Group Annual Report 2012 - ERGO Versicherungsgruppe AG

2012 

Group Annual Report

Management Report 

Overview of ERGO Insurance Group 

2012 2011 Change previous 

year (%) 

Total premium income € million 18,562 20,270 − 8.4 

Gross premiums written € million 17,091 18,519 − 7.7 

Expenses for claims and benefits (gross) € million 17,556 17,369 1.1 

Investment result € million 5,262 4,116 27.8 

Operating result € million 951 806 17.9 

Consolidated result € million 289 349 − 17.2 

Investments € million 125,390 117,309 6.9 

Technical provisions (net) € million 120,859 113,977 6.0 

Equity € million 4,587 3,827 19.9 

Full-time representatives 17,862 19,087 − 6.4 

Salaried employees 29,768 31,311 − 4.9 

ERGO is one of the major insurance groups in Germany 

and Europe. We have a presence in more than 30 countries 

worldwide, but the focus of our activities is on the European 

and Asian regions. ERGO offers a broad range in 

insurance, pension provision and services, and is one 

of the leading insurers across all segments in its home 

market of Germany. Around 48,000 people work for our 

Group, either as salaried employees or as full-time selfemployed 

sales partners. In 2012, premiums amounted to 

over € 18 billion and insurance benefits for our customers 

accounted for more than € 17 billion. 

Our customers determine the way we operate. ERGO is strictly 

geared towards the wishes and needs of its customers, 

and intends to improve this still further by pursuing a 

close dialogue with them. We are implementing our claim 

“To insure is to understand” by providing advice and 

products which meet the needs of our customers as well 

as understanding and picking up on customers’ personal 

concerns. This is enhanced by a clear and understandable 

communication, innovative services and swift support in 

the event of damage or loss. 

Our customers can choose which form of contact with 

ERGO suits them best, as we have the right sales channel 

for every customer: Self-employed insurance sales 

partners, staff working in direct sales, as well as insurance 

brokers and strong cooperation partners – both in Germany 

and abroad – respond to the needs of private and corporate 

customers alike. We maintain partnerships with the 

major European bank UniCredit Group and other banks, 

both in Germany as well as in various European countries. 

ERGO is part of Munich Re, one of the leading global reinsurers 

and risk carriers. Within Munich Re, ERGO is the 

specialist for primary insurance, i. e. for insuring private and 

corporate customers directly, both in Germany and abroad. 

The group’s investments of € 214 billion, of which € 125 billion 

is accounted for by ERGO, are managed primarily by the 

joint asset management and fund company MEAG.

Annual Report 2012 

ERGO Insurance Group 

Group Annual Report

Contents 

3 Letter by the Chairman of the Board of Management 

6 Report of the Supervisory Board on the 2012 financial year 


10 The ERGO Insurance Group 

14 The ERGO Insurance Group – Governing bodies 

16 Business environment 

19 Business performance 

23 Assets and financial position 

27 Other success factors 

31 Risk report 

42 Opportunities report 

44 Prospects 

Consolidated 

Financial Statements 48 Consolidated balance sheet as at 31 December 2012 

50 Consolidated income statement for the financial year 2012 

51 Statement of recognised income and expense 

52 Group statement of changes in equity 

54 Consolidated cash flow statement for the financial year 2012 

55 Principles of presentation and consolidation 

74 Notes to the consolidated balance sheet – assets 

95 Notes to the consolidated balance sheet – equity and liabilities 

110 Notes to the consolidated income statement 

118 Disclosures on risks from insurance contracts and financial 

instruments 

130 Other information 

136 List of shareholdings as at 31 December 2012 in accordance with 

Section 313 para. 2 of the German Commercial Code (HGB) 

148 Auditor’s report



3 

Letter by the Chairman of 

the Board of Management 

Dear Readers, 

“Rescue routine” was the German word of the year 2012. This means that the top spot has 

been claimed for the third time in five years by a term reflecting the turbulence on the 

capital markets, following “financial crisis” in 2008 and “stress test” in 2011. This shows 

how much the unpredictability of the markets continues to affect our everyday lives. The 

effects of the financial and national debt crises for companies and citizens are becoming 

ever clearer. This makes special demands on us not only in the management of our investments 

but also increasingly in our core business as an insurer. 

Our major investment portfolio still features investments that yield higher rates of return 

than can currently be achieved. In addition, we took early action to hedge against the risk 

of falling interest rates which will enable us to hold out for a long time in a climate where 

low interest rates prevail. After all, we make promises of benefits to customers that often 

last a lifetime, so we have to be able to make good on our promises even if interest rates 

remain extremely low. 

Dr. Torsten Oletzky 

Chairman of the Board of Management 

ERGO Versicherungsgruppe AG 

As a result, sustainable security takes precedence over returns on investment. This is 

why we have continued to lower policyholders’ bonuses for new German life insurance 

contracts. And our new unisex tariffs for health insurance feature lower technical interest 

rates. As lower capital yields are already taken into account during the calculation process, 

premium rates are higher as a result. 

For many customers, life insurance remains the best route to pursue in terms of private 

old-age provision. However, due to low interest rates, they are no longer able to fulfil 

customer expectations as they once did. Annual guarantees are expensive and have an 

adverse impact on the rate of return. This is why we will provide new product concepts in 

the future. Our guarantees have the main task to fulfil our customers’ demands in terms 

of planning security for their old age. At the same time, we will make our new products 

more flexible so that they adapt more successfully to the different stages in a person’s life. 

The new product generation will be launched this year. 

The fact that we have lowered the conditions of single-premium life insurance policies 

out of prudence already for 2012 has affected our new business. A lower life insurance 

business and sales of daughter companies in the previous year led to a decrease of 8.4% 

in total premium income, down to € 18.6 billion (20.3 bn). By contrast, the operating result 

was up significantly by 17.9% to € 951 million (806 m). The investment result recorded a



Letter by the Chairman of 4 


major increase to € 5.3 billion (4.1 bn), while net returns rose from 3.4% to 4.1%. One of the 

major reasons for this increase was the cessation of the adverse effects of the previous 

year. The combined ratio of 95.8 (94.4)% in the German non-life segment did not live up 

to our high demands. However, at 100.5 (105.1)%, the combined ratio for international 

business developed favourably. Overall, the operating performance corresponded to our 

expectations. 

At € 417 million, the consolidated result before provisions for restructuring costs was 

slightly above our target. Taking these provisions into account, we achieved a result of 

€ 289 million (349 m). The provisions were set up in order to provide for the restructuring 

of our sales organisations. In order to introduce a consistent advisory process, reduce 

complexity and save on overheads, we started to streamline structures in our sales 

department in 2012. 

We intend to merge five German sales organisations into two units under the umbrella 

of an ERGO sales company which will enable us to manage and support our sales teams 

consistently, bundle recruitment and will ensure a more homogeneous brand appearance. 

All these are important requirements for the proper use of resources and for efficient 

workflows. However, the related cut of up to 700 salaried sales posts and 650 in-house 

posts has been a hard decision to make. In cooperation with our co-determination bodies, 

we are attempting to find fair, socially responsible solutions for those affected. I sincerely 

hope that we are able to find appropriate solutions. 

In 2012, our sales representatives were also the focus in terms of implementing our brand 

promise “To insure is to understand”. The mutual development of a consistent advisory 

process means that customer requirements are taken into account in every respect. If our 

sales partners are able to provide advice and conduct sales at the same high level, our 

customers will obtain the best possible insurance for all situations in life. In my opinion, 

you do not need to be an independent advisor in order to provide excellent insurance 

advice. 

This year’s Customer Report will also focus on how our sales partners advise and support 

our customers. The report describes how we implement our brand promise in terms of 

sales and other areas, and puts the focus on customers and their queries. The positive 

feedback that followed the first ERGO Customer Report in May 2012 gave us the reassurance 

that we are on the right track with this approach. 

In 2012, we continued to improve the clarity of our customer communication with further 

revisions to customer letters as well as to terms and conditions of insurance policies. 

We have a special committee to ensure that our communication remains clear. It is now 

easier than ever to understand what we cover and what we do not – so that our customers 

always know what to expect from us. This is only fair and also prevents misunderstandings 

from arising. We are particularly proud of our TÜV certification for “Clear Communication”. 

In order to attain this certification, all of our customer communication was subject to 

external auditing by the technical inspection agency TÜV Saarland. 

Our understanding of “To insure is to understand” also includes being ready to respond 

to criticism. In summer 2012, we were subject to allegations that we did not fully report 

on instances of misconduct in our sales organisations. Even if not all allegations were 

substantiated, we learnt that we did not fulfil our own demands on transparency in every 

respect. As a consequence, we published the results of our internal audit into claims of 

misconduct on incentive trips and other sales events on our website in October 2012.



Letter by the Chairman of 5 


We also listed the actions we have taken so that everyone can form an opinion on these 

events. We will continue to maintain this transparency and openness. 

When it comes to products, we are increasingly gearing them towards the expectations 

and requirements of our customers. Our new accident insurance package offers complete 

support with lots of assistance services and one-to-one advice. When developing the 

product, our colleagues listened closely to people who had experienced accidents to guide 

them. This approach has met with approval: the product has gone down well with our 

customers. And when we notice that a product no longer conforms to the expectations of 

our customers, we adapt it or discontinue it. 

As far as our international business is concerned, we are continuing to pursue our 

expansion in Asia and are increasingly benefiting from our years of preparation and local 

presence. After a five‐year preparatory period, a team has been working in the Chinese 

province of Shandong since spring 2012 to set up the ERGO China Life Insurance. The joint 

venture with the Shandong State-owned Assets Investment Holding Company as a strong 

local partner is intended to go into business this year as soon as the final approval has 

been obtained from the local authorities. 

In India, we agreed on a joint venture in life insurance in November 2012 with the wellpositioned 

Avantha Group conglomerate – an excellent addition to our successful market 

presence in non‐life insurance with the joint venture HDFC ERGO. By contrast, we have sold 

ERGO Daum Direct in the difficult South Korean market. 

These are the main topics that shaped 2012 for us, and we will continue to work on many 

of them this year too. Our employees and management alike have driven the Company 

onwards with their conscientious work, commitment and excellent ideas. Our expert sales 

partners are fully dedicated to our customers. I would like to thank each and every one of 

them for their hard work. I am sure that we have created a solid foundation for success 

both for this year and the years to come. 

As an insurer, we depend heavily on the trust our customers have in us. If people ask why 

we deserve this trust, I say to them: because customers are always our focus, and they 

sense how much we value them. Because we take on challenges and are prepared to 

change with the times. Because we think ahead, try to take action in good time, and learn 

from our mistakes. 

And we will do everything we can to earn and merit this trust in the future.



6 

Report of the Supervisory Board 

on the 2012 financial year 

The Supervisory Board reviewed the Company’s situation in detail during the reporting 

period. It monitored the management’s activities in accordance with legislation and 

the Company’s Articles of Association and advised the Board of Management regarding 

management of the Company. We were also involved in all major decisions. The Board of 

Management informed us regularly and in detail about important topics such as corporate 

planning, business development and the Company’s current situation. We were also 

consulted concerning corporate strategy. 

Dr. Nikolaus von Bomhard 

Chairman of the Supervisory Board 

of ERGO Versicherungsgruppe AG 

In the year under review, the Supervisory Board convened for three scheduled and two 

extraordinary meetings, which were attended by almost all members. In addition, the 

various committees (Standing Committee, Audit Committee and Board Committee) met, 

and the respective Chairpersons regularly reported in detail on their work. They were 

also available to answer any questions. The Nomination Committee and the Conference 

Committee as decreed by Section 27, para. 3, of the German Co-Determination Act 

( MitbestG) did not have to meet. 

The Board of Management also informed us in between sessions about important issues 

and significant upcoming decisions. Furthermore, as Chairman of the Supervisory Board, 

I was in regular contact with the Chairman of the Board of Management and discussed 

with him ERGO’s strategy, risk and capital management as well as current business 

develop ments. The subject of these discussions included the allegations made against 

ERGO by the press again in summer 2012. These allegations were made known in 2011 

and subsequently clarified in detail. 

Main issues 

During the balance sheet meeting held on 20 March 2012, the Supervisory Board was 

given a detailed review of the 2011 financial statement as well as being informed of 

ERGO’s business development. The Chief Risk Officer also informed us in detail of ERGO’s 

risk strategy and risk situation. In addition, the Board of Management reported on 

preparations for the introduction of the new Solvency II regulatory system. During the 

session held on 3 August 2012 we debated the profitability of classic life insurance in the 

context of the current economic and political environment in Germany.



Supervisory Board report 7 


We were told about the plans for a new ERGO life insurance product line, which is due to 

be launched in 2013. Finally, in its meeting on 4 December 2012, the Supervisory Board 

discussed the reports by the Board of Management regarding the development and risk 

exposure of ERGO’s investments. Other topics included developments in the non‐life and 

international segments. We also discussed the Labour Director’s HR Report. 

In two extraordinary meetings held on 4 June and 30 October 2012, the Supervisory Board 

discussed the results of the audits investigating allegations made against ERGO by the 

press as well as the measures adopted by the Board of Management in response to these 

allegations. The Board of Management presented the measures implemented so far and 

those to be adopted, along with more information about the topic of transparency on the 

ERGO website. 

In addition, during its meetings on 3 August and 4 December 2012, the Supervisory Board 

discussed the “Future of Sales” Initiative, including the planned strategic realignment of 

ERGO’s sales organisations. In its meeting on 4 December 2012, the Standing Committee 

approved and passed the transactions and measures concerning the Group’s organisation. 

Furthermore, the Board of Management informed us about a joint venture set up in China 

between ERGO Versicherungsgruppe AG and life insurer ERGO Lebensversicherung AG 

with a state investment company as a local partner, as well as a joint venture in the Life 

segment in India with the Avantha Group. It also outlined the sale of shares in ERGO Daum 

Direct in South Korea. In addition, we were told about the conclusion of a domination 

agreement between MunichFinancialGroup GmbH – a 100% subsidiary of Münchener 

Rückversicherungs-Gesellschaft AG – and ERGO Versicherungsgruppe AG. The contract was 

entered in the commercial register on 20 November and came into force on that date. 

Besides decisions regarding the extension of appointments to the Board of Management 

that were due to expire, we also addressed the topic of remuneration for the members 

of the Board of Management. The plenum made a decision on the amount of variable 

remuneration based on the annual performance in the 2011 financial year and for the 

2009 mid-term incentive plan. Furthermore, the assessment base and targets for variable 

remuneration were stipulated for the 2012 financial year. We also discussed changes to 

the remuneration system as of 1 January 2013 and passed the resolution accordingly. 

On this basis, we were able to establish the assessment base and targets for variable 

remuneration for the 2013 financial year. 

Corporate governance 

The ERGO Supervisory Board attaches great importance to good corporate governance. 

We took a close look at the efficiency of our operations by means of a questionnaire in the 

reporting year and discussed the various suggestions for improving the efficiency of the 

Supervisory Board.



Supervisory Board report 8 


Company and Group financial statements 

KPMG Bayerische Treuhandgesellschaft Aktiengesellschaft Wirtschaftsprüfungs gesellschaft 

Steuerberatungsgesellschaft, Munich, audited the annual financial statements prepared 

by the Board of Management, including the management report and the consolidated 

financial statements, including the Group management report for the 2012 financial year, 

and awarded them an unqualified auditor’s opinion. 

At a meeting held on 11 March 2013, the Supervisory Board’s Audit Committee discussed 

these documents at length, having examined them in advance. We then discussed 

in detail the annual financial statements and the consolidated financial statements, 

the management report and the Group management report, along with the reports 

by the external auditor at the balance sheet meeting, which was also attended by 

representatives of the auditing company, who made a statement. We had no objections. 

We approved the annual financial statements and consolidated financial statements for 

2012, which have now been endorsed. We reviewed the Board of Management’s proposal 

for the appropriation of profits and have approved it. 

Changes to the Supervisory Board 

Ms Ira Gloe-Semler, Mr Hans-Peter Claußen and Mr Ralph Eisenhauer stepped down from 

the Supervisory Board either during the year under review or at the end of the year. We 

wish to thank them for their dedication and in some cases many years of service on 

our Board. Ms Martina Scholze, Dr. Anne Horstmann and Mr Volker Kallé have joined the 

Supervisory Board as their replacements or as legally appointed members. 

Our gratitude to the Board of Management and staff 

The Supervisory Board would like to thank the members of the Board of Management and 

all Company employees as well as the staff of all companies within the ERGO Insurance 

Group for their huge personal commitment in a reporting year that was shaped by many 

changes and challenges. 

Düsseldorf, 19 March 2013 

On behalf of the Supervisory Board 


Chairman of the Supervisory Board 

of ERGO Versicherungsgruppe AG



Management Report



10 


The ERGO Insurance Group 

ERGO is one of the major insurance groups in Germany 

and Europe. We have a presence in more than 30 countries 

worldwide, but the focus of our activities is on European 

and Asian regions. ERGO offers a broad range of insurance, 

pension provisions and services. In its home market 

of Germany, ERGO ranks among the leading providers 

across all segments. Around 48,000 people work for our 

Group, either as salaried employees or as full-time selfemployed 

sales partners. In 2012, premiums amounted to 

over € 18 billion and insurance benefits for our customers 

accounted for more than € 17 billion. 

Our customers can choose which form of contact with 

ERGO suits them best, as we have the right sales channel 

for every customer: self-employed insurance sales partners, 

staff working in direct sales, insurance brokers and strong 

cooperation partners – both in Germany and abroad – 

respond to the needs of private and corporate customers 

alike. We maintain sales partnerships with the major 

European bank UniCredit Group and other banks, both in 

Germany and other European countries. 

ERGO is part of Munich Re, one of the leading global 

reinsurers and risk carriers. Within Munich Re, ERGO is the 

specialist for primary insurance, i. e. for insuring private and 

corporate customers directly, both in Germany and abroad. 

The group’s investments of € 214 billion, of which € 125 billion 

is accounted for by ERGO, are managed primarily by the 

joint asset management and fund company MEAG. 

As an integral part of Munich Re, ERGO is integrated into 

the core processes of Munich Re in terms of regulatory and 

corporate law, e. g. group strategy and corporate policy, 

capital and financial planning, risk management, controlling, 

reporting and accounting, or in general regarding significant 

legal transactions and measures. In 2012, a domination 

agreement was concluded between MunichReFinancialGroup 

GmbH – which is wholly owned by Münchener Rückversicherung 

AG – and ERGO Versicherungs gruppe AG. A group 

directive regulates the responsibilities and competences 

between the group executive management of Munich Re and 

ERGO in decisions of primary importance. 

This consolidated management report summarises the 

business activities of our Group. There is a general overview 

of ERGO’s performance on pages 19–22, which includes 

information on the following divisions: Life Germany, 

Health, Property-Casualty Germany, Direct Insurance, 

Travel Insurance and International. 

Our brand strategy 

In our domestic market of Germany, we offer life and 

property-casualty products under the ERGO brand. This 

product range is supplemented by our specialist insurers – 

DKV for health insurance, D.A.S. for legal protection and 

ERV for travel insurance. 

We are primarily represented on the international market 

by the ERGO brand and are actively giving the brand a 

higher profile. In line with this strategy, we renamed 

companies in Austria, Slovenia, Croatia and the Czech 

Republic during the reporting period. Over the course of 

the current year, we merged companies in Hungary and 

Slovakia; the merged companies now operate under the 

ERGO brand. 

Our brand communicates a clear promise to our customers: 

“To insure is to understand.” This promise represents a 

consistent approach that takes customers’ requirements 

into account in all areas of business. It consists of needsbased 

advice which understands and picks up on the 

customers’ concerns along with clear and easy-to-understand 

communication, innovative services and prompt 

support in the event of loss or damage. 

At the same time we are working towards further fulfilling 

our customers’ expectations and invite them and others 

to give us feedback which we analyse self-critically. Using 

the online ERGO Customer Workshop or as a member of 

the ERGO Customer Advisory Board, consumers can help 

to shape our products and services by contributing their 

suggestions and wishes.



Management Report11 


During the reporting period we published the first ERGO 

Customer Report. We have received numerous suggestions, 

ideas and criticism from consumers in the form of letters, 

conversations, e-mails,online feedback forms and via 

Facebook. These comments were condensed into 179 

questions, which we then answered. 

The ERGO Customer Advocate represents the interests of 

our customers within the Company. He takes on the role of 

mediator in cases where a customer feels that he has not 

been treated fairly and is not getting anywhere. Together 

with the Group’s size and financial strength, ERGO’s strong 

customer orientation makes it a long-term reliable partner 

for customers. 

Our management style and objectives 

Our Company is managed strictly with the customer, service 

and profitability in mind. The focus here is on integrated 

management of the divisions and their administrative 

processes, modern risk management comprising asset 

liability management, and value and risk-based management 

of all business activities. 

Our activities include various business models, providing 

all types of life, annuity and health cover and virtually all 

aspects of property-casualty insurance as well as legal 

protection cover. 

Value-based management 

Our objective is to analyse risks from every conceivable angle 

and to assess and diversify them, thereby creating lasting 

value for shareholders, customers and staff. The guiding 

principle of our entrepreneurial thinking and activity is to 

increase the value of our Company on a lasting basis, which 

also includes our active capital manage ment. We pursue this 

goal primarily by consistently applying value-based management 

systems which we constantly refine. Economic earnings 

are instrumental to answering the uestion of whether or 

not we have created value over a given period. They consider, 

for example, the costs of the relevant risk capital and the 

long-term nature of the business, and correspond to the 

change to the economic equity over a specified period of 

time. 

The framework for any business activity is our risk strategy, 

derived from the business strategy, from which we extract 

a detailed network of limitations and reporting thresholds. 

Besides value-based parameters, we observe a range of 

important additional conditions in managing our business. 

They include rules of local accounting systems, tax 

aspects, liquidity requirements and regulatory parameters. 

Our value-based management is characterised by the 

following aspects: 

• We assess business activities not only according to their 

earnings potential but also relative to the extent of the 

risks assumed, which is decisive in measuring added 

value as well. This is why we have implemented high 

quality standards for underwriting, pricing, cumulative 

controls and claims management. Only the risk–return 

relationship reveals how beneficial an activity is from 

the shareholder point of view. 

• With value-based performance indicators we ensure 

the economic view and the necessary comparability of 

alternative initiatives and prioritise these. 

• We closely link strategy and operative planning. 

Property-casualty insurance: 

combined ratio and economic earnings 

Across property-casualty insurance and other segments, 

which are by and large distinguished by their short-term 

business nature, we largely consider two factors: combined 

ratio and economic earnings. 

The combined ratio describes the percentage ratio 

between the sum of expenses for claims and benefits to 

customers (net) plus operating expenses (net) to earned 

premiums (net). 

When interpreting the combined ratio, the particular 

circumstances of the class of business in question have 

to be taken into account. The composition of the portfolio 

is of great significance, as is the degree to which the 

claims burden fluctuates over time. The time lag between 

premiums being received and claims being paid is of key 

significance. The more extended this period is, the longer 

the premiums received can be invested in the capital 

markets.





Higher combined ratios in classes of business with comparatively 

late claims notifications and long claims settlement 

processes (e. g. liability insurance) regularly go hand 

in hand with higher results from investments, which in 

turn cover the provisions for outstanding claims. These 

returns are not reflected in the combined ratio. For this 

reason, while we aim to keep the combined ratio as low 

as possible, it is not a sufficiently significant variable when 

considered on its own. 

The economic value creation is of decisive importance, 

which cannot be described properly with the combined 

ratio alone. The economic value added is determined 

internally – in compliance with the prospective regulatory 

system “Solvency II” – using economic earnings. Value 

added is characterised by the fact that value creation is 

not evaluated on the basis of current and forecast profits 

alone, but also by taking into account the amount of 

risks taken. 

The starting point for calculating economic earnings is 

the change in economic equity within a period of time. 

Determining factors are primarily the IFRS result, the 

change to the balance sheet and off-balance sheet 

reserves on the assets and liability side, as well as risk 

capital costs for the risks insured. The change in economic 

equity is adjusted according to capital measures, such as 

dividends. Additional adjustments concern the change 

of items, which are not included in the economic capital, 

yet still bear influence on the economic value added. 

