R+V Versicherung AG Annual Report

Liability business developed negatively,
generating a loss in the fiscal year after
a profit in the previous year.
Accident insurance was unable to match
the prior year’s satisfactory level of earnings,
closing the year under review with
a loss.
Fire insurance recorded the highest loss of
the property insurance classes. In addition
to the costs of the large claim for the World
Trade Center, earnings in this insurance
class were impacted by a series of other
major claim events from natural disasters
and large industrial claims. In addition,
a departure was made from the usual
accounting practice of deferral by one year
in order to set up provisions for the flood
damage in August 2002 and the damage
from storm “Jeanette” on October 26/27,
2002; this had a negative impact on the
result for the year under review.
Engineering insurance continued its
negative development of recent years.
A significant drop in the loss recorded in
the previous year was offset by a corresponding
increase during the year under
review.
After the loss recorded in the previous year
due to the provisions set up for the events
of September 11, 2001 in New York, the
loss generated by aviation insurance was
substantially reduced in the fiscal year.
The situation in marine insurance remained
unsatisfactory. Insufficient rate levels and
increased net loss ratios led to another
technical loss in the year under review.
The overall loss recorded by the remaining
insurance classes in the year under review
was considerably higher than in the previous
year. This development is due to a
deterioration in the credit, bonds, livestock
and health insurance classes. Following a
substantial loss in the previous year, the
hail/crop insurance class recorded a profit
in the year under review.
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In contrast, life insurance recorded a technical
surplus that exceeded the prior-year
profit. After a slight surplus in the previous
year, health insurance closed the year with
a loss.
Overall, reinsurance business ended the
fiscal year with a loss of €81.6 million
(previous year: €–33.3 million) before
withdrawals from the equalization provision
and similar provisions.
As a result of improved net loss ratios in the
year under review, allocations were made to
the equalization provision in burglary and
theft, aviation/aerospace and legal insurance.
Allocations were also made in general
accident, storm and tempest and construction
services despite the deterioration of
the net loss ratios in these classes, whereas
the earnings situation in the other classes
led to withdrawals. All in all, withdrawals of
€17.4 million (previous year: allocations of
€10.9 million) were made from the equalization
provision and similar provisions.
After withdrawals from the equalization provision
and similar provisions, the technical
loss amounted to €64.2 million (previous
year: €–44.2 million).
Investment portfolio
The development of the Company’s investments
in the past fiscal year was dominated
by the reorganization of the R+V Group’s
shareholdings (for more information see
page 25). The restructuring and the revaluations
related to this in some cases played
a major role in the substantial increase in
the investment portfolio of €776.1 million,
or 56.7%, to €2,145.3 million. Shares in
affiliated companies still accounted for
a majority of holdings, increasing from
56.1% to 67.6% as a consequence of the
restructuring measures.