R+V Versicherung AG Annual Report

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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. 4 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.
However, the significant increase in private health insurance also made an encouraging contribution to the growth of the entire sector. This means that the insurance industry is still enjoying above-average growth rates, even though the potential for growth has steadily contracted in recent years. The premium income recorded in all insurance classes is offset by payments or claims expenses of €158.7 billion, an increase of 6.2%. At 10.2%, the increase in the number of property and casualty insurance claims was highest. Natural disasters and a concentration of large claims in the past year had a dramatic effect on property insurance in particular. The flood of the century in the new federal German states alone depressed earnings by €1.8 billion. In addition, the stock market slump has greatly reduced the possibility of offsetting technical losses with positive investment income. Encouraging developments in life and health insurance The following trends and prospects are emerging in the most important insurance classes: life insurance is demonstrating strong growth in new business, solid premium growth, a definite upward trend in total policies outstanding and increasing benefit payments. New business developed very positively, with around 10.2 million new policies sold in 2002, an increase of 20.4%. Pension insurance rocketed with growth of 125%, or 3.3 million new policies. 5 Life insurers saw their gross premium income increase by 4.3% to €65.1 billion. Their payments rose to a total of €85.7 billion, of which €55.1 billion went directly to customers and €30.6 billion to benefit reserves. This extremely satisfactory result shows that modern, up-to-date versions of traditional life insurance are a “safe bet” for retirement provision in times of uncertain stock market development dominated by substantial price losses. On top of this, the new subsidization provided for by the Altersvermögensgesetz (German Retirement Savings Act) created an additional impetus, with over 2.9 million retirement pension policies being sold under this Act. Private health insurance, the second-largest type of personal insurance, also recorded above-average growth for the sector in 2002 with an increase in premium income of 6.4% to €23.1 billion. Comprehensive and additional health insurance accounted for €21.1 billion, rising 6.8%, and compulsory long-term care insurance for €2.0 billion, up 2.3%. The strong increase in premium income is principally due to the large number of new members, with approximately 221,000 people switching from public to private health insurance. In line with the general trend in the healthcare sector, expenses for benefits paid to holders of health and compulsory long-term care insurance policies also rose in the private health insurance sector by 5.5% to €15.2 billion.
Page 1 and 2: 2002 R+V Versicherung AG Annual Rep
Page 3: Content Management Report 4 Proposa
Page 7 and 8: Developments on the international r
Page 9 and 10: However, the events of September 11
Page 11 and 12: As a result of the relatively poor
Page 13 and 14: Business development and position o
Page 15 and 16: Liability business developed negati
Page 17 and 18: Including interest on deposits and
Page 19 and 20: In terms of sums insured, the portf
Page 21 and 22: Overall, gross premium income decli
Page 23 and 24: Major claim events such as ”Petro
Page 25 and 26: Shareholder structure As of the bal
Page 27 and 28: Investment risks: In order to creat
Page 29: Significant events and outlook The
Page 32 and 33: Proposal on the Appropriation of Pr
Page 34 and 35: Balance Sheet as of December 31, 20
Page 36 and 37: Equity and liabilities 36 2002 2001
Page 38 and 39: Income Statement for the period fro
Page 40 and 41: 40 2002 2001 € € € € 8. Ext
Page 42 and 43: Premiums and discounts were amortiz
Page 44 and 45: List of Shareholdings Shares in aff
Page 46 and 47: Notes to the Balance Sheet Statemen
Page 48 and 49: Assets C. Investments Present value
Page 50 and 51: Notes to the Income Statement I. 1
Page 52 and 53: Dr. Jürgen Förterer Chairman Wolf
Page 54 and 55:
Auditors’ Report We have audited
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R+V Versicherung AG Annual Report

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