An example of this is the construction of goodwill value 

following an acquisition. 

Life and Health: 

market-consistent embedded value 

Life and health insurance products are characterised 

by their long-term nature and the distribution of results 

over the duration of the policies. For valuing such longterm 

portfolios whose performance cannot be reasonably 

measured on the basis of a single year, we follow 

the Principles of Market Consistent Embedded Value 

(MCEV) © , the current version of which was published by 

the European Insurance CFO Forum in October 2009. 

MCEV comprises a company’s equity and the value of 

in-force covered business. The latter is the present value of 

future net profits from the insurance portfolio and related 

investments calculated using financial and actuarial 

methods, taking into consideration the time value of 

the financial options and guarantees and the explicitly 

determined costs of capital. 

MCEV relates to the portfolio as at the valuation date. It 

encompasses more than 97% of our life insurance and 

long-term health insurance business. By contrast, MCEV 

does not include the value of future new business. However, 

the valuation is made under the assumption of 

continued operations. Options and guarantees – especially 

for the policyholders – are explicitly valued using stochastic 

simulations. MCEV reflects the present value of all cash 

flows for all important currency regions on the basis of the 

swap rates and the implicit volatilities at the valuation date 

of 31 December 2012. Assets that are traded on the capital 

markets are valued on the basis of the market values 

observed at the valuation date. 

The development of the insurance portfolio is modelled 

by applying the current expectations for biometrics (e. g. 

mortality and morbidity), lapses and costs. The participation 

of policyholders in surplus is modelled according to the 

current planning and in line with the statutory regulations, 

and these are included in the valuation. For the individual 

companies, we use tax rates and calculations based on 

national regulations; tax loss carry-forwards are also 

included in the calculation. The cost of capital essentially 

includes costs for the not explicitly modelled risks of the 

business. 

The change in MCEV within one year – excluding effects 

of exchange-rate fluctuations, acquisition and sale of 

companies, dividends and capital injections – is shown 

as the total embedded value earnings. These are used 

under the term Economic Earnings to manage life and 

health insurance. If the total embedded value earnings 

are adjusted by also including the influences of changes 

in capital market parameters, such as changes to the rate 

of interest, the term is known as the operating embedded 

value earnings, which are a measure of the operative 

business performance for one year.





Managing investments 

The main focus of our investment strategy is assetliability 

management, in which we take into account key 

characteristics of underwriting and other liabilities in 

structuring our investment portfolio and measure investment 

risks not only in absolute terms, but also in relation 

to changes of value in our liabilities. Changes in economic 

factors are likely to influence the value of our capital 

investments, just as they will have an impact on the value 

of technical provisions and liabilities. This reduces our 

vulnerability to the effect of capital market fluctuations 

and stabilises our own equity. For this purpose, we mirror 

important features of the liabilities, such as maturity 

patterns, currency structures, and inflation sensitivities, on 

the assets side of the balance sheet by acquiring investments 

with similar characteristics if possible. In terms 

of currency positioning, exchange-rate fluctuations thus 

affect assets and liabilities in equal measure. Currency 

conversion losses on assets are largely offset economically 

by gains made by converting technical liabilities. In 

this approach, any deviations from the structure of our 

liabilities are made consciously taking due account of our 

risk-bearing capacity and the risk spreads achievable. To 

a limited extent, we also align our investment portfolio 

in such a way that it increases in value in line with rising 

inflation rates. To achieve this, we invest in inflationsensitive 

asset classes such as inflation-linked bonds and 

inflation-linked swaps, as well as real assets. 

Non-financial performance measures 

In addition to these purely financial performance factors, 

non-financial performance measures such as innovation, 

speed of processes, staff-training level as well as customer 

satisfaction, sales service and productivity also play a 

part. A company can only be successful over the long 

term if it operates sustainably and takes account of such 

future- oriented qualitative factors. This is why our strategic 

management focuses on the five target groups, namely 

customers, sales partners, staff, society and investors. 

We promote an entrepreneurial culture among our staff 

through the clear allocation of responsibility and accountability, 

making clear how much the individual, unit and 

field of business contribute to increasing value. Our incentive 

systems for executives and the Board of Management 

therefore also encourage value creation: the higher a staff 

member or executive is positioned in the management 

hierarchy, the more dependent their remuneration is on 

performance. ERGO Insurance Group Board members and 

executives have targets according to economic earnings. 

Furthermore, the customer satisfaction index, Net Promotor 

Score, is a key controlling variable for ERGO which extends 

into the targets and awarding of bonuses to members of 

the Board of Management. 

To configure our economic asset-liability management 

as effectively as possible, we also use derivative financial 

instruments to hedge against fluctuations in the interest 

rate, equity and currency markets. Under IFRS accounting, 

we recognise these in profit or loss, i. e. as income or 

expense in the income statement. This type of recording 

is not done with related underlying trans actions. Despite 

our economically well-balanced insurance and investment 

portfolios, accounting inconsistencies of this kind and other 

differences between the economic and balance sheet 

perspectives can give rise to considerable fluctuations in 

our IFRS investment, currency and consolidated results, 

particularly in times of greater volatility on the capital 

markets. Financial derivatives are explained in further detail 

in the notes on the consolidated financial statements [6l].



14 


The ERGO Insurance Group – Governing bodies 

Supervisory Board 

Dr. Nikolaus von Bomhard, Chairman 

Chairman of the Board of Management of 

Münchener Rückversicherungs-Gesellschaft AG 

Michael David, Deputy Chairman 

Insurance employee 

Dr. Christine Bortenlänger 

Managing Director of 

Deutsches Aktieninstitut in Frankfurt 

Hans-Peter Claußen, until 31 August 2012 


Ralph Eisenhauer, until 31 December 2012 

Executive employee 

Frank Fassin 

District Chairman Financial Services ver.di NRW 

Prof. Dr. Nadine Gatzert 

Professor for Insurance Economics at the 

Friedrich-Alexander University in Erlangen-Nuremberg 

Ira Gloe-Semler, until 20 March 2012 

Associated Union of Workers Secretary ver.di 

Dr. Heiner Hasford 

Member of the Board of Management of 

Münchener Rückversicherungs-Gesellschaft AG (retired) 

Dieter Herzog 


Dr. Anne Horstmann, since 1 September 2012 


Dr. Lothar Meyer 

Chairman of the Board of Management of 

ERGO Versicherungsgruppe AG (retired) 

Dr. Markus Miele 

Managing Partner of Miele & Cie. KG 

Silvia Müller 


Marco Nörenberg 


Bernd Otten 

Head of Corporate Office Münchener Rückversicherungs- 

Gesellschaft AG 

Prof. Dr. Bernd Raffelhüschen 

Director of the Institute of Public Finance of the 

Albert-Ludwigs-University of Freiburg 

Martina Scholze, since 27 April 2012 

Trade Union Secretary of Financial Services Group of ver.di 

Richard Sommer 

Former Head of the Federal Group Insurance of ver.di 

Dr. Theodor Weimer 

Spokesman of the Board of Management 

of Unicredit Bank AG 

Heinz Wink 

IT employee 

Prof. Dr. Klaus L. Wübbenhorst 

Managing Director of WB Consult GmbH 

Volker Kallé, since 1 January 2013 

Executive employee





Governing bodies 

Audit Committee 


Dr. Theodor Weimer 

Heinz Wink 

Board Committee 


Hans-Peter Claußen, until 30 April 2012 

Dieter Herzog, since 1 May 2012 


Nomination Committee 




Standing Committee 


Michael David 



Marco Nörenberg 

Conference Committee 


Michael David 


Richard Sommer 

Board of Management 

Dr. Torsten Oletzky, Chairman 

Group Development 

Communications 

ERGO Customer Advocate 

Legal Affairs, Compliance 

Internal Auditing 

Dr. Bettina Anders 

IT Germany as well as Comprehensive Questions 

of Principle, Customer Service, Company Organisation 

Dr. Daniel von Borries 

Finances and Investments 

Life Insurance Germany 

MEAG/ERGO-Interface 

Christian Diedrich 

Non-Life Insurance 

(Property-Casualty, Legal Protection) Germany 

Dr. Ulf Mainzer, Labour Director 

Domestic Human Resources as well as 

Comprehensive Questions of Principle, 

General Services, Facility and Materials 

Management/Purchasing and Logistics 

Germany 

Dr. Jochen Messemer 

International Operations 

(except for Travel Insurance) 

Dr. Clemens Muth 

Health Insurance (including Travel Insurance) 

Dr. Rolf Wiswesser 

Sales Germany, Competence Centre Bank Sales Germany, 

Marketing, Brand Management 

Dr. Christoph Jurecka 

Accounting, Taxes, Planning and Controlling, 

Risk Management



16 


Business environment 

Our business environment is being shaped by a number of 

global trends with a long-term impact. Demographic shifts 

are giving rise to fundamental developments and posing 

enormous challenges for social security and healthcare 

systems, particularly in industrialised countries. Increasing 

life expectancy is placing a burden on pay-as-you-go social 

security systems, a situation aggravated further by falling 

birth rates. Europeans will therefore only be able to maintain 

their old-age provision and first-class medical care in 

the medium term if they take out additional private cover. 

This presents a great opportunity for the private insurance 

industry. However, consistently low interest rates are 

threatening the success of long-term savings. 

Developing and emerging countries are experiencing rapid 

population growth and, at the same time, a swift rise in 

prosperity among large sections of the population. As a 

result, the emerging Asian economies in particular are gaining 

in global importance. Correspondingly, the economic and 

geopolitical weight of industrialised countries is declining. 

Worldwide economic integration, technological progress and 

digitalisation are accelerating the globalisation of capital 

flows and supply chains, and increasing the complexity of 

the world economy. 

In this environment, we are seeing a rising number of 

major events which impact on the insurance industry. 

Insured losses are rising disproportionately to economic 

activity. We believe that climate change is responsible, 

alongside advancing urbanisation and a concentration 

of assets in exposed regions. This is producing new risk 

potentials and accumulation risks that make it imperative 

to constantly refine our underwriting. 

Companies like ERGO, which are among the leaders in 

terms of risk management, are able to take advantage of 

the opportunities arising from this global trend. With our 

sound risk awareness, we are able to hold our ground even 

in a complex and volatile environment. 

General economic trend 

Global economic growth weakened for a further consecutive 

year in 2012, due in large part to the still-smouldering 

state debt and banking crisis in the Eurozone. The eurozone 

as a whole had already slid into a recession in late 2011 

from which it was unable to free itself during the period of 

review. Budget consolidation measures curbed growth, and 

at the same time the rate of unemployment continued to 

rise, reaching a record level. 

Chinese economic growth slowed down considerably, due 

in part to receding global demand for export. The performance 

of the Japanese economy also weakened over the 

course of the year. Meanwhile, the moderate economic 

growth of the USA buttressed the global economy. 

At the beginning of the year, the Euvrozone crisis appeared 

to have very little impact on the German economy, though 

the economy faltered in the second half of the year. 

German price-adjusted GDP rose by just 0.7% in 2012 

( provisional estimate from the Federal Bureau of Statistics 

of 15 January 2013). The trend on the German employment 

market, however, remained positive. The average unemployment 

rate for the year was 6.8%. Average inflation on 

consumer prices in Germany was 2.0% in 2012. 

Capital market trends 

Political events, particularly within the European Economic 

and Monetary Union, and measures adopted by the central 

banks were the driving forces behind capital market 

develop ments, including large fluctuations. Periods of high 

demand for high-risk securities alternated with periods of 

risk aversion. Overall, for most of the asset classes trends 

were positive. 

Over the past year, the overall positive development for 

virtually all types of securities belied the major fluctuations 

of 2012. The main driving force behind these fluctuations 

in the international markets was the ongoing state debt





crisis in the Eurozone. At the beginning of the year, some 

government bonds in countries on the European periphery 

recorded considerable gains. We attribute this development 

to the generous provision of liquidity from the 

European Central Bank (ECB), which also greatly benefited 

high-risk securities such as shares. However, the crisis 

intensified in the second quarter due to uncertainty about 

the outcome of the Greek elections, the adjustment of the 

goals to reduce Spain’s budget deficit and debates on the 

possibility of certain countries leaving the euro. As a result, 

the returns on most “safe haven” bonds reached new lows. 

Plans to set up a Eurozone banking union and the ECB’s 

announcement of its intention to possibly buy up all shortterm 

government bonds from countries on the European 

periphery led to lower returns on peripheral bonds and a 

marked recovery on the stock market in the second half of 

the year. All in all, 2012 was a positive year for shares. The 

Euro Stoxx 50 price index was up by 13.8% and the DAX 

performance index increased by 29.1%. 

Yet demand remained high for safe-haven securities, such 

as German government bonds. The already low return on 

ten-year German government bonds fell a further 50 basis 

points to 1.3% by the end of the year. This change in 

interest rates made some considerable gains possible on 

the bond markets. 

Central banks outside the Eurozone also relaxed their 

monetary policy due to weak economic growth on a 

global scale. The US Federal Reserve announced a further 

bond-purchasing programme, which will be maintained 

until the situation on the employment market improves 

substantially. 

The trend in the insurance industry 

At the end of 2012, insurers in several EU countries introduced 

the new unisex tariffs, meaning that gender is no 

longer a factor in the calculation of premiums and benefits 

in terms of risk differentiation, following a verdict passed 

by the European Court of Justice in 2011. The court viewed 

different premiums for men and women as undue discrimination. 

For example, life insurance companies may 

no longer take into account the observed difference in life 

expectancies of men and women. This ruling is valid for all 

policies signed since 21 December 2012. 

The overall economic trend has a strong effect on the 

development of premiums in the insurance industry, especially 

for property-casualty insurance. In the case of life 

and health insurance, additional important factors are the 

influence of capital markets and changes to the legal and 

tax frameworks. This means that the European insurance 

markets operate according to very different parameters. 

In line with the focal point of our business, the following 

sections take a closer look at trends in our domestic market 

of Germany. 

On the whole, insurance premiums in Germany rose by 1.5% 

in 2012. The figures here and below are based on provisional 

estimates provided by the German Insurance Association 

and the German Association of Private Health Insurers. 

The market figures are based on gross figures established 

in accordance with the German Commercial Code (HGB), 

meaning they are not necessarily comparable with figures 

calculated according to IFRS or net of reinsurance. 

Life insurance in 2012 

Life insurance in Germany (including pension and retirement 

funds) continued to suffer from the adverse conditions 

experienced on the capital markets in 2012. Persistently 

low interest rates have led to a reduction of bonus rates 

across the industry. This particularly influenced the market 

for single-premium products. New business with regular 

premiums was also down on last year. Widespread economic 

uncertainty has prompted customers to be cautious 

of long-term commitments. New business was down by 2% 

across the market. The top priority for customers is the security 

of their private old-age provision, making guaranteed 

components very important to them. Insurance against the 

financial impact of occupational disability and the need for 

nursing care also recorded a marked increase in business. 

Total premium income was up slightly by 0.8% to € 83.8 billion 

(83.2 bn) across the industry, due to a lower number of 

policies expiring. The previous year saw a large amount of 

scheduled maturities. Many of these policies were taken out 

in 1999 because of the planned tax reforms at that time. 

The amount paid out to life insurance customers therefore 

dropped to € 75 billion 85 bn).





The German Federal Court of Justice ruled against various 

life insurers, rendering certain terms of insurance invalid 

in several verdicts during the period covered by this report. 

These included terms governing the surrender value, 

cancellation fee and the calculation of acquisition costs 

applied to new policies from 2002 to 2007. The cancellation 

fee clause may also affect tariffs from 2008 onwards. 

Private health insurance in 2012 

The share of private health insurance in the wider health 

insurance market stabilised in 2012 despite difficult market 

conditions. According to initial provisional forecasts, private 

health insurance achieved growth of 3.4% in premium 

income, amounting to € 35.9 billion (34.7 bn). Private health 

insurers’ benefits, including settlement expenses, rose by 

around 4.8% to € 23.9 billion (22.8 bn). 

The new amendments to the law governing financial 

services mediation and property include a limit on commission 

amounts paid to agents and an extension of the 

cancellation liability periods, both of which have been in 

force since 1 April 2012. In addition, the state has been 

paying the premiums on behalf of the disadvantaged 

directly to the respective private health insurer since this 

date. In return, the insurance companies have agreed in 

recognition of regulatory admissibility to forego premiums 

payable by 31 January 2012 due to the extent of the gap in 

statutory cover. 

Property-casualty insurance in 2012 

Since the economic situation of private households and 

businesses continues to improve, property-casualty insurance 

recorded a healthy rise of 3.7% in premium income 

in 2012 to € 58.7 billion (56.6 bn). Once again, all lines of 

business made a contribution. However, this was mainly 

due to rises in premium rates and adjustments to clauses 

rather than an increase in the number of insured risks. 

Motor insurance grew by an impressive 5.1%, although it 

still has a way to go before producing a technical profit. 

The rates of growth of liability insurance (+ 2.0%), legal 

protection insurance (+ 1.5%) and accident insurance 

(+ 1.0%) were all below average. Premium income recorded 

for transport and aviation insurance was up by 3.5%, 

property insurance lines of business rose by 4.3%. 

Claims expenditure rose proportionately to the increase in 

premiums. On the one hand, damages related to natural 

hazards in 2012 were down on the previous year. On the 

other, extreme frost in February and a number of other 

major damaging events caused a great deal of destruction. 

An explosion in a chemical factory has been the largest 

single insurance claim in Germany to date. The combined 

ratio across the market is expected to remain virtually 

unchanged at 98%.



19 


Business performance 

2012 was a year dominated by challenging economic 

conditions and good progress in major projects for ERGO 

Insurance Group. The state debt crisis in the Eurozone has 

continued, leading to shrinking economies in certain countries, 

including some where we are active, such as Greece. 

Interest rates fell yet further for government bonds which 

have been considered safe by market participants. 

In our home market of Germany, we have begun an 

extensive reorganisation of our sales forces. We aim to 

introduce a uniform advisory procedure, reducing complexity 

and therefore cutting costs. This major project is set 

to be completed during the course of the next two years. 

This will result in savings from as early as 2014; from 2015 

these should amount to over € 160 million gross per year. 

The project, however, has placed the current year’s result 

under considerable strain. In the fourth quarter of 2012, 

we booked the provisions for the restructuring costs which 

impacted our net result by an amount of €− 128 million. 

We have considerably increased profits in our international 

business. Our operating result abroad has more than 

doubled, leading to a considerable net result. Our restructuring 

measures of the past few years are now yielding 

results. 

The consolidated result for ERGO Insurance Group 

amounted to € 289 million (349 m). We had aimed for 

around € 400 million and would have achieved this figure, 

but for the one-off costs of restructuring. This is clearly 

shown in the stark increase in operating profit, up by 17.9% 

to € 951 million (806 m). 

We determine figures for long-term business in the 

life and health insurance segments according to strict 

market-consistent methods. We still do not apply interest 

surcharges or liquidity premiums. The market-consistent 

embedded value (MCEV) determined in this way, rose to 

€ 2.7 billion (0.9 bn). Contributing to this was the fact that 

risk premiums recorded on fixed interest-bearing securities, 

especially those for government bonds in peripheral Eurozone 

countries, had fallen at the end of 2012. An additional 

factor was the first-time inclusion of ERGO Direkt Krankenversicherung 

in the MCEV calculation. The total embedded 

value earnings came to € 1.5 billion (− 3.0 bn). The value of 

new business climbed to € 146 million (37 m). 

Premium income 

ERGO Insurance Group’s total premium income was 8.4% 

lower in the reporting year than the preceding year, at 

€ 18.6 billion (€ 20.3 bn). This significant drop is as much 

a result of disposals as it is due to organic effects. By the 

end of 2011 we had sold our international health insurer to 

Munich Health Holding AG. We had also sold our Portuguese 

subsidiaries by the end of 2011, and in October 2012, we sold 

ERGO Daum Direct in South Korea. This divestment explains 

6.1% percentage points of the drop. Furthermore, we sold 

considerably less single-premium life insurance policies in 

Germany and Austria and underwrote a significantly lower 

volume of the single-premium MaxiZins product in direct 

insurance. This is due to low interest rates and fiscal changes 

in Austria. Gross premiums written – in contrast to total 

premiums they do not include the savings premiums from 

unit-linked life insurance and capitalisation products – was 

€ 17.1 billion (€ 18.5 bn), a drop of 7.7%. 

ERGO Insurance Group 2012 

€ million 

2011 

€ million 

Change 

% 

Total premium income 18,562 20,270 − 8.4 

Gross premiums written 17,091 18,519 − 7.7 

Investment result 5,262 4,116 27.8 

Net insurance benefits 1 16,744 16,703 0.2 

Net operating expenses 3,512 3,814 − 7.9 

Consolidated result 289 349 − 17.2 

1 Incl. policyholders’ profit participation





Total premium income 2012 

€ million 

2011 

€ million 

Change 

% 

Life Germany 4,754 4,955 − 4.1 

Health 4,932 5,975 − 17.4 

Property-casualty Germany 3,138 3,087 1.6 

Direct insurance 1,212 1,422 − 14.8 

Travel insurance 460 485 − 5.2 

International 4,066 4,346 − 6.4 

Total premiums 18,562 20,270 − 8.4 

For business within Germany, total premium income reached 

€ 14.2 billion (€ 14.6 bn) (− 2.3%), while gross premiums 

written in accordance with IFRS were € 13.2 billion (€ 13.3 bn) 

(− 0.9%). For international business, total premium income 

stood at € 4.3 billion (€ 5.7 bn) (− 24.1%), while gross premiums 

written in accordance with IFRS were € 3.9 billion (5.2 bn) 

(− 24.9%). 

The German life insurance business saw gross premiums 

written fall by 5.6% to € 3.9 billion (€ 4.2 bn). Both this and 

the 4.1% drop in total premiums can be largely traced 

back to less single-premium business. Due to the low rate 

of interest, we are very cautious about the conditions we 

offer our customers. Overall, single-premium business was 

down by 11.5% to € 939 million (1,061 m). The continuing 

economic uncertainty and the drop in the technical interest 

rate to 1.75% as of 1 January 2012 was also reflected 

in new business based on regular premiums: reaching only 

€ 307 million (€ 314 m), it was 2.0% down on last year’s 

figures. When measured in terms of APE (annual premium 

equivalent, i. e. regular premiums plus a tenth of single 

premiums), new business fell by 4.4%. 

As a result of the aforementioned divestment of international 

health subsidiaries, gross premiums written in the 

health segment were 17.4% lower. The remaining domestic 

business grew slightly by 0.5% to € 4.93 billion (€ 4.91 bn). 

Premium rate adjustments in 2012 were very low – something 

our customers were very pleased about. At € 176 million 

(225 m), the new business was significantly lower 

than last year’s figures (− 21.6%). In 2011, the abolition 

of the three-year waiting period when taking out health 

insurance has had a positive impact on the number of 

new intakes in comprehensive health insurance at the 

beginning of the year. 

In Germany, gross premiums written for property- casualty 

insurance increased by 1.6%. At 6.0%, commercial/ 

industrial insurance business once again recorded the 

highest rise. In the area of private property insurance, 

we registered a 1.9% increase in premiums and a 0.4% 

increase in motor insurance. Despite a slight decrease of 

1.2% in the number of insured vehicles, the profitability of 

the portfolio has improved overall. There were also slight 

decreases in premium income in the areas of legal protection 

insurance (− 0.4%) and in personal accident insurance 

(− 1.6%). The latter was primarily due to lower premiums 

in personal accident insurance with premium refunds 

(ROP). We discontinued this product in late 2012 because 

we wanted our accident insurance products to focus more 

on ensuring quality of life with their extensive assistance 

services. This is no longer possible for ROP products as a 

result of the low interest-rate income currently achievable 

on investments. 

Total premium income for the direct insurance business was 

down by 14.8%. This is due to the MaxiZins capitalisation 

product: to reflect the low interest rates on the capital 

markets, we also lowered interest, which alone resulted in a 

decrease in premium income of € 242 million as compared to 

the previous year. By contrast, gross premiums written were 

up by 3.5% to € 957 million (€ 924 m). Total premium income 

from life insurance fell by 25.9%. The only health insurance 

we offer as direct insurance is supplementary, an area 

which registered solid growth of 15.7%, primarily as a result 

of premium rate adjustments. Property-casualty insurance 

increased by 1.0%. 

