance programs The cost (including tax) of the Group’s main global insurance programs, excluding premiums paid to captives, totaled around EUR20 million in 2017.

2017 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC

55