R+V Versicherung AG Annual Report

Management Report
R+V Versicherung AG acts as both the
parent company of the R+V Group and the
reinsurer for the Group’s direct insurance
companies. R+V Versicherung AG also
operates independently on the international
reinsurance market. The reinsurance business
is primarily run from the head office in
Wiesbaden, Germany. The Group’s interests
in Southeast Asia are managed by its
Singapore branch, which was established
in 1997.
R+V Versicherung AG’s 2002 annual
financial statements include all reinsurance
business assumed from the R+V Group
companies in the 2002 calendar year. In
contrast, reporting of the majority of business
assumed from other domestic and
foreign cedents is deferred by one year and
therefore relates to calendar year 2001.
Investment income as well as all other
income and expenses relate to calendar
year 2002.
Development of the economy as a whole
and the German insurance sector
Developments in economic growth and
employment, income and pensions gave
little cause for optimism. The silver lining
discernible on the economic horizon in
early 2002 was soon replaced with a badweather
front. With the increase in its real
gross domestic product barely exceeding
0.2% in 2002, Germany had the lowest
growth rate in the whole of the EU. There is
no turnaround in sight for the labor market,
and the ability of the state to financial
public social security systems is the subject
of ongoing controversy. The national debt
rose continuously last year, placing further
restrictions on public services, especially
in the social sector. Tax increases forced
private households to cut back on consumption,
while the investment climate
for companies deteriorated.
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The dramatic slump on the global capital
markets further accelerated the economic
downturn. The stock market boom of the
1990s has definitely come to an end, and
the bear market visibly impacted the results
of the entire financial services sector.
This less than encouraging economic situation
was matched by the political climate.
Terrorist attacks worldwide, such as those
in Jerba and Bali, created an atmosphere
of tension. The explosive situation in the
Middle East and the threat of a military
conflict between the US and Iraq created
uncertainty and put a considerable damper
on economic activity.
As if all this weren’t enough, devastating
natural disasters plagued people around the
world in ever-shorter intervals. August’s
flooding in the new federal German states
robbed many people of their livelihood.
The Aufbau Ost program to rebuild Eastern
Germany, which had just been concluded,
will have to start all over again in these
regions.
Sectoral growth of 4.1% despite
numerous adversities
The weak economy, the stock market
slump and the results of the natural
disasters are also mirrored in the development
of the insurance sector during 2002.
However, because insurance provides a
sense of stability and security in times of
turmoil, the industry was able to maintain
its growth course despite all adversities and
risks: the premium income collected by
direct insurers grew by 4.1% to €141.0
billion. As in the previous year, this positive
growth was largely driven by life insurance.