Gross premiums written for travel insurance were 5.2% less 

than the previous year, also because unprofitable contracts 

were not extended. In Germany, a decline of 1.2% was 

recorded, while international business fell by 8.1%. 

The fact that total premium income in the International 

business was lower than the previous year (− 6.4%) is due 

to the effects described above, namely, sale of daughter





Investment result 2012 

€ million 

2011 

€ million 

Change 

% 

Regular income 4,813 5,042 − 4.5 

Write-ups/write-downs 109 − 1,041 110.4 

Realised gains/losses 35 708 − 95.1 

Other income/expenses 305 − 594 151.3 

Total 5,262 4,116 27.8 

companies, lower single-premium business and strictly 

profit-oriented underwriting. Total premium income was 

therefore 8.5% down on the previous year for life insurance 

and 4.8% lower for property-casualty insurance. 

Benefits and costs 

Benefits for our clients in the reporting year amounted 

to € 17.6 billion (€ 17.4 bn). For our own account, i. e. after 

the deduction of the reinsurers’ share, the figure stood 

at € 16.74 billion (€ 16.70 bn), up by 0.2%. The fact that 

these developments differ from the premium income is 

primarily due to the net investment income. As a result of 

lower write-downs, this figure was much higher than in 

the previous year. The net value of unrealised gains and 

losses in unit-linked life insurance was particularly positive 

in the year under review, following negative performance 

the previous year. As a result, total transfers to provisions 

for future policy benefits were higher overall. Expenditure 

on premium refunds was significantly higher than for 

the previous year; this was also due to an increase in the 

expected share for policyholders entitled to bonuses in the 

German life insurance business in the future. 

Net claims expenditure was 10.5% below last year’s 

total. Even when adjusted for the sale of daughter companies, 

net claims would have been below the previous 

year’s figure. This was primarily due to German life insurance 

(− 14.6%). In the health segment, there was a slight 

decrease (− 1.6%), while German property-casualty insurance 

(including legal protection) recorded an increase of 

3.4%. The combined ratio there was 95.8% (94.4%) for the 

year under review. Improvements in motor insurance were 

up against high levels of frost damage from the late cold 

snap in February and some coincidental cases of major 

damage in the summer. In the year under review, we also 

restructured our reinsurance relations with Munich Re concerning 

property-casualty insurance, and quite a number 

of contracts were commuted. In addition, we made risk 

provisions within the range of actuarial estimates and have 

also made higher provisions for claims in specific lines of 

business. 

In 2012, the German Federal Court of Justice ruled against 

various life insurers, rendering their terms of insurance 

invalid in several verdicts (see chapter ‘Business environment’). 

ERGO Lebensversicherung AG was one of the 

companies directly affected from a ruling. Since the rulings 

were decisions in principle, the other companies of the 

ERGO Group will also not continue to apply the terms of 

insurance in question. We adjusted provisions set up before 

2012 accordingly. 

The developments in our international business have been 

very positive; here, we were able to improve our combined 

ratio significantly. At 100.5% (105.1%), we were almost 

able to achieve the level required for technical profit. The 

range of measures implemented over the past few years to 

improve earnings are starting to take effect. We achieved 

exceptional technical profit in both Poland and Greece in 

2012. Results are also starting to improve notably in Turkey, 

though there is still a good amount of progress to be made 

in the current year. 

At € 3.5 billion (€ 3.8 bn), net operating expenditure was 

7.9% down on the previous year. This is roughly equivalent 

to the net premium income earned (− 7.5%). Gross acquisition 

costs also fell by 7.9%, with gross administrative 

expenses down by 3.0%. Once again we were forced to 

amortise deferred acquisition costs because of continually 

low interest rates. 

Investment result 

The investment result increased by a healthy 27.8% during 

the 2012 financial year to € 5.3 billion (€ 4.1 bn). Returns 

based on the average amount of investments at market 

value stood at 4.1% (3.4%). The improvement is largely 

due to the fact that there were no longer similar negative 

effects as in the previous year, notably the write-downs 

on Greek government bonds or the negative net value of 

unrealised gains and losses in unit-linked life insurance.





The situation on the capital markets became somewhat 

better in the second half of 2012. However, this applied 

more to stock markets. At the end of the year the yield 

curve for German government bonds lay above the previous 

year’s value only for very short durations. The return 

on ten-year German government bonds lost 51 basis points 

over the course of the year, bringing it to 1.32%. Once 

again, negative nominal returns were recorded in single 

cases. These low interest rates are causing us major problems 

as an institutional investor, since guarantees and 

interest rates on our investments are extremely important 

when it comes to old-age provision and health insurance. 

These demand a high degree of security and return. We 

therefore placed the bulk of our investments, amounting to 

€ 125 billion (€ 117 bn), into a broad range of fixed-interest 

securities and loans. A breakdown of our investment 

portfolio and major developments is detailed in the next 

chapter of this report. 

With this in mind, an assessment of our investment results 

is a double-edged sword. Regular income was 4.5% down 

on last year’s figure at € 4.8 billion (€ 5.0 bn). This is the 

result of the falling average interest rate for our portfolio. 

However, the extraordinary result, the net value of writeups 

and write-downs on capital investments as well as 

gains and losses from divestments, developed positively. 

It came to € 798 million (€− 538 m), once again a clearly 

positive figure. At € 603 million (€− 263 m), the net figure 

for unrealised gains and losses from unit-linked life insurance 

had a significant impact. The portfolio of interest-rate 

derivatives we hold to hedge the risk of sustained low 

interest rates increased in value too. This led to earnings 

of € 166 million (€ 368 m). The impact on the consolidated 

result was € 42 million (€ 83 m). 

appropriated to the technical result. For further details 

on calculating the technical interest income in particular 

business segments, please refer to [25] in the Notes. 

After the technical interest income has been deducted, 

the non-technical result essentially comprises that part of 

the investment result which does not constitute benefits 

to customers. This rose to € 295 million (€ 84 m) alongside 

the improved investment result. By contrast, the technical 

result dropped by 9.2% to € 656 million (€ 723 m). One 

of the reasons for this was the sale of companies in the 

previous year. 

The consolidated result was € 289 million (€ 349 m). It is 

important to note that provisions for restructuring costs for 

the reorganisation of our German sales forces reduced the 

result by € 128 million. If our results were adjusted for this 

effect, we would have achieved our goal of € 400 million. 

The cost of restructuring is spread over the following 

domestic business fields: Life insurance Germany, Health 

insurance, Property-casualty insurance Germany and 

ERGO Versicherungsgruppe AG as the parent company. As 

a result, and due to the strain incurred by continually low 

interest rates, the result for the Life insurance Germany 

was slightly negative. The fall in profits in Health insurance 

can be largely attributed to major gains from divestments 

in the previous year from the sale of international companies, 

an event which was not repeated during the year 

under review. There were partially sharp rises in profits 

recorded for Property-casualty insurance Germany, International 

business, Direct insurance and Travel insurance. 

The developments in our international business have been 

particularly positive. 

Results 

The operating result was up by an impressive 17.9% to 

€ 951 million (€ 806 m). This is made up of the technical 

and non-technical results. A technical interest income is 

Events after the balance sheet cut-off date 

No events have occurred since the balance sheet cut-off 

date which require separate disclosure. 

Investment result by type of investment 2012 2011 Change 

€ million € million % 

Land and buildings, including buildings on third-party land 183 170 7.6 

Investments in affiliated companies and associates 45 475 − 90.5 

Loans 2,303 2,202 4.6 

Other securities 2,390 1,816 31.6 

Other investments 341 − 547 162.3 

Total 5,262 4,116 27.8



23 


Assets and financial position 

Our capital structure is essentially determined by our insurance 

activities: the liabilities side of the balance sheet is 

dominated by technical provisions (85.2% of the balance 

sheet total including unit-linked business), i. e. future payout 

commitments to our clients. Equity (3.1% of the balance 

sheet total) and strategic debt capital items (0.8% of the 

balance sheet total) are the most important sources of funds 

on the liabilities side. The assets side of the balance sheet is 

dominated by capital investments, which essentially serve to 

cover technical provisions. 

Equity and capital management 

Debt capital 

Subordinated capital and strategic debt complete our 

financial resources. They reduce our capital costs and 

ensure that sufficient liquidity is available at all times. 

The subordinated capital recorded on our balance sheet 

primarily comes from Munich Re (see also [14] in the 

Notes). 

Our liabilities are mainly deposits from business ceded 

to reinsurance (40.8%) and for direct insurance business 

(35.5%). 

Equity rose sharply to € 4.6 billion (3.8 bn) by the end of 

the reporting year. As well as retained earnings, “other 

reserves” in particular increased in value. The latter 

includes gains and losses recorded on the balance sheet 

and attributable to our shareholders, which rose considerably 

due to declining interest rates and increasing share 

prices. We report on the developments of our valuation 

reserves – on- and off-balance-sheet – later on in this 

chapter. 

We practise active capital management, which ensures 

that ERGO’s equity base is maintained at an appropriate 

level. We determine our capital requirements using our risk 

models and the requirements laid out by the regulatory 

bodies. Subordinated capital is also taking on an increasingly 

important role in our capital management and is 

partially classified as equity. Overall, our equity should 

not exceed the level required to run the business. This is 

because, through our incorporation into Munich Re’s groupwide 

capital management, we benefit from the group’s 

overall financial strength. 

There is no supervision at ERGO Group level because this 

takes place at the level of Munich Re. ERGO’s financial 

strength and that of its major subsidiaries are assessed 

by leading rating agencies. These ratings are high and are 

published on the ERGO website: www.ergo.com. 

Technical provisions 

Technical provisions are largely attributable to personal 

lines business, in particular from Life insurance Germany 

(51%) and Health insurance (28%) business. Detailed 

information on provisions can be found on pages 97 et 

seq. of the Notes to these financial statements. 

In the case of obligations arising from insurance business, 

we are unable to predict the time and amount of payment 

with certainty. The pattern of pay-outs of technical 

provisions over time varies enormously from one line of 

business to another. As regards travel insurance, business 

is extremely short-term. On average, final settlement 

of claims takes just a few days. In the area of propertycasualty 

insurance, a large portion of the reserves put 

aside is paid out within a year. For liability insurance, however, 

substantial amounts may accrue decades after the 

policy was taken out. In life and health insurance we use 

premiums to set up actuarial and ageing provisions, which 

make up the lion’s share of technical provisions.





Investments 

As far as our investment strategy is concerned, our principle 

is to focus on the structure of our liabilities – essentially 

our technical obligations. On this basis, we develop an 

optimal investment strategy for each company, taking 

particular account of the capital strength of the company 

in question or its risk-bearing capacity. 

With our asset liability management (for more information, 

see the risk report) we strive to stabilise our balance sheet 

against fluctuations on the capital markets. We therefore 

focus on important liability characteristics such as maturity 

and currency structures or sensitivities to inflation when 

acquiring specific investments. We limit currency risks by 

covering expected liabilities wherever possible with investments 

in the corresponding currency. In order to make 

investment management as effective as possible, we also 

employ financial derivatives in order to hedge against 

fluctuations in interest rates and share prices. 

When applying this approach, we are aware of differences 

to the structure of our commitments and take account of 

the risk-bearing capacity and risk premium. At the same 

time, we of course comply with regulatory, accounting 

and tax requirements. Our aim is to guarantee maximum 

security, profitability and constant liquidity through appropriate 

mixing and spreading of investments. 

Taking account of the strategies developed in the strategic 

asset allocation department, the operating companies 

formulate mandates defining our investment categories, 

quality and limits. We also include key figures and threshold 

values for controlling purposes in these mandates. 

When investing, we consider social, ethical and ecological 

principles. Both our existing and new investments in shares 

and corporate, bank and government bonds must fulfil 

certain sustainability criteria. As such, we have primarily 

invested in the companies which are named on the Dow 

Jones Sustainability, FTSE 4 Good, ASPI and ESI lists, or 

which fulfil the criteria of rating agencies specialising in 

sustainability (e. g. oekom research). This continuous process 

is systematically applied and carried out by MEAG. We 

are of the firm opinion that for the long term, it is effective 

in terms of risk and profitability to consider sustainability 

criteria when making investments. 

Major developments and structure of 

investment categories 

At the end of the reporting year, our investments totalled 

€ 125 billion (117 bn) which is equivalent to a 6.9% rise. This 

amount includes € 6.0 billion (5.1 bn) (+ 17.0%) in investments 

for the account and at the risk of life insurance 

policyholders. The following information on the make-up of 

our investments relates to the investment portfolio, i. e. not 

including investments for the account or at the risk of life 

insurance policyholders. 

The vast majority of our investments is made up of fixedinterest 

securities, loans and short-term fixed-interest 

investments. We pay particular attention to the security 

of these investments. During the year under review, we 

sought to selectively reduce the number of government 

bonds in peripheral Eurozone countries. In an effort to 

spread our investment portfolio, we are increasingly investing 

outside the Eurozone. We add corporate bonds to 

increase the return. 

The duration until maturity of our bond portfolios increased 

slightly once again in 2012. It reflects the average duration 

of our capital commitments and stood at 7.8 (7.1) on the 

balance sheet cut-off date. 

Our entire portfolio of interest-bearing investments is still 

characterised by its good rating structure. This is described 

in more detail in the Notes to the consolidated financial 

statements from page 80 onwards. 

We use special hedging instruments for life insurance in 

order to reach the level of interest guaranteed to our customers 

in the face of persistently low interest rates. In so 

doing, we regularly adapt the maturities of our hedges to 

coincide with changes in cash flows from our insurance 

business. We include changes in the value of such derivatives 

in profit or loss in our IFRS accounting, i. e. as income 

or expenditure in our income statement.





Type of investments 2012 2011 

€ million € million 

Land and buildings, including buildings on third-party land 2,271 2,347 

Investments in affiliated companies and associates 528 544 

Loans 54,373 53,215 

Other securities 60,560 54,672 

Other investments 1,701 1,440 

Total 119,433 112,217 

Investments for the benefit of life insurance policyholders who bear the investment risk 5,957 5,092 

The focus of our stock portfolio remains on shares in the 

Euro Stoxx 50 index. As our investment policy is geared 

towards secure investments, only a small proportion, 

€ 3.8 billion (2.9 bn), of our investments is to be found 

in shares. This figure includes shares in associated and 

affiliated companies. The value of our property portfolio 

amounted to an unchanged € 2.8 billion on the balance 

sheet cut-off date. 

Valuation reserves 

Capital market trends have a direct effect on our unrealised 

gains and losses as well as off-balance-sheet valuation 

reserves. 2012 saw interest rates continue to fall on the 

most creditworthy investments and share prices rise which 

led to increases in both our balance-sheet and off-balancesheet 

valuation reserves. 

The net value of unrealised gains and losses on non-fixedinterest 

securities calculated at market value rose in the 

year under review to € 0.3 billion (€ 0.1 bn). The main contributors 

to this are shares and investment funds. Risk-free 

interest rates at the end of 2012 were well down on those 

at the end of the previous year. At the same time, risk surcharges 

on government bonds from some Eurozone countries 

fell. As a result, the net value of unrealised gains and 

losses from our fixed-interest securities in the “available 

for sale” category rose sharply to € 4.8 billion (€ 0.9 bn). 

We record loans at amortised cost. The valuation reserves 

on these items rose to € 8.8 billion (€ 3.6 bn). Overall, our 

off-balance-sheet valuation reserves increased to € 10.0 billion 

(€ 4.9 bn). 

Investments 

Our investment in the expansion of our business in Asia 

continued in 2012. We are actively pursuing the set-up of 

our joint venture in China; the life insurer is likely to commence 

operations in 2013 once the final licence has been 

received from the public authorities. And we signed a contract 

in India with the business conglomerate Avantha to 

set up a joint venture in the life insurance segment too. 

These investments have been funded using capital from 

normal operations. 

Analysis of the cash flow statement 

The cash flow of the ERGO Group is highly dependent on 

our business as a primary insurer: we generally receive the 

premiums for taking on the risk first, and then make payments 

at a later date in the event of benefits or claims. 

The significance of the capital flow statement is therefore 

somewhat limited. 

The cash flow statement (see page 54) was prepared in 

line with the indirect method and has been adjusted for 

changes in the consolidated group as well as exchange 

rate effects. 

The inflow of funds from operating business stood at 

€ 3.7 billion (1.9 bn). The calculation is based on the consolidated 

result of € 289 million (349 m). The major changes 

to the items Change in technical provisions (€+ 1.5 bn), 

Gains/losses on the disposal of investments (€+ 0.7 bn) and 

Other non-cash income and expenses (€− 2.3 bn) mainly





stem from factors of influence on the investment side. 

Consequently, the improved investment income and the 

increase in valuation reserves had a corresponding impact 

on the provision for premium refunds and provisions for 

unit-linked life insurance. The cash flow from operating 

activities was dramatically affected by gains from the 

disposal of affiliated companies last year. It is mainly 

write-downs and write-ups on investments which are 

reflected in other non-cash income and expenses; there 

were high write-downs last year whereas the year under 

review was particularly dominated by higher unrealised 

gains in unit-linked life insurance. 

The other two items worthy of mention are the change in 

other receivables and liabilities (€+ 1.3 bn) and the change 

in other balance sheet items (€+ 0.7 bn). The former was 

dominated by the previous year’s effect: in 2011 short-term 

loans from Munich Re expired which formed part of the 

restructuring of our debt capital. Factors which resulted in 

the change in other balance sheet items include reserves 

for the reorganisation of our sales forces as well as the 

increase in pension provisions because we had reduced the 

technical rate of interest. 

The cash outflow from investing activities of € 3.5 billion 

(€ 2.7 bn) is generally determined by payments for 

the acquisition of other investments or investments in 

unit-linked life insurance; they amounted to € 3.15 billion 

(3.14 bn) and € 362 million (489 m) respectively. In addition, 

last year saw cash inflows of € 951 million following 

the sale of affiliated companies; this item only accounted 

for € 12 million in the reporting period. 

Last year the cash flow stemming from financing activities 

was dominated by the restructuring of subordinated 

loans from Munich Re and high dividend payments during 

the 2010 financial year. Overall, there was a cash outflow 

stemming from financing activities of € 80 million (cash 

inflow of € 297 m). 

Overall, the level of cash and cash equivalents, which 

covers operating balances with banks, cheques and cash 

in hand, rose in 2012 to € 1.1 billion (0.9 bn).



27 


Other success factors 

We also intend to secure long-term economic success for 

our Group with factors which cannot always be measured 

using financial variables. We take corporate responsibility 

very seriously in regard to our customers, staff and sales 

partners, as well as the environment and the society we 

live and work in. 

We therefore conduct business sustainably, seeking to 

reconcile economic, environmental and social factors. This 

corresponds with the long-term nature of our business. 

As part of Munich Re, we were among the first companies 

to sign the United Nations Environment Programme 

Finance Initiative’s Principles for Sustainable Insurance. 

These principles were presented at the UN Conference on 

Sustain able Development in Rio de Janeiro in June 2012 

and provide us with guidance on how to take sustainability 

criteria into account in our core business. 

In 2012, we significantly expanded our reporting on 

corporate responsibility at ERGO. Having introduced our 

comprehensive web pages at the beginning of the year, 

we then published our first Sustainability Report in autumn. 

The report describes how we understand our responsibility 

to our customers, staff, the environment and society. 

A comprehensive facts and figures section shows the 

current progress of our activities. Our Sustainability Report 

was audited in accordance with the Global Reporting 

Initiative (GRI) and will appear annually in future. 

Responsible management 

Clear rules on the conduct of staff and sales partners 

are essential to strengthening public trust in ERGO and 

preventing damage to our reputation. After serious cases 

of misconduct were brought to light in 2011, we set up a 

separate Compliance Unit at the beginning of 2012, directly 

answerable to the Chairman of the Board, and expanded 

it step by step throughout the year. Our Chief Compliance 

Officer leads the team in developing guidelines and advising 

staff and sales partners on how to implement them 

properly. If an employee or sales partner suspects abuse 

or serious breaches of the guidelines, he or she may also 

inform an external ombudsman. 

Negative reporting took its toll on ERGO’s reputation once 

more in 2012. The media made agents’ misconduct on 

incentive trips a topic of discussion. We had to face the 

accusation that we had not addressed the issue openly 

enough in 2011 and therefore lacked credibility. In order to 

regain this lost trust, we provided transparency in September 

2012 by publishing all known cases of misconduct on 

incentive trips on the Internet alongside the consequences 

drawn and the disciplinary measures ERGO had taken. We 

also updated the results of published investigations of 

allegations concerning the insurance business. 

We hope to regain lost trust with our openness. We also 

aim to convince both our customers and the general public 

of our quality through consistent implementation of our 

brand promise, “To insure is to understand”, and through 

first-class service. 

Customers and customer relationships 

Our products and services are geared towards all customer 

groups – private customers as well as small and mediumsized 

businesses and industrial clients. ERGO offers them 

products and services for old-age provision and saving 

schemes as well as protection of property, health, legal 

cover and travel insurance. In addition, our sales partners 

sell fund products supplied by MEAG, which is the asset 

manager of Munich Re and ERGO. We also offer bank products 

from our cooperation partner UniCredit Group and 

other banks. Other partners’ products and our comprehensive 

services and advice complete our portfolio. 

Our brand promise, “To insure is to understand”, means we 

make our customers and their needs the focal point of our 

business. We highly value clear and easy-to-understand 

language and constant dialogue with our customers. We 

have clear-language criteria which have been verified by 

external experts in communication. Based on these criteria,





we are reviewing our entire communication with our 

customers and are training our staff accordingly. Our 

Company is pursuing easy-to-understand, clear communication 

and its full integration into all our processes at 

all times. We successfully submitted all of our customer 

communication to an external audit: The inspection 

agency TÜV Saarland awarded us their seal of “Comprehensible 

communication” in February 2013. 

Our customers’ opinions are important to us. By expressing 

their wishes regarding our products and services, our 

customers help us continually improve what we offer. 

For example, we launched our new accident insurance in 

2012, developed according to our customers’ requests and 

expectations, and included assistance services in certain 

products. These services vary according to the customer’s 

individual situation and how serious their injury is. Our 

continuous advice service helps and guides victims of 

accidents. We also carried out comprehensive studies on 

our customers’ expectations in terms of security, flexibility 

and earnings in order to develop ERGO’s latest generation 

of life insurance products, which will be launched in 2013. 

As members of our Customer Advisory Board, participants 

in our Customer Workshop or on the Internet, consumers 

can provide us with extensive feedback. In the case of 

conflicts which the customer does not consider to have 

been solved by the Company, the ERGO Customer Advocate 

is available to clear up misunderstandings. He represents 

the interests of our customers within the Company. 

Our sales partners place great value on advice, support and 

service – and not just during their sales pitch. We set great 

store by the quality of our advice and see ourselves as an 

all-round problem solver for our customers long after the 

contract has been signed. 

Staff 

Our staff provide the basis for our success with their 

expertise, motivation and commitment, which is why we 

are dedicated to investing in developing their skills. 

The diversity of our staff is visible in their different mindsets, 

attitudes, experience, knowledge and skills. This is a 

great asset to our Company and an important foundation 

for our future success as a business. We laid down our 

common goal in Munich Re’s Diversity Policy in 2011: a 

working environment that values this diversity, promotes 

its various aspects and emphasises it for the good of the 

Company. 

We are always looking to develop our initiatives further. 

For example, in 2012 we reintroduced our development 

and mentoring programme for women and started a new 

HR process to guide employees through maternity/paternity 

leave. As part of our efforts to improve the balance 

between work and family life, we are currently running 

a pilot project to test the feasibility of managers working 

part time. Our diversity seminar for trainees won the 

InnoWard 2012, the prize for education in the German 

insurance industry. 

Our management mission statement describes the 

conduct we expect of people with management 

responsibilities at ERGO. This includes valuing employees, 

using straightforward language, clearly defining goals, 

demonstrating enthusiasm and a willingness to participate 

in dialogue. This mission statement is a permanent 

feature of our training programme for managers. We have 

standardised the process of selecting, developing and 

supporting our top management staff across the Group. 

With cross-sector talent management and Group-wide 

succession planning, we wish to develop outstanding 

managers with a degree of loyalty that binds them to the 

Company. 

Ensuring that our staff and sales partners have qualifications 

which meet the needs of our industry still has a 

high priority in the context of our HR policy. Our goal is to 

extend our high level of quality and performance in order 

to reinforce our competitive position even further. This 

is why we are constantly adapting all of our training and 

further education opportunities to meet the Company’s 

current and future requirements for qualified and motivated 

long-term employees. 

In 2012, members of the ERGO Insurance Group and its 

agencies in Germany trained 1,485 (1,551) school leavers, 

which is equivalent to a ratio of trainees to total working 

staff on par with the previous year at 6.5%. A special 

international trainee programme promotes the hiring and 

development of university graduates.





ERGO launched a quality and efficiency programme in its 

German sales organisations in 2012. We wish to standardise 

the different advisory and support processes and provide 

technical support, reduce complexity and cut costs. In 

order to achieve this goal, we shall merge – under a single 

ERGO sales company – five tied agents’ sales organisations 

into two units. 

As we have already announced, this restructuring will 

result in the loss of up to 700 salaried sales posts and up 

to 650 in-house posts in Germany. This is a consequence 

of streamlining the sales forces down to 120 regional head 

offices and of the realignment of the supporting in-house 

units. We plan to implement this by the beginning of 2014 

and do it in a socially acceptable way. The management 

and the works councils agreed on how to proceed and a 

contingency programme in February 2013. 

At the end of the reporting year there were 29,768 (31,311) 

salaried employees working for the ERGO Insurance Group, 

of which 24,166 (25,352) were employed in in-house 

positions and 5,602 (5,959) were salaried field sales staff. 

The average age of our employees is 41.3 (40.6), and the 

average length of service 12.2 (11.4) years. The percentage 

of women stood at 56.9% (56.4%). 

Social commitment 

ERGO and its subsidiaries have been committed to the 

communities we work in for years. Today, we focus on 

sponsoring all kinds of education and support social projects. 

Music, sport and health education all contribute to 

personal development and are therefore important components 

of a good education. We particularly want to open 

up opportunities and future prospects for children and 

teenagers, and allow them to take responsibility for their 

own lives. 

We want our social commitment to education to contribute 

to the future viability of our society. For example, the ERGO 

“Jugend & Zukunft” (Youth and Future) foundation advises 

socially disadvantaged teenagers on the transition from 

school to training and work. ERGO Austria promotes learning 

and tutoring for children from disadvantaged families 

by donating to the “Wiener Lerntafel” (Vienna educational 

charity). We also support projects and initiatives which use 

innovative concepts to improve education for children and 

young people. 

We foster children’s musical skills as well as talented 

youngsters. For example, we support the local Düsseldorf 

project, “SingPause”, where trained singers regularly sing 

with primary school pupils. As part of the “Klasse in Sport” 

(Great at Sports) initiative, we sponsor daily qualified 

physical education at 26 primary schools across Germany 

because sport has been proven to aid children’s physical 

and cognitive development. The focus of our health projects 

is on prevention, education and exercise. For example, 

ERGO provides “mammobuses” in Estonia to provide 

women with information about breast cancer and free 

screening (mammography). 

As a large company, we are able to help others who need 

support, and we are happy to do so because it is a longstanding 

tradition within our Company. One example of 

social commitment is our integration of disabled employees, 

such as at ERGO Hestia in Poland, where employees 

with physical disabilities advise customers over the phone 

in the customer services department. In Germany, D.A.S. 

collaborates with a company specialising in the integration 

of disabled staff. This helps severely disabled employees to 

establish themselves in the business world with qualified 

administrative tasks. Our staff, too, are committed to helping 

others: for example, in Germany, the staff charitable 

association “ergo:wir helfen” (Ergo: we help) supports various 

social projects by donating the portion of salaries or 

commissions that comes after the decimal point. 

Environment 

Protecting the environment and natural sources of life has 

been an important concern for ERGO for many years, and 

we see it as being part and parcel of our social responsibility. 

In parts of the Group, we have been using an environment 

management system which complies with the globally 

accepted ISO 14001 standard for over ten years and 

we have it assessed by external experts on a regular basis. 

To ensure we use energy and resources as efficiently as 

possible, we are continually expanding this system: Munich 

was another large-scale German office to be certified in 

2012. ERGO uses the environment management system to 

consistently and systematically assess and minimise the 

use of energy and resources and the production of waste in 

its offices. 

We invest in the use of energy-efficient technologies such 

as gas-powered combined heat and power plants and 

cutting-edge cooling systems. We have been using carbonneutral 

electricity at all of our major German offices since 

2011.





We also wish to reduce the emissions caused by our business 

travel. Train journeys within Germany have been carbon 

neutral since 2011. We are also gradually including more 

low-emission vehicles in our fleet and encourage our drivers 

to drive in an environmentally friendly manner: As of 2012, 

ecological and safety training is obligatory for all drivers of 

fleet vehicles. We are working to improve our environmental 

record at our other offices in Germany and abroad. Our goal: 

by the end of 2015, operations across the entire ERGO Group 

should be climate-neutral. 

As part of our duties imposed by the United Nations 

“Global Compact” environmental initiative, which ERGO 

as part of Munich Re has signed, we regularly check our 

potential for improvement, including synergy effects. 

We continue to collect more and more data from our 

international companies, with the goal of providing ever 

more comprehensive environmental data. As part of the 

“Global Compact” initiative, Munich Re publishes an annual 

progress report on its website, which also covers developments 

at ERGO. 

Renewable energy is growing ever more significant due to 

the fact that fossil fuels are limited and the demand for 

environmental and climate protection is on the rise. ERGO 

is doing its part by offering innovative insurance solutions, 

including those that cover loss of income from underperforming 

photovoltaic systems due to limited radiation 

or faulty components. We also support the environmental 

awareness of our customers with sustainable products 

and investment funds. When it comes to motor insurance, 

we promote vehicles with exceptionally low CO 2 

emissions 

through an eco tariff. We advise our corporate customers 

on how to avoid environmental damage, for which we also 

offer cover. As regards life insurance, our customers can 

invest in sustainable funds and a climate fund for their 

old-age provision and saving schemes.



31 


Risk report 

Objectives of risk management 

Risk management is an important element of corporate 

management. One part of risk management is the early 

recognition of developments which could endanger the 

Company’s existence (Section 91, para. 2 of the German 

Stock Companies Act, AktG). An additional aim is to retain 

the financial strength required to meet our obligations to 

customers and to create sustainable value for our shareholders. 

Another goal is to safeguard ERGO’s reputation 

and that of all the individual companies. This is achieved by 

means of risk management that encompasses all divisions. 

In this respect, we adhere to the German Control and 

Transparency Law (KonTraG) as well as to the requirements 

of Section 64a of the German Insurance Supervision Act 

(VAG). 

Organisational set-up of risk management 

ERGO Insurance Group has developed specific systems and 

committees to ensure efficient risk management. The term 

‘risk governance’ is used to refer to all organisations and 

principles to do with risk. This is how we encourage the 

preservation and further development of a balanced riskand-control 

culture in respect to all categories of risk. Our 

Integrated Risk Management (IRM) unit is charged with 

securing risk management across the Group. There are 

decentralised risk management structures in place to help 

the IRM unit with this. The Chief Risk Officer (CRO) is at the 

top of the risk management hierarchy, with various decentralised 

risk officers reporting to him. The duties of the 

CRO include the identification, assessment and monitoring 

of risks, as well as reporting them to the Risk Committee, 

which is a standing committee of ERGO Insurance Group’s 

Board of Management. The committee is responsible for 

setting up and monitoring risk management strategies, 

systems and processes. It also ensures that the entire 

risk management system, consisting of risk criteria, limits 

and governance processes, complies with the regulatory 

requirements and the guidelines applicable throughout the 

Group. This structure enables us to recognise risks early 

and to manage them actively. 

Risk strategy 

Our risk strategy is derived from our business strategy and 

presents the risks arising from it. The Board of Management 

checks and approves the risk strategy annually and 

discusses it with the Supervisory Board. Our risk strategy 

defines ERGO Insurance Group’s upper risk threshold as 

it contains specifications and decisions on risk tolerance 

which are geared towards the capital and liquidity available 

and earnings volatility. Risk strategy is an important 

basis for our operative and strategic planning. Moreover, 

we derive limits from it, which we monitor carefully. In 

order to derive these limits, we take into consideration 

criteria relating to the whole Company and our entire 

insurance portfolio, as well as defining supplementary 

criteria to limit and managing peak risks, concentrations, 

loss accumulation and systematic risks. 

Risk management is important not only for limiting risks, 

but also for making use of business opportunities. Calibrating, 

or fine-tuning, the limits set out in our risk strategy 

takes into account the interests of both our customers and 

our shareholders. The most important part of this is ensuring 

the strength of our financial resources. Then there are 

supplementary limits for particular risks, such as concentration 

limits for natural catastrophes or pandemic risks, 

and criteria for market, credit and liquidity risks. 

In the event of capital bottlenecks or conflicts with the 

limit system, fixed escalation and decision-making processes 

are pursued which ensure that business interests 

and risk management aspects are brought into line. Where 

appropriate, we take action to reduce the risk, using 

reinsurance for example. 

Risk management cycle 

Risk management in an operational environment includes 

the identification, analysis, assessment and measurement 

of risks. Aspects of this include the reports on these areas 

of risk, limiting risk in the sense of reducing it to an acceptable 

amount, and monitoring risk.




Risk report 

Our risk management processes ensure we monitor all 

risks on an ongoing basis and actively manage them 

wherever necessary. 

Risk identification: Suitable systems and quantitative 

indicators are used to (quantitative component). Bottomup 

and top-down risk surveying are also used and supplemented 

by expert opinions (qualitative component). Our 

ad-hoc reporting process enables employees of the ERGO 

Insurance Group to report risks to the central IRM unit at 

any time. 

Risk analysis and assessment at the highest level are 

the responsibility of the central IRM unit. They are carried 

out in close collaboration with many experts from different 

parts of the ERGO Insurance Group. This enables us to 

obtain an assessment that is both quantitative and qualitative, 

and which also takes into account possible interdependencies 

between the risks. 

In order to measure risk, we use specific instruments for 

each business segment, which we constantly continue to 

develop. Our primary risk measures are based on economic 

principles and therefore best reflect the risk in our portfolio. 

Our risk model results are regularly checked against 

those of the regulatory bodies and rating agencies. This 

takes place at various levels such as the different business 

segments, companies, types of risk, geographical locations 

and business lines. 

We regularly compare our risk model results to those of 

other businesses and take part in industry surveys to test 

our instruments and fine-tune them further. In addition, 

we also compare our model with the latest capital requirements 

of Solvency II and participate in industry-wide 

quantitative impact studies. 

Risk limitation is part of our risk strategy and included in 

the ‘limit and trigger manual’ used throughout the Group. 

Risk-reducing measures are decided and implemented on 

the basis of the defined upper risk threshold. 

We differentiate between quantitative and qualitative 

indicators when monitoring risk. Quantitative indicators 

are monitored centrally, whilst qualitative measures are 

monitored both centrally and locally according to the size 

and category of the risk. 

Control and monitoring systems 

In 2012, we developed our internal risk control system 

(IKS) further with the particular aim of including more of 

our subsidiaries abroad. Our IKS is a uniform operational 

risk management system applicable throughout the Group. 

It includes Group management requirements as well local 

legal and regulatory requirements. The Board of Management 

is responsible for the IKS and, structurally, it falls into 

the responsibility of the IRM unit. Responsibility for individual 

risks and controls lie with the relevant experts and 

employees in the various units. By incorporating staff in 

this way, we have reinforced the basis for a uniform understanding 

of risk within the Group and have improved our 

awareness of risk and how to control it. 

The holistic management approach of the IKS means that 

we can achieve a rise in efficacy and efficiency in identifying, 

analysing, assessing and documenting major risks and 

key controlling aspects. The clear allocation of responsibilities 

for aspects of risk and its control and management 

creates transparency. By systematically linking major 

risks and processes, a risk map has been developed for 

ERGO Insurance Group which indicates all the relevant 

risk checkpoints. 

The efficacy of the IKS in major processes and applications 

is regularly assessed by the Group’s internal auditors as 

part of audit planning over several years. 

Risk reporting 

We do not just fulfil current legal requirements with our 

risk reporting. We use it to create transparency within 

the Group for management and supervisory bodies, and 

to inform the public of our operations. The IRM unit is 

responsible for our risk reporting. 

Internal risk reporting informs management of the risk situation 

in terms of the individual risk categories quarterly. 

If a significant change in the risk situation occurs, or an 

exceptional event or case of damage, a report is written 

and delivered to the management immediately so that they 

can react to dangerous developments quickly. Our aim is to 

be able to recognise even weak signals and negative trends 

quickly and take appropriate countermeasures.




Risk report 

Our external risk reporting is aimed at providing a comprehensible 

insight into ERGO’s risk situation. This includes 

information on our risk management methods and processes, 

risk governance and specific risks affecting the 

Company. 

Major risks 

We deem major risks as those which can have a permanent 

negative impact on the whole of ERGO Group’s assets, 

financial situation or profitability. This definition has been 

strictly applied – taking individual risk tolerance into consideration 

– to individual business segments and legal 

entities. It is our IRM unit which makes the final decision 

on whether a risk be considered major for a particular 

entity. In order to do this, the team takes particular note 

of how the risks could affect our financial strength and 

earnings volatility, as these are our principal criteria. 

This risk report is then drawn up based on the calculations 

and accounting principles used by our Company. We are 

fully compliant with the German Accounting Standard 

DRS 5−20. 

As set out by the DRS 5−20, we divide our overall risk into 

five categories: 

• Technical risks 

• Risks from default on receivables 

from insurance business 

• Investment risks 

• Operational risks 

• Other risks 

Technical risks 

Management of technical risks takes a central role. The 

key elements of this include checking risk patterns and 

continually monitoring accounting principles for the 

purpose of calculating technical provisions. Premiums and 

reserves are calculated using carefully selected accounting 

principles. 

We underwrite insurance for private and corporate clients, 

which results in a heterogeneous portfolio of risks incurred. 

Each line of business and business division has its own 

general parameters for calculating tariffs and underwriting 

at individual company level in order to ensure a balanced 

portfolio among all those insured. Each actuarial office 

ensures that the calculation of tariffs is carried out properly 

and that sufficient provisions are set up to meet any 

obligation incurred. 

These measures and processes mean that the risks 

incurred in the business undertaken by our companies are 

managed adequately. We regularly use processes separate 

from those mentioned above in order to measure their 

suitability, and where appropriate, we adapt them further. 

However carefully we calculate our tariffs, and despite 

more-than-adequate reserves by current standards, further 

risks may arise. We monitor these new risks continually in 

order to limit them. This way, we are able to take appropriate 

countermeasures in good time when the level of risk 

increases. Further risks may include, for instance, the ERGO 

Insurance Group in its entirety or individual operational 

insurance companies experiencing exceptionally high 

levels of claims or due to an accumulation of loss-entailing 

occurrences. The interaction of risks of change and risk 

concentrations may also lead to considerable potential for 

losses. This not only involves regional concentrations but 

can also occur either within a line of business or across 

several lines. 

The IRM unit is in charge of identifying, assessing, monitoring 

and coordinating cumulative risks and concentrations 

which occur across multiple business segments and balance 

sheets. In order to do this, the IRM unit operates in close 

collaboration with specialists in the various business segments. 

It informs the risk committee of the consequences 

of risk cumulations across the entire Group. 

These types of risk are observed using scenarios and 

model calculations which are there to provide information 

regarding the maximum total liability of the ERGO Insurance 

Group based on a corresponding extreme scenario. 

To protect the Group from disproportionate liability and 

fluctuations in revenue we take out reinsurance. We take 

both the situation within the particular legal entity and 

integration within the Group into account when making 

these decisions. 

Good creditworthiness is our prime criterion when choosing 

our reinsurer. This allows us to limit the contingency risk 

and risks concerning cash flow fluctuations. Our outwards 

reinsurance is mainly placed within the Munich Re Group.




Risk report 

Life insurance Health insurance Property-casualty insurance 

Biometric risk Biometric risk Premium risk 

Interest-rate risk Lapse risk Large loss and cumulative loss risk 

Other market risk Claims risk Reserve risk 

Lapse risk Technical interest-rate risk Interest-rate risk 

The table above depicts the specific features of the underwriting 

risks in our operational insurance companies 

depending on the particular area of business. 

A differentiated analysis of the technical risks and relevant 

factors specific to the business segment in question, as 

well as explanations of their management, can be found 

in the Notes to the Consolidated Financial Statements 

from page 118. This complies with the requirements of the 

German Accounting Standard IFRS 4. 

Risks from default on receivables from 

insurance business 

Receivables from reinsurers, agents and customers are 

always subject to risk from default. In the case of nonpayment 

of premiums, the insurer experiences a high 

level of liability. This is particularly problematic in the case 

of comprehensive health insurance, since the insurer no 

longer has the right to terminate the contract. The total 

amount of premium instalments which have not been paid 

is constantly monitored according to several criteria in 

order to be able to recognise at an early stage whether it 

could lead to a relevant impairment or put a strain on all 

policyholders. 

On the balance sheet cut-off date, accounts receivable, 

where payment had been due for more than 90 days, 

accounted for € 320 million (244 m). To hedge the risk, we 

have taken precautionary measures by making adjustments 

to the value of receivables. Over the past three 

years, value adjustments have been made, amounting to 

an average of 10.4% (9.7%) of the existing receivables on 

the cut-off date. This share is equivalent to an average of 

0.8% (0.7%) of premiums earned over a period of three 

years. 

Experience has shown our precautionary measures to be 

adequate. 

41.3% (50.9%) of our accounts receivable stem from 

Munich Re, which have been awarded the second highest 

rating by the international rating agency Standard & 

Poor’s. Overall, and based on the rating classification 

from Standard & Poor’s, the spread of receivables from 

reinsurers can be seen in the table below: 

Investment risks 

Investments undertaken by ERGO Insurance Group can be 

grouped into four investment categories: interest-bearing 

investments, shares, property and shareholdings. Besides 

the criteria of return, security and credit rating, aspects 

of liquidity, diversification and, above all, underwriting 

obligations are also taken into consideration. The assetliability 

teams (AL teams) are responsible for asset-liability 

manage ment. For every operational entity, members 

of these committees include representatives from the 

actuarial office, strategic asset allocation, investment 

control, the IRM unit and the asset management company 

MEAG, part of Munich Re. Basic investment decisions 

(strategic asset allocation) are taken at an individual 

company level. Mandates are then formulated by the 

ERGO investment management unit from these strategic 

directives, with MEAG acting in an advisory capacity. 

These mandates take into account tax, balance sheet and 

regulatory considerations and define investment categories, 

quality and thresholds. Moreover, key figures and 

threshold values for tax purposes are prescribed in the 

mandates. MEAG is responsible for putting these mandates 

into practice. The AL teams are in charge of monitoring 

the guidelines laid out in the mandates and advising on 

strategic investment decisions. 

Receivables from reinsurers according to rating classes 2012 2011 


Rating class 1 (AAA) − 2 

Rating class 2 (AA) 68 65 

Rating class 3 (A) 2 19 

Rating class 4 (BBB and less) − 1 

No rating 19 8 

Total 89 94




Risk report 

We monitor investments which we manage ourselves 

based on projections and internal reporting. These include 

property loans, mortgages, remortgages, policy loans, staff 

loans, loans to officials, deposits retained, surpluses from 

unit-linked life insurance policies and some shareholdings 

and property investments. This is also true for investments 

managed by MEAG. Any deviations from the projections are 

looked into by the AL team where deemed necessary. 

MEAG monitors compliance with the guidelines set out in 

our mandates for specific parts of the business on a daily 

basis using our comprehensive early-warning system. 

We have implemented triggers for the various sources of 

risk, whose activation initiates a predefined process. The 

trigger landscape, which is in operation throughout the 

Group, differentiates between three danger levels involving 

different measures. 

The levels are derived from the risk tolerance of the company 

in question. The early-warning system is supplemented 

by analyses of long-term trends and scenarios, 

particularly as regards interest-rate and share markets. 

Proactive risk management has enabled a considerable 

reduction in the adverse effects of the financial and 

national debt crises on the ERGO Insurance Group. Over 

the last couple of years, we have significantly reduced the 

percentage of investments our companies hold in equities. 

In 2012, these remained at the low levels recorded in previous 

years. Permanent monitoring of the risk of default by 

a contract partner is ensured by means of a Group-wide 

counterparty limit system. 

We continued to develop our risk management activities 

in the area of capital investments during 2012. Improvements 

in the way liquidity, market and credit risks are 

taken into account by our early-warning systems are once 

again of particular note. The counterparty risk due to overthe-counter 

derivatives has, in the past, been reduced by 

implementing collateral management. 

The following account of our capital investment risks 

complies with the German Accounting Standard IFRS 7. 

Our main capital investment risks are market, credit and 

liquidity risks. 

Market risks 

A market risk is defined as the risk of losses or adverse 

effects on the financial strength of a company as a result 

of price amendments and fluctuations on the capital 

markets. Market risks form the lion’s share of capital 

investment risks. Market risks include, among other things, 

the risk of changes to the interest rate and their consequences, 

share price risk, the risk of changes in property 

prices, exchange rate risk, asset-liability mismatch risk and 

the credit spread risk resulting from worsening creditworthiness. 

Causes of possible reductions in market value vary 

from investment category to investment category. 

Fluctuations in market price not only affect our capital 

investments, they also influence our underwriting 

liabilities. This is particularly noticeable in the case of life 

insurance. The fact that the interest rate is sometimes 

guaranteed for a longer period, and the numerous options 

which policyholders have with traditional life insurance 

policies result in a major dependence on the value of 

liabilities on the capital markets. 

Market risks are handled by applying appropriate limiting 

and early-warning systems as well as our asset-liability 

management. This is done by limiting the divergences of 

current investments from those which are economically 

necessary to cover underwriting liabilities, a so-called 

replicating portfolio. In addition, risk-relevant restrictions 

for investments are taken into account, which stem from 

accounting in line with the German Commercial Code (HGB) 

or IFRS. 

At 94.1% (94.1%), the majority of our investments are 

interest-bearing. Consequently, the development of 

general interest-rate levels and the issuer-specific credit 

spreads have a considerable effect on the value of the 

investments and investment income. To secure investment 

returns in the long term, our activities in asset-liability 

management are regularly adjusted in line with current 

market conditions. 

We are pursuing a defensive investment strategy due to 

the expected continuance of volatile developments on the 

market. Financial derivatives are used to extend the investment 

horizon for interest-bearing investments and the 

risks run by investing in the stock markets.




Risk report 

Up-to-date market values for property are not always 

available. Consequently, surveys or other appropriate and 

generally recognised and verified assessment procedures 

are necessary. Adjustments are made to figures insofar 

as value impairments are deemed to be of a permanent 

nature. 

Currency risks are mainly hedged using forward exchange 

transactions. Additional risks stem mainly from long-term 

investments where there are no adequate or economically 

viable hedging mechanisms available. We monitor these 

risks on a permanent basis to enable us to take action 

against developments in good time. Exchange rate gains 

or losses recorded in accordance with IFRS are calculated 

by separating the change in market value in the original 

currency on the one hand and the effects of the exchange 

rate written against the income statement on the other. 

Potential risks due to fluctuations in the market value 

of investments are regularly assessed using so-called 

stress tests. These stress tests take into account blanket 

fluctuations in the market value of interest-bearing investments, 

shares and currencies. An example of a scenario 

analysis is in the Notes under “Market risks from financial 

instruments”. 

A host of other tools are also used to determine the 

potential market risk. In particular, a forecast is made 

of investment income on the next balance sheet cut-off 

date subject to changing capital market conditions. Based 

on the rating and quality of our investments, we do not 

see recognisable threats to the existence of the ERGO 

Insurance Group or its obligations to its policyholders. 

Credit risk 

Credit risks stem from the danger that debtors are unable 

to keep up with their payment obligations or that deteriorations 

in creditworthiness lead to economic losses. 

As regards our fixed-interest investments, we keep the 

associated credit risk in check by choosing issuers of 

adequate quality and taking note of the contracting 

party’s limits. The rating undertaken by external rating 

agencies is only one of a number of risk criteria taken into 

account. We also conduct our own analyses, and issuers’ 

ratings undergo an internal plausibility test. Both our own 

assessment and that of the external rating agency have 

to be positive for an investment to pass the risk appraisal 

procedure. The high demands we make of our issuers are 

reflected in our investment principles, which are applicable 

throughout the Group. Our securities portfolio is distinguished 

by the fact that most of the securities are from 

issuers of outstanding creditworthiness. 

88.3% (91.0%) of our interest-bearing investments received 

at least the third-highest rating available, “strong”, at the 

end of the financial year. See also sections [6g] to [6i] in 

the Notes. As a comparison, this is equivalent to an “A” 

rating from Standard & Poor’s. The table below shows how 

this is spread across the different types of securities. 

The diversification of ERGO Insurance Group’s investments 

is deemed adequate. The risk of default on fixed-interest 

investments increases in proportion to a decrease in the 

debtor’s creditworthiness. Debtors of low creditworthiness 

must therefore offer a higher coupon or level of interest 

to remain attractive despite the risk of default. Our risk 

manage ment strategy features appropriate trigger calculations 

to deal with the risk of a decrease in creditworthiness. 

The majority of our interest-bearing investments are 

securities not listed on the stock market. We determine 

the market value of these securities using yield curves and 

taking into account cautious credit spreads specific to the 

issuer. In the case of stock-listed interest-bearing investments, 

we use official rates. 

We have implemented a counterparty limit system throughout 

the Group in order to monitor and manage the risk 

Bonds portfolio according to individual categories Share in all Rating at least 

(31 December 2012) interest-bearing investments % category “strong” % 1 

Bank bonds/loans against promissory notes 7.5 53.8 

Covered bonds/pfandbriefs 40.6 98.5 

Government bonds 40.0 88.7 

Corporate bonds 5.6 49.4 

Other 6.2 96.4 

1 This is equivalent to an “A” rating from Standard & Poor’s.




Risk report 

of default. The contracting party’s limits depend on their 

financial situation and the level of risk tolerance defined by 

the Board of Management. We coped with the critical situation 

of the banks and government bonds during the 2012 

financial year by continually checking the upper thresholds 

of our limits and reducing certain limits and implementing 

collateral management. In 2012, we made further progress 

with the project we started in 2011 aiming at trading OTC 

derivatives via a central independent party. This project is 

based on a European Parliamentary regulation, the European 

Market Infrastructure Regulation (EMIR), and once 

the general regulatory conditions have been finalised, we 

expect to be able to start doing business in 2013. Our overall 

exposure in the financial sector – measured at market 

values – amounted to € 63.6 bn at the end of the financial 

year, of which € 54.9 bn (86.3%) is collateralised. 

We continually monitor the subordinate securities, 

dormant equity holdings and profit participation certificates 

in our portfolio for risk-control purposes. 

Our investments in peripheral Eurozone countries with 

high levels of national debt (Ireland, Italy, Spain) amount 

to 3.6% of our total investments. We reduced our involvement 

in the peripheral Eurozone countries further in 2012, 

and totally withdrew from Greece and Portugal. The euro 

national debt crisis is expected to continue in 2013 even 

though the battery of political countermeasures has 

increased and the European Central Bank has introduced 

new instruments. Yet the critical situation in certain countries, 

particularly around the Mediterranean, continues to 

worsen. Budget consolidation, recession and high unemployment 

are testing the political will and the ability of 

nations to react to countermeasures. 

The following table shows the market and par value 

distribution of our exposure to government bonds in 

certain countries. 

We wrote down the value of our interest-bearing 

investments by € 14 m in the year under review, which is 

equivalent to 0.01% of total investments. 

Liquidity risks 

We must be in a position to meet our payment obligations 

at all times. This is ensured by our detailed liquidity 

planning. We use our asset-liability management to control 

cash flows from our investment portfolio and receipt of 

premiums in terms of time and quantity. This means they 

are sufficient to meet the liabilities incurred by our insurance 

contracts. In addition, we maintain a liquidity reserve. 

This protects us from unexpected liquidity bottlenecks, 

such as a sudden increase in cancellations. Liquidity risks 

are integrated into our control and limit system, which we 

update annually. 

Major hedging operations 

At ERGO Insurance Group, we mainly use financial derivatives 

to hedge market risks to our capital investments. The 

main risks in this area are interest-rate fluctuations and 

currency risks. We use our risk management system intensively 

to counter these, and, as already mentioned, use 

financial derivatives too. 

A permanently low interest rate brings with it the risk that 

outflows must be reinvested at a lower rate of interest. We 

cope with this reinvestment risk by continually developing 

our hedging strategies using derivatives. For companies 

offering personal insurance, we thus have a minimum 

reinvest ment interest rate in the case of falling interest 

rates. This is an important aspect of ensuring that we are 

able to fulfil our technical payment obligations in the long 

term. Since the low interest period is still ongoing, the interest 

yield on reinvestments made in 2012 benefited again 

from these hedging operations. According to the balance 

sheet requirements of the respective financial instruments, 

fluctuations in market values are either recorded in the 

revaluation reserve or the income statement. 

Government bonds and government-guaranteed securities - 

selected countries (31 December 2012) 

Fair values 

€ million 

Carrying amounts 

€ million 

Portugal – – 

Republic of Ireland 1,084 1,025 

Italy 2,552 2,520 

Greece – – 

Spain 973 1,298




Risk report 

We mainly hedge the risk of exchange rate fluctuations to 

capital investments in foreign currencies using derivatives. 

We monitor these financial derivatives using a trigger 

system on the one hand, and they also form part of the 

qualitative components of the risk controlling of the ERGO 

Insurance Group’s investments and financial participations. 

This is the context in which we appraise the market, credit 

and liquidity risks. We use our counterparty limit system to 

monitor the issuer risk. The counterparty risk arising from 

the products is spread across several creditworthy issuers. 

We reduce this risk further by depositing covered bonds 

(pfandbriefs) as collateral. In addition, we reach agreements 

with the counterparties on collateral management, 

thus protecting claims from business based on derivatives. 

These hedging operations are fulfilling their role. We are 

not currently aware of any major risks posed by the hedging 

operations themselves. 

Operational risks 

The ERGO Insurance Group considers operational risks as 

risks of losses associated with inappropriate procedures, 

technological breakdowns, human error or external events. 

We minimise these risks using systematic risk management 

aimed at their causes. It is one of the goals we as a 

Company have declared and consistently pursue to sensitise 

our staff to possible risks and therefore establish a 

certain risk culture. 

HR risks could include bottlenecking of staff. We reduce 

this risk using measures including HR advertising, tests to 

measure employees’ potential, human resources development 

and systematic succession planning. We use modern 

management tools and adequate monetary and nonmonetary 

incentives to motivate our staff. 

Companies are under increasing threat from white-collar 

crime (fraud). Our code of conduct sets out the rules and 

principles for correct and responsible behaviour. This code 

is valid for all legal representatives, managers and other 

staff. 

We have a separate code of conduct for our self-employed 

agents in Germany. In addition, all ERGO businesses 

in Germany and abroad have rules and principles for 

adequate and effective fraud prevention, detection and 

response. In cases of serious fraud, there is a special 

process to report this to the ERGO Fraud Prevention Officer. 

The number of reported cases of fraud in Germany and 

abroad shows our increasing sensitivity in this area as well 

as progress in our ever more consistent treatment and 

sanctioning of these occurrences. At least once a quarter, 

a report is submitted to the ERGO Board of Management 

and one to the ERGO Supervisory Board’s audit committee 

every six months. 

Due to the extent to which information technology (IT) 

systems have become vital to our work, we are also 

exposed to IT risks, particularly system failures and interruptions 

in service, the loss of data and external hacking. 

We combat these risks with a comprehensive system of 

precautionary measures, such as plans for emergencies, 

back-up solutions and controlled access. Management of 

our IT systems and the risks associated with them is the 

responsibility of ITERGO, a member of the ERGO Insurance 

Group. 

The implementation of crisis management as a major part 

of our business continuity management is practically complete. 

We are continuing to developing this by implementing 

training and practice measures. We are developing 

emergency and recovery plans for the processes necessary 

to ERGO’s business and integrating them into the local 

emergency plans.




Risk report 

Other risks 

Changes to law and regulations 

Changes to law and regulations can have a substantial 

impact on the Company. Over the course of time, these 

changes result in opportunities as well as risks, which is 

why we constantly monitor these developments. Furthermore, 

risks are addressed by being actively involved in 

industry bodies and committees. 

An example of a particularly significant change in law is 

the European Court of Justice’s (ECJ) verdict of 1 March 

2011 on the subject of price differences based on gender 

in insurance. On the basis of this, the court repealed the 

ruling permitting Member States to allow differentiated 

pricing of insurance products and premiums according to 

gender as of 21 December 2012. This also applies if the 

differences come from a valid calculation of risk, based 

on accurate and relevant mathematical and statistical 

insurance data. The Member States’ laws on this, including 

Germany’s, must be altered to accommodate the new 

ruling. This verdict means considerable changes to how the 

prices of insurance products and premiums are calculated. 

The actuary in charge considers the risks arising from the 

changes to actuarial practice to have been sufficiently 

contained or eliminated through our actuarial analysis and 

application of the German Actuarial Association’s (DAV) 

advice. Even following the successful implementation of 

the gender verdict, a change in the gender make-up of our 

customer base could still change our technical risk. We 

limit this risk using conservative calculations and actuarial 

analyses. We reduce the technical interest rate risk in the 

long term by using a technical interest rate which stands at 

2.75% for the new unisex tariffs, meaning that ERGO is not 

exposed to any further risks from the unisex tariffs. 

One of the sociopolitical risks we face is national health 

insurance (“Bürgerversicherung”), which is a threat to 

private health insurance. By introducing compulsory public 

health insurance for all, such a national health insurance 

scheme would, at the very least, put an end to new business 

in comprehensive health insurance. Obstacles posed 

by the constitution are likely to prevent current holders 

of private health insurance from being required to join 

the public scheme. We have been monitoring this risk for 

several years and have publicly spoken out about the disadvantages 

of implementing such a system. Equivalent 

proposals have been made in the area of long-term 

nursing care insurance. 

Individual court verdicts may be legally binding for our 

companies and affect our reputation. We assess the possible 

outcomes of ongoing processes and their impact on 

our obligations in realtime. If potential monetary obligations 

are identified, we react to these immediately using 

appropriate provisions. 

The progress of the European Union’s Solvency II project 

was one of the reasons that future regulatory requirements 

became somewhat clearer in 2012, although they still hold 

some major uncertainties, particularly in respect to the 

implementation timeframe. The developments laid out in 

Pillar 1 of Solvency II have already advanced a long way, 

with the exception of the central aspect of the assessment 

of technical liabilities. The issues which have not yet been 

decided upon are ones with far-reaching consequences for 

capitalisation under Solvency II, particularly on life insurance. 

This results in the risk that our life insurance businesses 

may not be able to fulfil their capital requirements. 

We expect further substantiation of transition deadlines 

from Solvency I to Solvency II and the future powers of the 

EIOPA when the Omnibus II Directive is adopted. Before 

this takes place, a European study of the effects of Omnibus 

II on policyholders, regulatory bodies and insurance 

companies (long-term guarantee assessment) is due to be 

carried out. The current plan is to integrate the Solvency II 

regime into national law by mid− 2013 and for it to come 

into force from 2014. However, further delays are to be 

expected, possibly several years beyond 2014.




Risk report 

The implementation of Solvency II on a national level will 

also alter German regulatory laws. We are continually 

monitoring the amendment process of the German Insurance 

Supervision Act (VAG) to incorporate the requirements 

of Solvency II, which began in the middle of the second 

quarter in 2011 and has been suspended at present. The 

reason for this is that the Solvency II project is still running 

and there are still decisions to be made at a European level. 

This means that the final integration into national law still 

poses some uncertainties. 

The German Parliamentary Finance Committee has however 

decided to integrate certain parts of the updates 

to the VAG into the Accompanying Act to the SEPA Bank 

Transfer Act (‘SEPA-Begleitgesetz’). These topics include: 

• Implementation of the ECJ’s ruling on unisex tariffs 

• Adjustment of the rules on participation in 

valuation reserves 

• Partial collectivisation of provisions for premium refunds 

• Extension of the time period allowed in which to transfer 

the undetermined provisions for premium refunds 

from free assets to tied assets 

The German Upper House (Bundesrat) has referred the 

Accompanying Act to the SEPA Bank Transfer Act to the 

Conciliation Committee. It is currently very doubtful as to 

whether this act will be implemented in its current form. 

The outcome of the conciliation process is not expected 

until spring 2013 at the earliest. We are continually 

monitoring these developments and are preparing an 

appropriate implementation process. 

On an international level, we are currently working on 

additional regulatory requirements for organisations 

declared to be systemically important financial institutions 

(SIFI). The scope of requirements specific to SIFIs 

can range from the duty to provide additional reports to 

increased equity requirements. Systemic relevance does 

not refer to the significance of a particular industry to the 

national economy in this instance, but rather to the potential 

impact of the insolvency of a particular company on 

the global real economy. The Financial Stability Board (FSB) 

is the primary body involved in these discussions, of which 

the banking industry is the current focus. The study of the 

insurance sector is to take place separately to that of the 

banks, and is to be led by the International Association of 

Insurance Supervisors (IAIS). The IAIS is currently working 

on a method of identifying G-SIIs (global systemically 

important insurers). A first overview of the companies identified 

as G-SIIs is expected to be published in April 2013. 

The insurance industry is of the understanding that its core 

business does not entail any systemic risks. 

Strategic risks 

We define strategic risks as those arising from bad business 

decisions, the poor implementation of decisions or a lack 

of ability to adapt to changes in our business environment. 

Strategic risks occur in the context of the Company’s and 

its business divisions’ existing and new earnings potentials. 

These risks generally arise early on and in conjunction 

with other risks and can lead to a significant long-term 

reduction in corporate value. We combat strategic risks by 

closely combining our strategic decision-making process 

with our risk management. This includes cultural and 

organisational aspects. 

Risks to our reputation 

We define a risk to our reputation as the risk of damage 

caused by the Company being perceived more negatively. 

How the public, customers, shareholders, employees and 

business partners perceive us is relevant, as is the case for 

other interested parties such as regulatory bodies. 

Reputation risks are monitored and managed using our 

internal risk control system (IKS). We further reinforced 

our compliance procedures in the Company in 2012. Since 

then, we have had a separate Compliance Unit reporting 

directly to the Chairman of the Board. The unit reviews 

the Company’s guidelines on proper conduct of staff and 

provides advice on the implementation of these guidelines. 

We have introduced a uniform advice process for our sales 

organisations which takes the full breadth of customers’ 

interests into account and aims to ensure a consistently 

high standard of advice. 

There are legal disputes between several former insurance 

intermediaries and ERGO Lebensversicherung AG, most 

of which have now been concluded. In connection with 

far-reaching claims by the former intermediaries, serious 

allegations have been levelled in the media since May 

2011, including reports of misconduct on incentive trips 

and errors in the sale of insurance products at ERGO. These 

cases have been extensively investigated by our internal




Risk report 

audit function. ERGO has initiated the rectification of errors 

and has established reserves for any liabilities arising. In 

relation to all these events, additional claims for damages 

against ERGO and Munich Re have been announced. 

Financial burdens and reputational damage for Group 

companies as a result of these allegations cannot be ruled 

out in future either. 

There are currently a number of lawsuits pending against 

various Ideenkapital companies. The plaintiffs are fund 

investors, who for the main part are asserting defects in 

prospectuses and products. The claims filed so far amount 

to a total of around € 6 m. Ideenkapital is defending itself 

against these claims. The possibility of further suits cannot 

be excluded. 

Emerging risks 

Our early risk warning system also covers emerging 

risks. These risks arise as a consequence of a change in 

conditions, be they legal, socio-political, geographical or 

technical. Such changes can affect our portfolio in ways 

we may not yet understand or recognise. By definition, the 

extent and likelihood of damages in relation to emerging 

risks bear a high degree of uncertainty. The Emerging Risk 

Think Tank, a group of experts at Munich Re, identifies, 

assesses and analyses new risks to the MR Group. ERGO’s 

IRM unit participates in the Emerging Risk Think Tank’s 

regular meetings. Topics which are particularly relevant to 

the ERGO Insurance Group or certain individual companies 

are analysed and assessed in more detail. 

Summary of the risk position 

All in all, we have come to the conclusion that neither the 

ERGO Insurance Group’s existence nor our policyholders’ 

interests have been endangered at any point. Furthermore, 

we are not currently aware of any developments 

which could adversely affect the continued operations, 

net assets, financial or earnings situation of our Company 

in the long run. The individual insurance organisations 

belonging to the ERGO Insurance Group are subject to the 

regulatory requirements in the countries where they are 

active. The ERGO Insurance Group’s insurance companies 

all fulfilled the appropriate local solvency requirements 

in 2012 with the exception of one international company. 

For this company the increase in capital required will be 

undertaken in the current business year. All of the Group’s 

companies exhibit sufficient coverage of tied assets. 

We are able to guarantee the functionality of our risk 

management system to a high level. The structures and 

processes we have implemented allow us to recognise the 

development of risks early and instigate the appropriate 

management processes. 

We continually monitor our capital investments using a 

Group-wide early-warning system which encompasses 

various key figures for the risks and earnings of each company. 

This allows us to ensure that solvency requirements 

are met and that we have sufficient protection for our 

equity at both Group and individual company levels. It also 

helps us to manage our income. The Group’s risk management 

system is in essence the collaboration between 

central risk management and the risk management units 

in each company. We therefore judge the ERGO Insurance 

Group’s risk position to be manageable, controlled and 

viable.



42 


Opportunities report 

As a major international insurance group, we offer an 

extensive array of insurance, provision and services, and 

the opportunities and risks for our business are just as 

diverse. In the chapter entitled ‘Prospects’, we offer an 

overview of how our business will probably develop under 

realistic parameters. We endeavour to address global 

trends with a long-term impact as extensively as possible. 

However, surprising and unforeseen events can never be 

ruled out completely. To protect ourselves against risks, we 

have established a sophisticated risk management system 

described in detail in our risk report. At the same time, we 

are also well prepared to seize unexpected opportunities to 

the benefit of our Company. 

It is clear, for example, that enhanced business opportunities 

will result for us if important macroeconomic parameters 

develop better than expected. Rapid stabilisation of the 

situation in the Eurozone could yield positive results and 

trigger an increase in premium income in most classes of 

insurance. Besides this, such a development could lead to 

a gradual normalisation of the bond markets and thus to 

a slow rise in yields on German government bonds. This 

would result in burdens on our investment result in the 

short term, but also bring higher returns in the long run, 

thus benefiting our long-term insurance business. 

Other trends and upheavals with an impact on our customers’ 

demand for insurance or our portfolio include technological 

progress, demographic shifts and changes in the 

legal environment, in particular regulatory interventions. 

This not only leads to risks but also to opportunities, which 

we are keen to utilise. 

As a result of the need to provide for a rapidly ageing population, 

opportunities are arising within the life and health 

insurance sectors. The trend for annuity insurance, which 

has been apparent for a number of years now, looks likely 

to continue. Within the current climate of low interest rates 

and rapidly fluctuating capital markets, traditional life 

insurance products with annual guarantees are presenting 

a significant challenge to us. We are therefore developing 

a new generation of products that we will bring onto the 

market during the course of the year. Thanks to their intelligent 

combination of guarantees, return prospects and 

flexibility, we see a great deal of market potential. 

In health insurance, long-term nursing care is becoming 

the focus of attention. During the reporting period, the 

German legislature decided to begin funding private 

nursing care, something which could have a subsequent 

positive impact on the market. As the market leader for 

supplementary insurance, this is undoubtedly something 

we intend to participate in. 

Our accident insurance product, introduced in 2012, offers 

a multitude of assistance services which aim to maintain 

quality of life for people involved in accidents. We are 

seizing opportunities which arise as a result of changes 

to family or household size. Alternative energy sources 

are resulting in an increased need for cover for property 

insurance – this includes both damage to equipment 

and loss of earnings. We are increasingly offering cover 

within the single European market, especially for industrial 

businesses. 

With our brand promise “To insure is to understand”, ERGO 

stands out positively in the market and we expect to be 

able to strengthen and expand our position. In our industry 

which is quite complex for consumers, consumers often 

feel their wishes and concerns regarding insurance are not 

taken seriously. Surveys show that they bemoan the lack of 

transparency in products and services. Regulatory authorities 

strengthen consumer rights. Our aim is therefore to 

respond to customer calls for transparency, authenticity 

and simplicity in an accurate and timely fashion. With our 

clear and easy-to-understand communication, we will 

create the basis for a partnership-based approach.




Opportunities report 

Customers are increasingly purchasing insurance cover 

using a range of different channels. ERGO’s sales already 

cover a wide array of options and we have the right sales 

channel for everyone: self-employed insurance sales partners, 

staff working in direct sales, as well as insurance 

brokers and strong cooperation partners – both in Germany 

and abroad – respond to the needs of private and corporate 

customers alike. We maintain sales partnerships with 

the major European bank UniCredit and other banks, both 

in Germany as well as in various European countries. We 

believe that the prospects for growth lie primarily in bank 

sales and direct marketing. 

We also see indirect benefits from a rising level of regulations. 

When risks from long-term life and health insurance 

contracts are made easier to measure and thus more 

transparent, and have to be backed with the requisite 

capital, competitive discipline should improve and the 

products offered should be limited to those that generate 

value for customers and providers. As a result, life insurance, 

which is particularly challenging when market interest 

rates are low, could become more attractive for us 

again in the long term. 

The rapid development of emerging markets also presents 

opportunities for expanding profitably and further diversifying 

our business portfolio. We are already involved in 

promising joint ventures in selected emerging markets in 

Asia: in property insurance with HDFC ERGO in India and 

with the Global Insurance Company in Vietnam. Furthermore, 

in November 2012, we formed a joint venture in 

India for life insurance with the well-positioned Avantha 

Group conglomerate. Since spring 2012, we have been 

working intensively on setting up ERGO China Life Insurance, 

a joint venture with the Shandong state-owned 

Assets Investment Holding Company as a strong local 

partner. We are also using our expertise in products and 

sales channels within emerging European markets in order 

to launch the best business models on the respective 

market and therefore further expand our international 

business.



44 


Prospects 

The following assessment and comments on the likely 

development of our Company, including the main opportunities 

and risks, are made to the best of our knowledge 

and belief. They are based on a host of findings currently 

available relating to prospects for the industry, future 

economic and political parameters, as well as trends and 

the main factors influencing them. All of this may of course 

change in the future without this being foreseeable at the 

present time. The actual development of the Company and 

its results might therefore diverge considerably from the 

forecasts. This section also includes information on how 

the actual results for the year covered by this report differ 

from the predictions made last year. 

All in all, looking ahead at the next two financial years, we 

continue to anticipate a positive trend for the business of 

the ERGO Insurance Group. This assessment is based on a 

number of expectations which take into account the main 

opportunities and risks, our economic environment and our 

strategic alignment. 

Comparison of our predictions for 2012 with 

the results for ERGO from 2012 

Based on our predictions for last year, premium income 

did not quite reach the forecast amount, though we did 

meet expectations in profits, when adjusted to allow for 

restructuring costs. 

Total premium income amounted to € 18.6 billion, down on 

the expected € 19 billion. This is largely down to less singlepremium 

business in life insurance. 

In the area of health, growth was down on market figures 

as forecast (+ 3.4%). This was to be expected due to our low 

level of premium rate adjustments. Market growth, as well 

as our own, was lower than foreseen. 

expected a market growth of 1−2%. We also failed to meet 

our target in our combined ratio: we had hoped to bring it 

down to well under 95%, but it currently stands at 95.8%. 

In addition to a number of coincidental cases of major 

damage, we made risk provisions for outstanding claims 

within the range of actuarial estimates. 

Our gross premiums written in direct insurance grew, as 

expected. We forecast lower growth in travel insurance 

than in previous years. However, premium income fell by 

5.2% in the year under review. 

We projected that premiums would remain stable in international 

business, after making adjustments for disposals 

of affiliated companies; however, we did not achieve this. 

This was largely due to the conditions in the life insurance 

sector which developed worse than expected. 

We achieved our forecast for the consolidated result if the 

profit of € 289 million is adjusted by € 128 million for the 

effects stemming from the restructuring of our sales forces 

in Germany. This gives a result of € 417 million. We forecast 

a net profit of € 400 million in our last annual report. 

Economic environment 

Global economic growth is again likely to be only moderate 

in 2013. The consolidation of public finances and high 

unemployment will probably result in slower economic 

momentum in many industrialised countries. In the eurozone, 

we expect at most a slight recovery on an annual 

basis; for the USA we predict only modest growth. In the 

emerging economies, particularly China, India and Brazil, 

growth should be stronger than in 2012. Inflation rates will 

consequently be moderate in most industrialised countries 

and will only reach a somewhat higher level in a few 

emerging countries. 

We had hoped that our property-casualty insurance in 

Germany would grow faster than the market. However, we 

did not achieve this goal with our 1.6% growth, compared 

to the assumed market growth of 3.7%; although we 

We forecast low economic growth and continued moderate 

inflation for Germany in 2013. In these circumstances, 

premium income can only be expected to grow modestly.




Prospects 

We expect that the world economy will expand more 

quickly after 2013. Nevertheless, the economic outlook is 

clouded by great uncertainty. 

A sharp downturn or even an extended period of stagnation 

cannot be completely excluded in a number of industrialised 

countries. A sustained low-interest-rate environment 

would substantially impair the situation of life insurance 

companies. The high levels of debt in many countries, an 

escalation of the US budgetary dispute, or upheavals in 

the eurozone could further destabilise the global financial 

system and the world economy to the detriment of the 

insurance industry. 

If there was a surprisingly strong economic recovery, the 

substantial interventions of the central banks and related 

expansion of the money supply might result in higher 

inflation, with corresponding inflation in claims costs for 

insurers. 

Capital markets 

A slow upturn in economic activity over the course of 2013 – 

driven by further expansive measures of the European 

Central Bank (ECB) in connection with a gradually receding 

credit crunch in the eurozone – should improve the position 

on the markets for risky assets. In turn, yields on German 

government bonds, which are currently extremely low, 

should rise again. Based on the very low volatility of the stock 

markets recently, greater fluctuations can be expected, as 

political uncertainty – e. g. through Italian elections – is still 

high. Moreover, some market participants now anticipate 

that Spain will submit an official application for assistance in 

2013 so as to qualify for unlimited bond-buying by the ECB. 

Further fiscal policy decisions which could induce major market 

movements are also due to be taken in the US. Given the 

continuing state debt crisis in the eurozone and the greater 

dynamism of the economy in the US, the US dollar should 

gain in attractiveness against the euro. 

Insurance industry 

The conditions in the individual European and Asian 

markets where we are active are very varied. Therefore, 

this section will concentrate on the detailed development 

of the part of our business which takes place in our home 

market of Germany, as this is the main focus of our 

Company. 

Life insurance in 2013 and 2014 

The life insurance market is likely to continue to be a difficult 

environment in which to work because of the European 

state debt crisis and the period of low interest rates on the 

financial markets. It is not only the customer who is struggling 

to find attractive investment opportunities for good, 

secure old-age provision, but simply that the possibilities 

are very limited, even for us insurers. For this reason, almost 

all life insurers have lowered the bonus rates for customers 

for 2013. This step, in combination with the large amount 

of additional interest reserves (‘Zins zusatzreserve’) set up in 

2012, increases the stability of the industry. 

We believe that over the next few years we will continue 

to see demand for products which pay out in the form of a 

pension, both in the traditional form and as more modern 

unit-linked products. Security is important to people, so the 

significance of the guaranteed amounts unit-linked products 

offer will increase. The industry will probably increase its 

use of innovative investment opportunities in order to provide 

the guaranteed amounts and returns that customers 

expect. In addition, insurance against the risks of disability 

or long-term nursing care is expected to remain important. 

The German Insurance Association (GDV) forecasts a stable 

development in premium income in 2013. There is some 

uncertainty as concerns the level of demand to be expected 

for the new unisex tariff products. 

Private health insurance in 2013 and 2014 

The introduction of the new unisex tariffs has changed the 

basic components of our calculations for new business in 

private health insurance. Many companies are using this 

changeover to revise their tariffs and update their product 

range. Various companies, including ERGO, are reducing their 

technical interest rates for new business. This is another 

area where only time will tell how customers will react to 

the new products. 

The German Bundestag passed the Restructuring of Care 

Act (PNG) on 29 June 2012 which includes the introduction 

of state-supported supplementary long-term nursing care 

insurance. This sets out a state contribution of € 60 per year




Prospects 

to independent care provision schemes starting in 2013. 

Such state-supported schemes are subject to obligation to 

contract and do not take risk assessment or the exclusion 

of benefits into account. 

Growth in private health insurance should remain on par 

with previous year’s level. 

Property-casualty insurance in 2013 and 2014 

We project further stable growth in property-casualty 

insurance premium income. This projection is based on the 

assumption that private households’ and businesses’ situations 

will continue to improve despite the weak economy. 

We foresee a rise in motor insurance premiums due to poor 

combined ratios across the industry. The migration of portfolios 

towards higher no-claims classes and cheaper tariff 

groups is not expected to have a large effect. We do not 

foresee any large changes to our private property business. 

Growth will only be possible through the adjustment of 

premiums for inflation. Growth in commercial segments 

could be similar to that in private property. We forecast 

little growth in legal protection insurance since premium 

adjustments here are hardly possible. The consequences of 

the adjustments to the Lawyers’ Remuneration Act remain 

to be seen. 

All in all, property-casualty insurers can expect growth in 

premium income of around 2.5%. 

Performance of the ERGO Insurance Group 

in 2013 and 2014 

The German life insurance industry remains a difficult 

environment because of historically low interest rates, and 

further development will largely depend on the volatile 

single-premium business. It remains to be seen whether 

customers will understand that the reduction of profit 

participation was necessary in order to ensure long-term 

security. However, we expect our new products to be 

successful. 

The adjustments we will be making to our private health 

insurance premiums on 1 April 2013 will be more marked 

than those in the previous year. The prices for new business 

will also increase significantly compared to last year 

which is largely due to the adjustment in the technical 

interest rate and the introduction of the unisex tariffs. New 

business may be affected by the price increases and by 

political debates on private health insurance. We expect 

further growth in supplementary insurance, partly owing 

to the introduction of the new state-subsidised long-term 

care insurance. Therefore, we believe that there will be a 

slight growth in premiums in this business sector. 

We are looking to achieve stable premium income in the 

area of German property-casualty insurance. We continue 

to attach great importance to risk commensurate prices, 

which in our business with commercial and industrial 

clients are not always attainable in the current market 

environment. On the other hand, there is still potential for 

us to make up some ground in motor insurance. We are 

making our plans based on us achieving a combined ratio 

under 95%. 

Our direct insurer should be able to again increase its 

gross premiums written in 2013. The driving force for this 

should once again be health insurance. As concerns total 

premiums, it must be noted that due to the interest rate 

situation, the development of our MaxiZins product cannot 

be accurately predicted. 

We wish to continue our risk-based and profit-based 

underwriting policy in travel insurance. Based on this, and 

the difficult economic situation in Europe, we forecast a 

slight reduction in premiums. 

We should return to growth in our international business in 

2013 despite no longer recording premiums for the South 

Korean ERGO Daum Direct, which we sold in the year under 

review. Our combined ratio should fall below 100%. 

ERGO Insurance Group forecasts total premium income 

of about € 18.5 billion. Even in 2014, the adverse market 

conditions for life insurance will impede significant growth. 

We expect a Group profit of between € 350–450 million in 

2013. For 2014, this figure should rise slightly.



Consolidated Financial Statements



48 

Consolidated Financial Statements 

Consolidated balance sheet as at 31 December 2012 

Assets 

A. Intangible assets 

Notes to the 

consolidated 

financial 

statements 


€ million 

2011 

€ million 

I. Goodwill [1] p. 74 205.7 205.6 

II. Other intangible assets [2] p. 76 519.0 551.7 

B. Investments 

724.7 757.4 

I. Land and buildings, including buildings on third-party land [3] p. 78 2,270.8 2,347.1 

Thereof: held for sale − 11.1 

II. Investments in affiliated companies and associates [4] p. 79 528.2 543.6 

Thereof: associates accounted for using the equity method 441.9 410.6 

III. Loans [5] p. 79 54,373.3 53,214.6 

IV. Other securities [6] p. 80 

1. Held to maturity 7.3 13.4 

2. Available for sale 59,200.3 53,589.9 

3. At fair value through profit or loss 1,352.1 1,068.2 

60,559.7 54,671.6 

V. Other investments [7] p. 89 1,701.0 1,440.1 

119,433.0 112,217.0 

C. Investments for the benefit of life insurance policyholders 

who bear the investment risk 5,957.0 5,092.0 

D. Reinsurers’ share in technical provisions [8] p. 89 4,560.6 4,775.7 

E. Receivables 

I. Current tax receivables 231.6 257.5 

II. Other receivables [9] p. 90 4,422.0 4,332.2 

4,653.6 4,589.7 

F. Cash at banks, cheques and cash in hand 1,102.7 920.8 

G. Deferred acquisition costs [10] p. 91 

– Gross 6,362.9 6,413.7 

– Reinsurers’ share 224.5 249.7 

– Net 6,138.4 6,164.0 

H. Deferred tax assets [11] p. 91 2,401.0 2,506.1 

I. Other assets [12] p. 93 2,237.0 2,323.5 

Total assets 147,208.0 139,346.2



Consolidated Financial Statements49 

Consolidated balance sheet as at 31 December 2012 

Equity and liabilities 

Notes to the 

consolidated 

financial 

statements 

A. Equity [13] p. 95 


€ million 

2011 

€ million 

I. Issued capital and capital reserve 841.4 841.4 

II. Retained earnings 2,257.2 2,270.9 

III. Other reserves 1,065.1 211.5 

IV. Consolidated result attributable to ERGO equity holders 276.0 334.2 

V. Non-controlling interests 146.9 168.9 

4,586.7 3,826.8 

B. Subordinated liabilities [14] p. 97 1,045.1 1,041.7 

C. Gross technical provisions 

I. Unearned premiums [15] p. 97 1,869.9 1,833.8 

II. Provision for future policy benefits [16] p. 98 95,544.2 94,012.3 

III. Provision for outstanding claims [17] p. 99 8,049.4 7,561.8 

IV. Provision for premium refunds and policyholders’ dividends [18] p. 102 13,602.9 9,853.9 

V. Other technical provisions [19] p. 103 95.5 119.0 

119,161.9 113,380.8 

D. Gross technical provisions for life insurance policies where 

the investment risk is borne by the policyholders [20] p. 103 6,257.2 5,371.9 

E. Other accrued liabilities 

I. Provisions for post-employment benefits [21] p. 104 1,780.7 1,190.9 

II. Other provisions [22] p. 107 1,509.2 1,306.7 

F. Liabilities 

3,289.9 2,497.5 

I. Current tax liabilities 683.1 766.9 

II. Other liabilities [23] p. 108 9,362.3 9,677.6 

10,045.4 10,444.5 

G. Deferred tax liabilities [11] p. 91 2,821.8 2,783.0 

Total equity and liabilities 147,208.0 139,346.2



50 


Consolidated income statement for 

the financial year 2012 

Notes to the 

consolidated 


€ million 

2011 1 

€ million 

financial 

statements 

1. Gross premiums written [24] p. 110 17,091.3 18,518.7 

2. Earned premiums 

– Gross 17,041.4 18,335.3 

– Ceded share 1,002.2 1,004.0 

– Net 16,039.1 17,331.3 

3. Income from technical interest [25] p. 112 4,873.9 3,908.1 

4. Expenses for claims and benefits [26] p. 113 

– Gross 17,556.0 17,369.2 

– Ceded share 811.5 666.1 

– Net 16,744.4 16,703.1 

5. Operating expenses [27] p. 113 

– Gross 3,800.2 4,058.6 

– Ceded share 287.8 244.9 

– Net 3,512.3 3,813.6 

6. Technical result (2.–5.) 656.2 722.8 

7. Investment result [28] p. 114 

– Investment income 6,819.4 7,674.5 

– Investment expenses 1,557.7 3,558.5 

– Total 5,261.7 4,116.0 

Thereof: income from associates accounted for using the equity method 66.2 47.0 

8. Other operating income [29] p. 116 352.4 359.6 

9. Other operating expenses [29] p. 116 445.5 484.0 

10. Deduction of income from technical interest − 4,873.9 − 3,908.1 

11. Non-technical result (7.–10.) 294.8 83.5 

12. Operating result 951.0 806.3 

13. Other non-operating result [30] p. 116 − 503.3 − 315.2 

14. Impairment losses of goodwill [31] p. 116 − 21.4 

15. Finance costs [32] p. 116 81.8 65.8 

16. Taxes on income [33] p. 117 76.6 54.5 

17. Consolidated result 289.3 349.4 

Thereof: 

– Attributable to ERGO equity holders 276.0 334.2 

– Attributable to non-controlling interests 13.3 15.3 

1 Previous year’s figures adjusted pursuant to IAS 8, see chapter “Principles of presentation and consolidation”



51 


Statement of recognised income and expense 


€ million 

2011 

€ million 

Consolidated result 289.3 349.4 

Currency translation 

Gains (losses) recognised in equity 41.3 − 35.4 

Included in the income statement 1 − 7.1 − 8.2 

Unrealised gains and losses on investments 

Gains (losses) recognised in equity 886.3 54.1 

Included in the income statement 1 − 57.8 − 59.9 

Change resulting from valuation at equity 

Gains (losses) recognised in equity − 0.7 − 

Included in the income statement 1 − − 

Change resulting from cash flow hedges 

Gains (losses) recognised in equity − 0.3 1.5 

Included in the income statement 1 0.7 5.4 

Actuarial gains and losses on defined benefit plans − 348.1 31.5 

Other changes 5.6 − 8.4 

Income and expense recognised directly in equity 519.9 − 19.4 

Total recognised income and expense 809.2 330.1 

Thereof: 

− Attributable to ERGO equity holders 795.3 319.3 

− Attributable to non-controlling interests 13.9 10.8 

1 Consolidated income statement



52 


Group statement of changes in equity 

Development of equity 

Issued capital and 

capital reserve 

Equity attributable 

to ERGO equity holders 

Retained earnings 


Status at 31 December 2010 841.4 2,170.0 

Allocation to retained earnings − 343.8 

Consolidated result − − 

Income and expense recognised directly in equity − 28.9 

Currency translation − − 

Unrealised gains and losses on investments − − 

Change resulting from valuation at equity − − 

Change resulting from hedges − − 

Actuarial gains and losses on defined benefit plans − 29.4 

Other changes − − 0.5 

Total recognised income and expense − 28.9 

Change in shareholdings in subsidiaries − − 1.5 

Change in consolidated group − − 

Dividend − − 270.3 

Status at 31 December 2011 841.4 2,270.9 

Allocation to retained earnings − 334.2 

Consolidated result − − 

Income and expense recognised directly in equity − − 334.3 

Currency translation − − 

Unrealised gains and losses on investments − − 

Change resulting from valuation at equity − − 0.7 

Change resulting from hedges − − 

Actuarial gains and losses on defined benefit plans − − 340.2 

Other changes − 6.6 

Total recognised income and expense − − 334.3 

Change in shareholdings in subsidiaries − − 13.6 


Dividend − − 

Status at 31 December 2012 841.4 2,257.2




Group statement of changes in equity 

Equity attributable 

to ERGO equity holders 

Non-controlling 

interests 

Total equity 

Other reserves 

Consolidated 

Unrealised gains 

and losses 

Reserve from 

currency translation 

Valuation result 

from hedges 

result 

€ million € million € million € million € million € million 

323.2 − 65.9 − 2.1 343.8 175.0 3,785.4 

− − − − 343.8 − − 

− − − 334.2 15.3 349.4 

− 5.7 − 44.9 6.8 − − 4.5 − 19.4 

− − 44.9 − − 1.3 − 43.6 

− 5.7 − − − − 0.1 − 5.8 

− − − − − − 

− − 6.8 − 0.1 6.9 

− − − − 2.1 31.5 

− − − − − 7.9 − 8.4 

− 5.7 − 44.9 6.8 334.2 10.8 330.1 

− − − − − 0.6 − 2.1 

− − − − − 11.1 − 11.1 

− − − − − 5.2 − 275.4 

317.5 − 110.7 4.7 334.2 168.9 3,826.8 

− − − − 334.2 − − 

− − − 276.0 13.3 289.3 

818.9 34.2 0.5 − 0.6 519.9 

− 34.2 − − − 34.2 

818.9 − − − 9.6 828.5 

− − − − − − 0.7 

− − 0.5 − − 0.1 0.4 

− − − − − 7.9 − 348.1 

− − − − − 1.0 5.6 

818.9 34.2 0.5 276.0 13.9 809.2 

− − − − − 33.0 − 46.6 

− − − − − − 

− − − − − 2.8 − 2.8 

1,136.4 − 76.5 5.2 276.0 146.9 4,586.7



54 


Consolidated cash flow statement 

for the financial year 2012 


€ million 

2011 

€ million 

Consolidated result 289.3 349.4 

Net change in technical provisions 4,123.0 2,658.1 

Change in deferred acquisition costs 48.1 49.2 

Change in deposits retained and accounts receivable and payable − 77.4 − 153.0 

Change in other receivables and liabilities − 407.5 − 1,747.4 

Gains and losses on the disposal of investments − 34.9 − 708.1 

Change in securities held for trading − 99.6 − 44.2 

Change in other balance sheet items 684.3 23.1 

Other income/expenses without impact on cash flow − 806.0 1,462.8 

I. Cash flows from operating activities 3,719.2 1,890.0 

Inflows from losing control of consolidated subsidiaries 12.2 951.4 

Outflows from obtaining control of consolidated subsidiaries − − 24.0 

Change from the acquisition, sale and maturities of other investments − 3,148.6 − 3,138.0 

Change from the acquisition and sale of investments for unit-linked life insurance − 361.6 − 489.4 

Other 6.6 14.9 

II. Cash flows from investing activities − 3,491.4 − 2,685.1 

Inflows from increases in capital and from non-controlling interests − − 

Outflows to ownership interests and non-controlling interests − 42.6 − 35.1 

Dividend payments − 2.8 − 275.4 

Change from other financing activities − 34.8 607.0 

III. Cash flows from financing activities − 80.2 296.4 

Cash flows for the financial year (I. + II. + III.) 147.5 − 498.6 

Effect of exchange rate changes on cash 34.4 − 20.2 

Cash at the beginning of the financial year 920.8 1,439.5 

Cash at the end of the financial year 1,102.7 920.8 

Additional information: 

Income tax paid (net) − 225.6 − 139.4 

Interest paid 321.9 368.5 

Interest received 4,391.2 4,632.5 

Dividends received 157.8 195.6



55 

Consolidated Financial Statements 

Principles of presentation and consolidation 

International accounting rules 

The consolidated financial statements of ERGO Insurance 

Group were prepared on the basis of Section 315 a para. 3 

of the HGB (German Commercial Code) in conjunction with 

Section 315 a, para. 1 of the HGB as well as in conjunction 

with Article 4 of the Regulation (EC) no. 1606/2002 of the 

European Parliament and Council of 19 July 2002 concerning 

the application of international accounting standards. 

The international accounting standards stated in Articles 2, 

3 and 6 of the aforementioned Regulation were observed, 

as well as the rules designated in Section 315 a, para. 1 

of the HGB. The consolidated financial statements also 

comply with all requirements as laid down by the IFRS. 

The standards adopted by the International Accounting 

Standards Board (IASB) have been referred to as “International 

Financial Reporting Standards” (IFRS) since 2002; 

the standards from previous years continue to be referred to 

as “International Accounting Standards” (IAS). 

The underwriting items are recognised and measured in 

accordance with the regulations governing IFRS 4 (as it 

was initially applied on 1 January 2005) on the basis of 

US GAAP (United States Generally Accepted Accounting 

Principles). 

Consolidated group 

In accordance with IAS 27, the consolidated financial statements 

include ERGO Versicherungsgruppe AG ( parent company) 

and all entities where ERGO Versicherungsgruppe AG 

owns, directly or indirectly, the majority of the voting rights 

or where it has the actual ability to control ( subsidiaries). 

Special purpose entities, such as special funds, are included 

in the consolidated financial statements according to SIC 12 

if, from an economic point of view, they are controlled by 

ERGO. 

Following a licence issued by the relevant regulatory 

authorities in April 2012, ERGO Insurance Group, together 

with the Shandong State-owned Assets Investment Holding 

Company (SSAIH), commenced the set-up of the company 

ERGO China Life Insurance Co., Ltd., Jinan, Shandong 

Province. This is intended primarily to provide life insurance 

to private customers in the Chinese province of Shandong. 

ERGO Insurance Group and SSAIH both own half of the 

shares in the new company. Business operations are likely 

to commence in the first half of 2013, provided that further 

approval has been obtained by the authorities there. 

ERGO Insurance Group signed an agreement with the 

Avantha Group in India on 1 November 2012 to set up a 

joint venture. The new company will provide life insurance 

for private customers. The registered offices of the 

future “Avantha ERGO Life Insurance Company” will be 

based in Mumbai. Business is due to start early in 2014 

provided that the authorities have issued the licence. ERGO 

Insurance Group will initially have a 26% stake in the new 

company. 

In the first quarter of 2012 ERGO Insurance Group took the 

decision to sell its fully consolidated subsidiary San Marino 

Life Impresa sammarinese di assicurazione sulla vita 

S. p. A., San Marino. An agreement concerning the sale of 

the company with economic effect as of July 2012 was 

signed in the second quarter of 2012; the sales price was 

€ 5 million. 

In the second quarter of 2012 ERGO Insurance Group 

disposed of its shares, with economic effect as of October 

2012, in its fully consolidated subsidiary ERGO Daum Direct 

General Insurance Co. Ltd., Seoul. The disposal of the company 

resulted in a loss of € 25.2 million, which was recorded 

under investment results in the Group’s income statement. 

In addition, a loss of € 6.9 million, which was contained 

income and expense recognised directly in equity, was to 

be reclassified from other reserves to other non-operating 

result.



Consolidated Financial Statements56 


The following table shows the cash flows and net 

assets resulting from the takeover and loss of control of 

consolidated subsidiaries or other operations: 

Net assets obtained 2012 

€ million 

2011 

€ million 

Goodwill − − 

Other intangible assets − − 

Investments − 33.0 

Cash − 1.7 

Other assets − 1.0 

Technical provisions (net) − − 

Other liabilities − − 0.1 

Total − 35.6 

Cash flows arising from obtaining control 2012 

€ million 

2011 

€ million 

Total consideration for obtaining control − − 25.7 

Non-cash consideration for obtaining control − − 

Cash consideration for obtaining control − − 25.7 

Cash over which control was obtained − 1.7 

Total − − 24.0 

Net assets lost 2012 

€ million 

2011 

€ million 

Goodwill − 49.5 

Other intangible assets 3.6 13.6 

Investments 216.3 1,955.2 

Cash 1.1 62.6 

Other assets 33.6 405.0 

Technical provisions (net) − 188.8 − 1,596.6 

Other liabilities − 27.3 − 521.8 

Total 38.6 367.4 

Cash flows arising from losing control 2012 

€ million 

2011 

€ million 

Total consideration for losing control 13.4 1,045.7 

Non-cash consideration for losing control − − 

Cash consideration for losing control 13.4 1,045.7 

Cash over which control was lost − 1.1 − 94.2 

Total 12.2 951.4 

Number of consolidated subsidiaries 1 Germany International Total 

Development during the financial year 

31 December previous year 63 98 161 

Additions 3 3 6 

Reductions 2 − 10 10 

31 December financial year 66 91 157 

1 In addition, 36 German and 2 international special funds were included in the consolidated group.





Number of companies valued at equity Germany International Total 

Development during the financial year 

31 December previous year 19 13 32 

Additions 2 1 3 

Reductions − 1 1 

31 December financial year 21 13 34 

A list of the entire shareholdings is available in the Section 

entitled “List of shareholdings as at 31 December 2012 in 

accordance with Section 313, para. 2 of the German Commercial 

Code (HGB)”. 

Consolidation methods 

The annual financial statements of subsidiaries and special 

purpose entities incorporated into the Group are subject to 

standard accounting and valuation methods. As a general 

rule, the balance sheet cut-off date of companies included 

in the consolidated financial statements is 31 December. 

Some special funds have other balance sheet dates; these 

funds are consolidated on 31 December on the basis of 

interim financial statements. 

The consolidation of capital is done using the purchase 

method. In order to determine the equity capital at the 

time of acquisition, the assets and liabilities of the subsidiary 

or special fund are measured at fair value. The 

considera tion transferred in exchange for the acquired 

shares is netted against the equity capital apportionable to 

the Group at the time of acquisition; any residual positive 

amount is capitalised as goodwill. 

Profits earned by subsidiaries or special purpose entities 

after their first consolidation are included in Group equity. 

Receivables and liabilities as well as income and expenses 

relating to intra-Group transactions are eliminated insofar 

as they are not of minor importance. 

Pursuant to IAS 28, associates are generally all entities 

which are not subsidiaries or joint ventures and where 

there is the opportunity of exercising substantial influence 

on the business or financial policy. 

In case of participating interests of between 20% and 50% 

of the voting rights, the entities in question are deemed to 

be associated companies unless it can be clearly demonstrated 

that there is no significant influence. 

Recognition and measurement 

Use of judgement and estimates in recognition 

and measurement 

In the course of preparing the consolidated financial 

statements we have to use our judgement in applying 

accounting and valuation methods and to make estimates 

and assumptions. These affect the year-end items shown 

in the consolidated balance sheet, the consolidated 

income statement and disclosures of contingent assets 

and liabilities. 

The use of estimates is of utmost importance for technical 

provisions, since the valuation is based constantly on 

models and the trend in future cash flows of insurance 

policies is not entirely predictable. Nevertheless, arbitrary 

decisions and estimates also play an essential role with 

other items. 

Our internal processes are geared to determine amounts 

as accurately as possible, taking into account all the 

relevant information. Determination of these values is 

based on management’s best knowledge regarding the 

respective facts on the balance sheet date. Nevertheless, it 

is in the nature of these items that estimates may have to 

be adjusted over the course of time to take account of new 

knowledge. 

Owing to the uncertainties surrounding estimates any 

discretionary judgements also contain a subjective component. 

This may result in comparable items being measured 

differently by ERGO Insurance Group and another company, 

especially as the range of realistic assumptions can differ 

tremendously in individual cases. However, this does 

not mean that the valuation has not been done properly – 

merely that it reflects differing knowledge and assessments 

of future developments.





Discretionary judgements and estimates are of particular 

significance for the following items and are described in 

more detail in the respective explanatory notes: 

• Goodwill and other intangible assets 

• Fair values and impairments of financial instruments 

• Deferred acquisition costs 

• Technical provisions 

• Pension provisions 

• Deferred tax 

• Contingent liabilities 

Currency of the report 

The currency of the report is the euro (€). Figures are shown 

in millions of euros, and shown with figures after the decimal 

point. Figures in brackets refer to the previous year. 

Figures for previous year 

Changes in line with the provisions governing IAS 8 and 

the modification in calculating the technical interest made 

it necessary to make adjustments retrospectively to the 

consolidated income statement for the 2011 financial year 

and the corresponding items in the Notes to the consolidated 

financial statements, see section on “Changes in accounting 

policies”. Otherwise, last year’s figures were determined 

in the same way as for those in the 2012 financial year. 

Changes in accounting policies 

Application of the recognition, measurement and disclosure 

methods follows the principle of consistency. In the financial 

year 2012, the following new IFRSs had to be applied for 

the first time: 

The amendments to IFRS 7 (rev. 10/2010), Financial Instruments: 

Disclosures, Improving Disclosures about Financial 

Instruments, contain more extensive disclosure requirements 

regarding the transfer of financial assets. The aim 

of these amendments is to make more transparent the 

influence of such transactions on the entity’s risk exposure 

and hence its financial situation. This change currently has 

no practical relevance for ERGO. 

The amendments to IAS 12 (rev. 12/2010), Taxes on Income, 

Deferred Tax: Recovery of Underlying Assets, address the 

issue that the measurement of deferred tax items depends 

on whether the carrying amount of an asset is expected 

to be recovered through use or through sale. In practice, 

the two are often difficult to distinguish. The amendments 

provide a solution through the introduction of a rebuttable 

presumption that recovery of the carrying amount will 

normally be through sale. These amendments are mandatory 

for financial years beginning on or after 1 January 

2012, and were adopted into EU law in December 2012. As 

the clarification currently has no practical significance for 

ERGO, no consequences resulted from this delay. 

Our method of calculating technical interest has been 

modified in the primary insurance segments since 2012. 

This particularly affects the life insurance business. In 

addition to the components used hitherto, the deposits 

retained on ceded business are now also taken into 

account as a basis for the technical interest. Thus the 

portion of investment income that corresponds to the 

deposit interest expense is included as a new component in 

the calculation of the technical interest and reallocated to 

the technical result. Pursuant to IAS 8.22, the modification 

has been applied with retroactive effect and the previous 

year’s figures have been adjusted accordingly. This change 

provides for a more accurate presentation of the technical 

result. As a result of the change, the income from technical 

interest in the financial year 2012 is higher than it would 

have been under the previous method. It is impracticable 

to determine the exact increase for the current period, but 

there was an increase of € 55.3 m for the same period last 

year, which includes the effect from the retroactive adjustment 

of a consolidated entry. In addition, the estimate 

for policyholders’ bonuses has been refined and has been 

used pursuant to IAS 8.32 as from 2012 for future periods. 

This adjustment has no effect on the consolidated balance 

sheet.





Consolidated income statement 2011 

as originally 

Changes from 

adjustments 

2011 

adjusted 

recognised pursuant to IAS 8 

1. Gross premiums written 18,639.2 − 120.4 18,518.7 

2. Earned premiums 

– Gross 18,455.7 − 120.4 18,335.3 

– Ceded share 1,004.0 − 1,004.0 

– Net 17,451.8 − 120.4 17,331.3 

3. Income from technical interest 3,852.8 55.3 3,908.1 

4. Expenses for claims and benefits 

– Gross 17,489.6 − 120.4 17,369.2 

– Ceded share 666.1 − 666.1 

– Net 16,823.5 − 120.4 16,703.1 

6. Technical result (2.–5.) 667.4 55.3 722.8 

10. Deduction of income from technical interest − 3,852.8 − 55.3 − 3,908.1 

11. Non-technical result (7.–10.) 138.9 − 55.3 83.5 

The net level premiums for the products of our foreign 

subsidiaries that fall under FAS 97 were previously shown 

in accordance with local accounting regulations. We have 

now recognised these net level premiums as a deposit, 

without impact on profit or loss, in accordance with the 

rules of FAS 97. Pursuant to IAS 8.41, the modification 

has been applied with retroactive effect and the previous 

year’s figures have been adjusted accordingly. This adjustment 

has no effect on the consolidated balance sheet. The 

adjustment made to insurance benefits mainly concerns 

the change within the provision for future policy benefits in 

addition to payments for insured incidents. 

The table lists the effects on the consolidated income 

statement for the 2011 financial year. 

Standards not yet in force and changes to standards 

All standards or changes in standards that have not yet 

entered into force will be applied by ERGO for the first time 

as from the mandatory effective date for entities domiciled 

in the European Union. 

Under the amendment to IAS 1 (rev. 06/2011), Presentation 

of Financial Statements, Presentation of Items of Other 

Comprehensive Income, “other comprehensive income” 

must now be divided into items that will be reclassified to 

profit or loss at a later date and items that will not. The 

purpose of this amendment is to improve the presentation 

of these items and align the approaches under IFRS and US 

GAAP. The amendments are mandatory for financial years 

beginning on or after 1 July 2012, and were adopted into 

EU law in June 2012. 

Unless mentioned separately below, the following standards 

are mandatory for financial years beginning on or 

after 1 January 2013. Only the amendments published 

as part of the IFRS Annual Improvement Process and the 

revised IFRS 9, Financial Instruments, as well as the related 

changes to the group-specific standards (IFRS 10, IFRS 11, 

IFRS 12 and IAS 27) have not yet been adopted into European 

law. The other standards were adopted in June or 

December 2012. 

IFRS 9 (11/2009 and rev. 10/2010), Financial Instruments, 

replaces the current requirements of IAS 39 relating to recognition 

and measurement of financial instruments. Given 

its complexity, the overall project has been subdivided into 

three phases. The new rules in IFRS 9 that have thus far 

been adopted from the first phase of the project mainly 

concern the classification and measurement of financial 

instruments. Under these rules, financial assets will in 

future be divided into only two primary measurement categories: 

amortised cost and fair value through profit or loss. 

The distinction is to be made on the basis of the reporting 

entity’s business model and the contractual cash flows of 

the assets. In addition, for equity instruments there will be 

the option of measurement at fair value without affecting 

the income statement, although then it will not be permissible 

for value changes recognised in other comprehensive





income to be subsequently transferred to profit or loss. 

There also remains the possibility of voluntary measurement 

at fair value (fair value option). For financial liabilities, 

there are no changes in the measurement rules except 

that if the fair value option is applied, value changes 

attribut able to a change in the entity’s credit risk must be 

recognised without impact on profit or loss in future. 

The two other phases of the project are concerned with 

rules for recognising impairments and for hedge accounting. 

While the discussion regarding hedge accounting has 

practically been concluded and the new rules are to be 

integrated into IFRS 9 in the short term, the IASB will first 

be publishing another exposure draft for the rules regarding 

recognition of impairments. 

Besides this, in November 2012, the IASB published an 

exposure draft providing for a further change in the new 

measurement rules. This is designed to make it possible to 

continue measuring certain debt instruments at fair value 

without impact on profit or loss, depending on the contractual 

cash flows and an additionally defined business model 

that contains an intention to sell. 

Originally, IFRS 9 envisaged that the new provisions would 

be mandatorily effective as from 2013. Since discussions 

of the still outstanding project phases are taking longer 

than originally planned, the mandatory effective date 

of a standard amending IFRS 9 and IFRS 7 (rev. 12/2011) 

has been deferred to financial years beginning on or after 

1 January 2015. 

IFRS 10 (05/2011), Consolidated Financial Statements, 

supersedes the provisions of IAS 27 and SIC 12 and creates 

a uniform definition for control, irrespective of whether 

this control is based on company law or on contractual or 

economic circumstances. There are no longer independent 

provisions for structured entities (special purpose entities). 

A situation of control exists when an investor has the ability 

to direct an investee’s relevant activities and is exposed 

to the returns from those activities. Furthermore, IFRS 10 

addresses issues that have not been dealt with until now, 

including the regulation that a situation of control exists 

even if an investor holds less than a majority of the voting 

rights but regularly has a de facto majority of voting rights 

at the annual general meetings. The effects of the new 

standard on ERGO’s consolidated companies are currently 

being reviewed. 

IFRS 11 (05/2011), Joint Arrangements, defines joint operations 

and joint ventures and specifies how they are to be 

recognised in the balance sheet. The changes compared 

with IAS 31, Interest in Joint Ventures, mainly concern the 

elimination of the option of proportionate consolidation 

for joint ventures, the amended definition of joint control, 

and the extended scope of application of joint operations. 

These may now include arrangements structured through 

a separate vehicle. The elimination of the option of proportionate 

consolidation will have no impact on ERGO, as we 

do not avail ourselves of this option and already apply the 

equity method. The effects of the two other changes are 

currently being analysed. 

IFRS 12 (05/2011), Disclosure of Interests in Other Entities, 

combines the disclosures regarding facts and circumstances 

governed by IFRS 10, 11 and IAS 28. The objective 

of the standard is to provide information on the type and 

risk of interests in other entities and their implication for 

the consolidated financial statements. As a consequence, 

the information provided needs to be more comprehensive 

than hitherto. In particular, IFRS 12 requires disclosures 

relating to unconsolidated structured entities, non-controlling 

interests, discretionary judgements and assumptions 

in evaluating the nature of interests in other entities, 

as well as detailed information on each significant joint 

arrangement. The precise extent to which ERGO is affected 

by the extended disclosure requirements is currently being 

examined. 

IAS 27 (rev. 05/2011), Separate Financial Statements, now 

deals only with balance sheet recognition of investments 

in subsidiaries, joint ventures and associates in separate 

single-entity financial statements in accordance with IFRS, 

including the relevant disclosures in the notes. The definition 

of control, and balance sheet recognition of subsidiaries 

in consolidated financial statements is now regulated 

by IFRS 10. The standard has no effect on ERGO, as the provisions 

for single-entity financial statements in accordance 

with IFRS have remained unchanged. 

IAS 28 (rev. 05/2011), Investments in Associates and Joint 

Ventures, specifically includes amendments following 

from the publication of IFRS 11 and IFRS 12. Among other 

things, the standard integrates the balance sheet recognition 

of joint ventures and circumstances previously governed 

by SIC 13, Jointly Controlled Entities – Non-Monetary 

Contributions by Venturers. Furthermore, investments in





associates or joint ventures held by open-ended investment 

funds or for unit-linked insurance, for example, are 

no longer excluded from the standard’s scope of application. 

Rather, there is now an option to measure these at 

fair value with impact on profit or loss. The amendments 

do not have any major implications for ERGO. 

As mandated by the IASB, application of IFRS 10, IFRS 11 

and IFRS 12 and the amendments to IAS 27 and IAS 28 

would be mandatory for financial years beginning on or 

after 1 January 2013. When the standards were adopted 

into European law, the mandatory effective date was 

deferred by one year, so that the standards concerned 

have to be applied for the first time by entities domiciled 

in the European Union for financial years beginning on or 

after 1 January 2014; voluntary application before that 

date is permitted. 

In June 2012, the IASB adopted IFRS Consolidated Financial 

Statements, Joint Arrangements, and Disclosure of Interests 

in Other Entities – Transition Guidance (Amendments 

to IFRS 10, IFRS 11 and IFRS 12) (06/2012), which clarifies 

that the requirement to provide adjusted comparative 

information on first-time application is limited to the 

preceding comparative period only. Insofar as first-time 

application does not result in any change in the need to 

consolidate an entity at the date of first-time application, 

no adjusted comparative information for prior periods 

is necessary. In addition, the requirement to provide 

adjusted comparative information for prior periods is 

removed for unconsolidated structured entities. The effects 

of the changes on ERGO are currently being analysed. 

The amendments are generally mandatory for financial 

years beginning on or after 1 January 2013. However, we 

expect that when they are adopted into European law, the 

mandatory effective date in the European Union will be 

deferred by one year for these amendments as well. 

The IFRS Investment Entities (Amendments to IFRS 10, 

IFRS 12 and IAS 27) (10/2012) introduces a definition of the 

term “investment entities” and specifies that such entities 

are generally excepted from the requirement to consolidate 

their subsidiaries in future. Rather, they are required 

to measure them at fair value through profit or loss. The 

exception from the consolidation requirement does not 

apply to parents of investment entities that are not themselves 

investment entities. Besides this, additional disclosure 

requirements for investment entities are provided 

for. The amendments, whose application is mandatory for 

financial years beginning on or after 1 January 2014, are 

not relevant for ERGO. 

IFRS 13 (05/2011), Fair Value Measurement, provides guidance 

on measuring items at fair value if another standard 

prescribes fair value measurement or fair value disclosure 

in the notes to the financial statements. The standard thus 

does not determine what items need to be measured at 

fair value. IFRS 13 revises the definition of fair value, defining 

it as the price that would be received to sell an asset or 

paid to transfer a liability in an orderly transaction between 

market participants at the measurement date. The standard 

includes detailed information on how to determine 

the fair value for different types of assets and liabilities. In 

addition, the standard requires further disclosures in the 

notes – for instance, the fair value hierarchy thus far only 

required for financial instruments under IFRS 7 has now 

been extended to include all items measured at fair value. 

On the basis of IFRS 13, we have verified whether ERGO’s 

fair value measurement is in compliance with the new 

provisions, and we will make any adjustments in measurement 

necessary. The new disclosures in the notes also 

need to be implemented. 

The amendments published as part of the IFRS Annual 

Improvement Process in May 2012 concern IFRS 1, Firsttime 

Adoption of International Financial Reporting Standards, 

which as such is not relevant for ERGO, as well as 

IAS 1, Presentation of Financial Statements, IAS 16, Property, 

Plant and Equipment, IAS 32, Financial Instruments: 

Presentation, and IAS 34, Interim Financial Reporting, 

and the knock-on change in the interpretation IFRIC 2, 

Members’ Shares in Co-operative Entities and Similar 

Instruments. Only the amendment to IAS 1, Presentation 

of Financial Statements, is of practical significance 

for ERGO, and this simplifies the rules currently in place. 

Where a retro spective change in accounting policies or a 

retrospective adjustment or reallocation of items under 

IAS 8 requires publication of a binding third comparative 

balance sheet, it is no longer necessary to make the 

relevant disclosures in the notes.





As a result of the amendments to IAS 19 (rev. 06/2011), 

Employee Benefits, the option for deferring the recognition 

of actuarial gains and losses, in particular the “corridor 

approach”, has been eliminated. These gains and losses 

must now be recognised in equity with no effect on profit 

or loss. Furthermore, the past service cost for retroactive 

changes in a defined benefit plan is to be immediately 

recognised in the income statement. The return on plan 

assets is now to be determined on the basis of the rate 

used to discount the present value of defined benefit obligations. 

The administrative costs and taxes payable by 

the plan are to be deducted from the return. The requirements 

regarding the asset ceiling have been integrated 

and further specified. Moreover, additional disclosures in 

the notes are required, e. g. analysing pension obligations 

in terms of their risks and sensitivities for the actuarial 

assumptions. The amendments will not have any major 

effects on ERGO. The extended disclosures in the notes 

need to be implemented. 

The amendments to IAS 32 (rev. 12/2011), Financial 

Instruments: Presentation – Offsetting Financial Assets 

and Financial Liabilities, and IFRS 7 (rev. 12/2011), Financial 

Instruments: Disclosures – Offsetting Financial Assets and 

Financial Liabilities, clarify some issues in relation to the 

admissibility of offsetting financial assets and financial 

liabilities. They also require additional disclosures in the 

notes to the financial statements. These additional disclosures 

comprise gross and net amounts related to offsetting 

as well as amounts for existing rights to offset that 

do not satisfy the offsetting criteria. The new disclosures 

are mandatory for annual periods beginning on or after 

1 January 2013 and the clarifications for annual periods 

beginning on or after 1 January 2014. We are currently 

proceeding on the assumption that these changes will 

have no practical significance for ERGO. 

IFRIC Interpretation 20 (10/2011), Stripping Costs in the 

Production Phase of a Surface Mine, clarifies when production 

stripping should lead to the recognition of an asset 

and how that asset should be measured, both initially and 

in subsequent periods. This interpretation has no practical 

relevance for ERGO. 

Non-current assets and disposal groups classified as 

“held for sale” and sold in the reporting period 

Non-current assets and disposal groups classified as “held 

for sale” are recognised at the lower of carrying amount or 

fair value less sales cost and shown separately on the consolidated 

balance sheet. 

In the fourth quarter of 2011 we sold, with economic 

impact in March 2012, an investment property used by a 

third party with a carrying value of € 11,1 million. The sales 

price was € 51.9 million. 

We sold interests in fully consolidated subsidiaries during 

the 2012 financial year. For further details concerning 

these transactions, please refer to the Notes on the scope 

of consolidation on page 55. 

Assets 

Intangible assets 

Goodwill resulting from the first-time consolidation of 

subsidiaries is tested for impairment at least annually, 

in accordance with IAS 36. We additionally carry out adhoc 

impairment tests if there are indications of impairment. 

For impairment testing, the goodwill is allocated to 

the cash-generating units or groups of cash-generating 

units expected to derive benefit from the synergies of the 

business combination. To ascertain whether there is any 

impairment, the carrying amount (including allocated 

goodwill) of a cash-generating unit or a group of cashgenerating 

units is compared with that unit’s or group’s 

recoverable amount. The recoverable amount is the greater 

of the fair value less costs to sell and the value in use. If 

this recoverable amount is lower than the carrying amount, 

a write-down is made on the goodwill. If the amount of 

the impairment of a cash-generating unit or group of cashgenerating 

units is greater than the carrying amount of the 

goodwill allocated, the difference is generally allocated pro 

rata between the other relevant assets of the unit or group 

of units on the basis of their carrying amounts. However, 

the carrying amount may not be reduced below the highest 

of fair value less costs to sell, the value in use, and zero.





The other intangible assets mainly comprise acquired 

insurance portfolios, acquired and self-developed software, 

and acquired sales networks and client bases. 

Acquired insurance portfolios are recognised at their 

present value on acquisition (PVFP – present value of 

future profits). This is determined as the present value of 

expected profits from the portfolio acquired, without consideration 

of new business and tax effects. The acquired 

insurance portfolios are amortised in accordance with 

the realisation of the profits from the insurance portfolios 

underlying the PVFP calculation. They are regularly 

tested for impairment in accordance with IFRS 4 (liability 

adequacy test); cf. notes on liabilities item C: Gross technical 

provisions. Write-downs are recognised under operating 

expenses. 

Self-developed and other software, acquired sales networks, 

client bases and brand names are carried at cost. 

Self-developed and other software is amortised on a 

straightline basis at a rate of 20–33% over its useful life – 

three to five years – or in exceptional circumstances at a 

rate of 10% over a period of up to ten years. The useful 

lives and depreciation rates of the acquired sales networks 

and client bases are 2–17 years or 6–50%, and those of the 

brand names 1–30 years or 3–100%; the items in question 

are amortised consistently in accordance with the straightline 

method. Write-downs or write-ups are made if 

required. Write-downs and write-ups are distributed in 

the consolidated income statement between investment 

expenses, expenses for claims and benefits and operating 

expenses. If it is not possible to allocate the write-downs 

and write-ups to the functional areas, they are shown 

under other non-operating expenses or income. 

Investments 

Land and buildings shown under investments comprise 

property used by third parties and are carried at cost. 

Maintenance expenses are recognised as an expense. 

Structural measures equivalent to 5% or more of the 

historical cost of a building are generally assessed with 

regard to whether they have to be capitalised. Buildings are 

depreciated on a straight-line basis in accordance with the 

component approach, depending on the weighted useful 

life for their specific building class. The underlying useful 

lives mainly range between 40 and 55 years. If the recoverable 

amount of land and buildings falls below their carrying 

amount, the carrying amount is written down to the 

recoverable amount. Impairment losses are recognised as 

investment expense in the consolidated income statement, 

and reversals of impairment losses as investment income. 

Investments in affiliated companies that we do not consolidate 

because they are not material are generally carried 

at their fair values. If the investments are quoted on a 

stock exchange, we use the share prices at the balance 

sheet date; for unquoted investments, the fair value is 

measured using the discounted earnings or net asset value 

method. Unrealised gains or losses are recognised directly 

in other reserves after deduction of deferred taxes and 

amounts apportionable to policyholders of life and health 

insurers on realisation (provision for deferred premium 

refunds). 

Investments in associates are valued by the equity method 

at the Group’s proportionate share of their net assets. 

The associate’s earnings attributable to the Group are 

included in the investment result. As a rule, the equity and 

annual result from the most recent individual or consolidated 

financial statements of the associate are used; in 

the case of the annual financial statements of significant 

associates, appropriate adjustments are made to conform 

them to ERGO’s accounting policies, in accordance with 

IAS 28.27; exceptional transactions of material importance 

for a true and fair picture of the associate’s financial 

position are recognised in the same financial year. Investments 

in associates that are not material for assessing





the Group’s financial position are generally accounted for 

at fair value. To determine the fair value, we use the share 

prices at the balance sheet date if the investments are 

quoted on a stock exchange; for unquoted investments, 

the fair value is measured using the discounted earnings 

or net asset value method. Changes in the fair value are 

recognised in “other reserves” under unrealised gains and 

losses after taking into account deferred taxes and those 

amounts at life and health insurers which, when realised, 

are due to policyholders (provision for deferred premium 

refunds). 

Loans are non-derivative financial assets with fixed or determinable 

payments that are not quoted in an active market. 

They are measured at amortised cost in accordance with 

the effective interest method. Write-downs for impairments 

are made in cases where the repayment of a loan 

can no longer be expected. 

Fixed-interest securities held to maturity are measured at 

amortised cost in accordance with the effective interest 

method. 

Fixed-interest or non-fixed-interest securities available 

for sale that are not designated as at fair value through 

profit or loss or recognised under loans are accounted for 

at fair value, with resulting changes in value recognised in 

equity with no effect on profit or loss. If no quoted prices 

in an active market are available, fair values are based 

on recognised valuation methods in line with the present 

value principle. Unrealised gains or losses are calculated 

taking into account interest accrued and, after deduction 

of deferred taxes and the amounts apportionable to 

policyholders by the life and health insurers on realisation 

(provision for deferred premium refunds), are recognised 

directly in equity under “other reserves”. 

Securities at fair value through profit or loss comprise 

securities held for trading and securities designated as at 

fair value through profit or loss. Securities held for trading 

are all fixed-interest and non-fixed-interest securities that 

we have acquired for trading purposes to earn short-term 

profits from price changes and differences. In addition, 

they include all derivative financial instruments with 

positive fair values which we have acquired to manage and 

hedge risks but which do not meet the requirements of 

IAS 39 for hedge accounting, and the positive fair values of 

insurance derivatives and of derivative components separated 

from the underlying insurance contract. Securities 

designated as at fair value through profit or loss comprise 

structured securities. This designation may only be made 

at the time of acquisition; reallocation to this category in 

later periods is not possible. 

Securities at fair value through profit or loss are accounted 

for at fair value at the balance sheet date. If no quoted 

prices in an active market are available, fair values particularly 

with derivatives) are based on recognised valuation 

methods. ERGO uses a range of valuation models for this 

purpose, details of which may be obtained from the following 

table below. 

All unrealised gains and losses from such valuation are 

included in the investment result. 

Other investments comprise deposits with banks, deposits 

retained on assumed reinsurance business and investments 

in renewable energies. Deposits with banks are 

measured at amortised cost in line with the effective interest 

method. Deposits retained are recorded at face value. 

Investments in renewable energies are generally recorded 

at amortised cost; the items in question are amortised on 

a straight-line basis with at least 5% over the useful life of 

20 years at the most





Valuation models 

Derivatives Pricing method Parameters Pricing model 

Equity and index risks 

Stock options traded on 

the stock exchange 

Quoted price – – 

OTC stock options Theoretical price Listing of underlying shares, 

effective volatilities, money-market 

interest rate, dividend yield 

Equity forwards Theoretical price Money-market interest rate, 

share price, dividend yield 

Equity / index futures Quoted price − − 

Interest-rate risks 

Interest-rate swaps Theoretical price Swap curve, money-market 

interest-rate curve 

Swaptions / interestrate 

guarantee 

Theoretical price 

At-the-money volatility matrix 

and skew, swap curve, moneymarket 


Interest-rate currency swaps Theoretical price Swap curve, money-market 

interest-rate curve, 

currency spot rates 

Interest-rate futures Quoted price − − 

Inflation swaps Theoretical price Zero-coupon inflation swap rates, 

money-market interest-rate curve, 

swap curve 

Bond futures Quoted price − − 

Quoted options on bond futures Quoted price − − 

Currency risks 

Currency options Theoretical price At-the-money volatility, currency 

spot rates, money-market interestrate 

curve 

Currency forwards Theoretical price Currency spot rates, 

money-market interest-rate curve 

Other transactions 

Insurance derivatives 

(excluding variable annuities) 

Insurance derivatives 

(variable annuities) 



Market values of the cat bonds, 


Biometric and lapse rates, 

volatilities, 

interest-rate curve, 

currency spot rates 

Credit default swaps Theoretical price Credit spreads, 

recovery rates, 


Total return swaps on 

commodities 

Black-Scholes (European); Cox, 

Ross and Rubinstein (American), 

Monte Carlo simulation 

Present-value method 


Black-76 



Garman-Kohlhagen 





ISDA CDS Standard Model 

Theoretical price Listing of underlying index Index ratio calculation 

Commodity options Theoretical price Listing of underlying shares, 

effective volatilities, 

money-market interest rate 

Black-Scholes (European); Cox, 

Ross and Rubinstein (American)





Repurchase agreements and securities lending 

Under repurchase agreements we, as the lender, acquire 

securities with the obligation to sell them back to the 

borrower at a later date. As the risks and rewards from the 

securities remain with the borrower, they are not posted 

as such in our accounts but are shown as a receivable 

from the borrower under “other investments, deposits 

with banks”. Interest income from these transactions is 

recognised in the investment result. 

Securities that we lend by way of securities lending continue 

to be recognised in our balance sheet, as the main risks 

and rewards remain with ERGO; securities that we have 

borrowed are accounted for by the lender. Interest income 

from these transactions is recognised in the investment 

result. 

Recognition of financial instruments 

Financial assets are accounted for at the settlement date. 

Determining fair values 

IAS 39 defines the fair value of a financial instrument 

as the amount for which a financial asset could be 

exchanged, or a financial liability settled, between knowledge 

able, willing parties in an arm’s length transaction. 

All financial instruments recognised at fair value are allocated 

to one of the valuation hierarchy levels of IFRS 7. 

This valuation hierarchy provides for three levels. The initial 

basis for the allocation is the economic investment class. 

Only if this does not result in an appropriate allocation do 

we deviate from such an approach in individual cases. 

The allocation reflects which of the fair values derive from 

transactions in the market and where valuation is based on 

models because market transactions are lacking. 

In the case of Level 1, valuation is based on unadjusted 

quoted prices in active markets for identical financial 

assets which ERGO can refer to at the balance sheet date. 

A market is deemed active if transactions take place with 

sufficient frequency and in sufficient quantity for price 

information to be available on an ongoing basis. Since a 

quoted price in an active market is the most reliable indicator 

of fair value, this should always be used if available. 

The financial instruments we have allocated to this level 

mainly comprise equities, investment funds (except property 

funds) and fixed-interest securities (bearer bonds) for 

which either a stock market price is available or prices are 

provided by a price quoter on the basis of actual market 

transactions. We have also allocated derivatives traded on 

the stock market to Level 1. 

Assets allocated to Level 2 are valued using models based 

on observable market data. For this, we use inputs directly 

or indirectly observable in the market, other than quoted 

prices. If the financial instrument concerned has a fixed 

contract period, the inputs used for valuation must be 

observable for the whole of this period. The financial 

instruments we have allocated to this level mainly comprise 

borrowers’ note loans, covered bonds, subordinated 

securities and derivatives not traded on the stock market. 

For assets allocated to Level 3, we use valuation techniques 

not based on inputs observable in the market. This 

is only permissible insofar as no observable market data 

are available. The inputs used reflect ERGO’s assumptions 

regarding the factors which market players would consider 

in their pricing. We use the best available information for 

this, including internal company data. The financial instruments 

allocated to this level of the fair value hierarchy 

largely comprise investments in private equity, in renewable 

energy (RENT) as well as in real-estate funds, certain 

credit structures, and investments in affiliated companies 

and associates measured at fair value. We also allocate 

insurance derivatives and derivative components that are 

separated from the host insurance contract to Level 3. 

Owing to their leverage effect, changes in individual inputs 

may significantly affect the fair value shown for instruments 

measured under Level 3. If we make such adjustments in 

measuring fair value in the individual case, we explain the 

resultant effects.





Net investment result 

The net investment result comprises regular income, 

income from write-ups, gains and losses on the disposal 

of investments, other income, write-downs of investments, 

management expenses, interest charges and other 

expenses. Regular income and expenses from investments 

not measured at fair value through profit or loss are calculated 

in accordance with the effective interest method, i. e. 

any premiums or discounts are deducted from or added 

to the acquisition costs, with impact on profit or loss, until 

maturity. 

Impairment 

At each balance sheet date, we assess whether there is 

any substantial objective evidence of impairment in a 

financial asset or group of financial assets. Impairments 

in value are recognised as an expense in the income 

statement. IAS 39.59 contains a list of factors providing 

evidence of impairment of such financial assets. In 

addition, IAS 39.61 states that for equity investments, a 

significant or prolonged decline in the fair value of the 

investment below its acquisition cost is objective evidence 

of impairment. These rules are given more concrete form 

by means of internal guidelines. For equities quoted on 

the stock exchange, we assume a significant decline in fair 

value if the market value at the review date is at least 20% 

below the average purchase price or has been lower than 

this amount for at least six months. In the case of fixedinterest 

securities and loans, the main basis for establishing 

impairment is an indication of substantial financial 

difficulty on the part of the issuer, the current market 

situation or media reports on the issuer. 

We determine acquisition cost on the basis of the average 

purchase price. In the case of an impairment, a writedown 

is made to the fair value at the balance sheet date, 

i. e. generally the publicly quoted market price. If there is 

a further fall in the fair value of equity investments that 

have already been written down once, a further writedown 

recognised in the income statement is made again 

immediately. Such impairments recognised in profit or 

loss may not be reversed through profit or loss. If, in a 

subsequent period, the reasons for the impairment of 

fixed-interest securities or loans cease to apply, the impairment 

is reversed, with impact on the income statement. 

The resultant carrying amount may not exceed the original 

amortised cost. 

In impairment tests of our financial assets (with the 

exception of equity investments), we generally first assess 

whether objective evidence of impairment exists for items 

that are individually significant. If this is not the case, 

as well as in cases of individually insignificant items, the 

impairment test is carried out collectively on the basis 

of groups of similar financial assets. Assets that are individually 

assessed for impairment are not included in the 

collective assessment. The amount of the probable loss is 

measured as the difference between the amortised cost of 

the asset or group of assets and the present value of estimated 

future cash flows. The impairment thus determined 

is recognised as an expense. We generally deduct impairments 

directly from the items concerned on the assets 

side without using a value adjustment account. If, in a 

subsequent period, the reasons for the impairment cease 

to apply, the impairment is reversed, with impact on the 

income statement. The resultant carrying amount may not 

exceed the original amortised cost. 

Investments for the benefit of life insurance policyholders 

who bear the investment risk 

These are investments for policyholders under unit-linked 

life insurances. They are measured at fair value. Unrealised 

gains or losses from changes in fair value are included in 

the investment result. These are matched by corresponding 

changes in the technical provisions (equity and liabilities 

item D: Gross technical provisions for life insurance policies 

where the investment risk is borne by the policyholders), 

which are included in the technical result. The change in 

technical provisions also includes changes from additional 

premium components. Recognising these investments at 

fair value, with impact on profit or loss, avoids valuation 

mismatches that would otherwise occur due to different 

measurement of the corresponding provisions.





Ceded share of technical provisions 

The share of technical provisions for business ceded by us 

is determined from the respective technical provisions in 

accordance with the terms of the reinsurance agreements; 

cf. the notes on equity and liabilities item C: Gross technical 

provisions. Appropriate allowance is made for the credit 

risk. 

Receivables 

Current tax receivables and other receivables are accounted 

for at nominal value. Adjustments are undertaken where 

there is an indication of substantial impairments; see Notes 

on assets, Item B: Investments – Impairment. 

Current tax receivables comprise current taxes on income 

of the individual companies, based on their respective 

national taxation. Other tax receivables are shown under 

“other receivables”. 

Cash at banks, cheques and cash in hand 

Cash and cheques are accounted for at face value. 

Deferred acquisition costs 

Deferred acquisition costs comprise commissions and 

other variable costs directly connected with acquisition or 

renewal of insurance contracts. In life business and longterm 

health insurance, acquisition costs are capitalised 

and amortised over the duration of the contracts. This is 

done either proportionally to the premium income (FAS 60) 

or proportionally to the respective contracts’ expected 

gross profit margins calculated for the relevant year of the 

contract term (FAS 97, 120). The allocation of individual 

contracts to the FASs concerned is shown in the notes on 

equity and liabilities item C: Gross technical provisions. 

In determining the amount of amortisation, we take into 

account an actuarial interest rate and changes resulting 

from the disposal or withdrawal of contracts from the portfolio. 

In property-casualty business and short-term health 

insurance, the deferred acquisition costs are amortised on 

a straight-line basis over the average term of the policies, 

from one to five years. Deferred acquisition costs are regularly 

tested for impairment using a liability adequacy test 

as per IFRS 4; cf. Notes on equity and liabilities item C: 

Gross technical provisions. 

Deferred tax assets 

Under IAS 12, deferred tax assets must be recognised in 

cases where asset items have to be valued lower, or liability 

items higher, in the consolidated balance sheet than 

in the tax accounts of the Group company concerned and 

these differences will be eliminated at a later date with a 

corresponding effect on taxable income (temporary differences). 

Also included are tax assets deriving from tax 

loss carry-forwards. We take into account the tax rates of 

the countries concerned and the consolidated company’s 

respective tax situation; in some cases, for purposes of 

simplification, we use uniform tax rates for individual circumstances 

or subsidiaries. Changes in tax rates and tax 

legislation that have already been adopted by the government 

at the balance sheet date are taken into account. 

Deferred tax assets are recognised if a realisation is 

probable. 

Other assets 

Other assets are generally carried at amortised cost. The 

owner-occupied property recognised under other assets 

is accounted for as outlined under the Notes on assets, 

item B: Investments – Land and buildings. Plant and equipment 

is amortised mainly on a straight-line basis, the 

underlying useful lives ranging between 1 and 50 years. 

Impairment losses, and impairment losses reversed, in the 

Group’s owner-occupied property and plant and equipment 

are distributed between the underwriting functional areas. 


Equity 

The item “issued capital and capital reserve” contains the 

amounts that ERGO Versicherungsgruppe AG equity holders 

have paid in on shares. The capital reserve is reduced 

by the externally generated costs directly connected 

with equity capital measures, after taking tax effects into 

account.





Under retained earnings, we show the profits which 

consolidated companies have earned and retained since 

becoming part of the Group and income and expenses 

resulting from changes in the consolidated group. In 

addition, the adjustment amount resulting from changes 

in accounting policies for earlier periods not included in the 

consolidated financial statements is recorded in the opening 

balance of the retained earnings for the earliest prior 

period reported. 

Other reserves contain unrealised gains and losses resulting 

from the recognition of other securities available for 

sale at fair value and from investments in non-consolidated 

affiliated companies and in associates that we do 

not value at equity. These reserves also include unrealised 

gains and losses from the valuation of associates at equity, 

differences resulting from the currency translation of 

foreign subsidiaries’ figures, and the valuation result from 

the hedging of cash flows. Write-ups of equity investments 

available for sale are also recognised in this equity item. 

Non-controlling interests are accounted for in the balance 

sheet as part of equity. These are the shares of third 

parties in the equity of subsidiaries that are not wholly 

owned directly or indirectly by ERGO Versicherungsgruppe 

AG. Direct minority interests in special funds and in partnerships 

are recognised under “other liabilities”. The portion 

of the result attributable to non-controlling interests 

is shown in the consolidated result. 

Subordinated liabilities 

Subordinated liabilities are liabilities which, in the event of 

liquidation or insolvency, are only satisfied after the claims 

of other creditors. They are measured at amortised cost in 

accordance with the effective interest method. 

Gross technical provisions 

The technical provisions are shown as gross figures in the 

balance sheet, i. e. before deduction of the ceded share; 

cf. the explanatory remarks on assets item D: Reinsurers’ 

share in technical provisions. The ceded share is calculated 

and accounted for on the basis of the individual reinsurance 

agreements. Acquisition costs for insurance contracts 

are capitalised and amortised over the terms of the contracts; 

cf. Notes on assets item G: Deferred acquisition costs. The 

measurement of technical provisions is based on US GAAP 

FAS 60, FAS 97 and FAS 120. 

Unearned premiums 

Unearned premiums are accrued premiums already written 

for future risk periods. These premiums are calculated 

separately for each insurance policy pro rata temporis. The 

posting of unearned premiums is restricted to short-term 

underwriting business. This concerns both property insurance 

and parts of accident and health insurance. 

Provision for future policy benefits 

The provision for future policy benefits in long-term underwriting 

business is posted for the actuarially calculated 

value of obligations arising from policyholders’ guaranteed 

entitlements. As well as life insurance, this concerns portions 

of health and personal accident insurance, insofar as 

the business is conducted as life insurance. Measurement 

is usually based on the prospective method by determining 

the difference between the present values of future 

benefits and future premiums. The actuarial biometric 

assumptions used for their calculation include, in particular, 

assumptions relating to mortality, disablement and 

morbidity, as well as assumptions regarding interest-rate 

development, lapses and costs. These are estimated on a 

realistic basis at the time the insurance contracts are concluded, 

and they include adequate provision for adverse 

deviation to make allowance for the risks of change, error 

and random fluctuations. Biometric accounting principles 

based on the tables prepared by the German Association 

of Actuaries (Deutschen Aktuarvereinigung e. V.) are used 

for German life insurance business. For other insurance 

business, it is mainly tables from the respective national 

actuary associations which are used. Life insurance is discounted 

using a technical interest rate which is limited to 

the respective maximum technical interest rate approved 

by the regulatory body. In health insurance, discount rates 

are chosen that reflect the best estimate of expected 

investment income, less a safety margin. 

The actuarial assumptions are adjusted if this is shown 

to be necessary by a liability adequacy test in accordance 

with IFRS 4.





The measurement of the provisions for future policy 

benefits depends on the type of contract, being based 

either on FAS 60 (life insurance without performancerelated 

participation in surplus, health insurance), on 

FAS 97 (life insurance on the universal life model and unitlinked 

life insurance) or on FAS 120 (life insurance with 

performance-related participation in surplus). 

For contracts in accordance with FAS 60, the provision 

for future policy benefits is calculated from the present 

value of estimated future policy benefits (including claims 

adjustment expenses) less the present value of future net 

level premiums. Net level premium is that part of the gross 

premium that is needed to finance future policy benefits. 

Life insurance contracts with limited premium payment are 

generally valued in accordance with FAS 97. 

For all other contracts as per FAS 97, an account is kept 

to which net level premiums and interest earnings are 

credited and from which risk premiums and administration 

expenses are debited, not all credits and debits being contractually 

fixed at the time the contracts are concluded. 

The provision for future policy benefits for life insurance 

where policyholders bear the investment risk themselves 

(unit-linked life insurance) is shown separately under 

Equity and liabilities, Item D: Gross technical provisions for 

life insurance policies where the investment risk is borne by 

the policyholders. 

In the case of contracts as per FAS 120, the provision for 

future policy benefits comprises the net level premium 

reserve and liabilities for terminal dividends. The net level 

premium reserve is calculated from the present value of 

guaranteed policy benefits (including acquired bonuses but 

excluding claims adjustment expenses) less the present 

value of future net level premiums. The net level premium 

is the net premium less the portion of the premium envisaged 

for covering claims adjustment expenses. The actuarial 

assumptions are generally the same as those used for 

premium calculation. The provision for terminal dividends 

is built up proportionally with a fixed share of the expected 

gross profit margins. The same method is used for this as 

for determining the amortisation of the deferred acquisition 

costs. 

Here the same technical interest rate and biometric calculation 

principles are employed which are used as the basis 

to calculate tariff premiums or surrender values. Additionally, 

a reserve is set up to cover administration expenses 

for non-contributory periods. The calculation principles 

of tariffs are regularly verified by the regulatory authorities 

or actuarial associations and include safety margins 

which take into account risks caused by change, error or 

random fluctuations. To the extent that safety margins in 

the biometric calculation principles have been used up in 

full, there may be a need to set up additional provisions 

or to conduct an unscheduled amortisation of deferred 

acquisition costs. This kind of adjustment is carried out in 

accordance with the IFRS 4 adequacy test if the adequacy 

of technical provisions can no longer be guaranteed when 

taking all calculation principles into account. A possible 

deficit is recognised in the income statement. The adequacy 

of the provision for future policy benefits is assessed 

on a regular basis using current, realistic estimates on the 

calculation principles, the proportionate amount of the 

investment return as well as future surplus-sharing for 

contracts which include this aspect. 

The biometric calculation principles used for life insurance 

policies are considered adequate. The actuaries in charge 

consider the mortality tables used to be adequate and to 

contain a sufficient safety margin for policies with mortality 

risk. Should, however, the trend towards a sustained 

improvement in life expectancy continue, a transfer of 

additional sums to the provision for future policy benefits 

cannot be ruled out in future. 

The accrual of the provision for terminal bonuses is carried 

out as scheduled over the term of the contracts by means 

of annual transfers and interest. For life insurance policies 

recorded in the balance sheet in accordance with FAS 97 

and FAS 120, transfers are based on expectations for 

future income which have already been used for capitalising 

deferred acquisition costs and on the income already 

realised in the past. Assumptions applied here are checked 

regularly and adjusted where necessary. The provision 

for terminal bonuses is recalculated following a necessary 

adjustment to the actuarial calculation principles. 

This normally leads to a change in the amount which is 

transferred. The revaluation of the provision for terminal 

bonuses is carried out within the provision for premium 

refunds without affecting profit or loss. It is for this reason 

that fluctuations do not have any effect on the consolidated 

result.





As far as contracts of a primarily investment nature 

are concerned (e. g. unit-linked life policies and AltZerG 

products with prospective entitlement in accordance with 

the German law on the Certification of Old-age Provision 

Agreements), assessment for the provision for future 

policy benefits is based on FAS 97. The provision for future 

policy benefits is made up from additions to the amounts 

invested, the performance of underlying investments and 

withdrawals in line with contracts plus provision for terminal 

bonuses and provision for “unearned parts of premiums” 

for these products. 

The main reasons for using FAS 60 in health insurance are 

the absence of causality in the generation and utilisation 

of surpluses and the usually lifelong term of health insurance 

policies calculated in the same manner as for life insurance 

policies. 

The provision shown is calculated as the difference 

between the present value of future insurance benefits, 

including claims adjustment expenses and the present 

value of future premiums. Here the share of the gross 

premium is taken into account which is required to finance 

future insurance benefits including the costs of claims 

settle ments (net level premium). The provision is calculated 

on current actuarial calculation bases. These include 

adequate safety margins in either direction. 

The provision which is based on Section 12 a, para. 2 of the 

German law on the Supervision of Insurance Companies 

(VAG), is not part of the provision for future policy benefits, 

but rather recorded in the provision for premium refunds. 

Provision for outstanding claims 

Provisions for outstanding claims are for payment obligations 

arising from insurance contracts where the size of the 

claim or the timing of the payment is still uncertain. Part 

of the provisions is for known claims for which individually 

calculated provisions are posted. Another part is for 

expenses for claims whose occurrence is not yet known 

(e. g. because they have not been reported yet or have not 

yet manifested themselves). A third class of provisions 

covers claims which are known but whose extent has 

turned out to be greater than originally foreseen. All these 

provisions include expenses for internal and external loss 

adjustment costs. Provisions for outstanding claims are 

based on estimates: the actual payments may be higher or 

lower. The amounts posted are the realistically estimated 

future amounts to be paid; they are calculated on the basis 

of past experience and assumptions about future developments 

(e. g. social, economic or technological factors). 

As regards industrial, property and transport business, 

provisions are set up for individual claims. In these lines of 

business, provisions for as yet unreported claims are based 

on past experience. 

Provisions for reinsurance business generally follows 

statements made by the ceding insurers. Provisions for 

outstanding claims are largely not discounted with the 

exception of some provisions concerning occupational disability, 

liability and annuities in workers’ compensation and 

other property-casualty lines of business. When determining 

provisions for outstanding claims, ERGO uses a range 

of actuarial projection methods, which comprise the chain 

ladder method and the Bornhuetter-Ferguson method. 

When applying the statistical method, we consider major 

losses separately. The standard actuarial methods used 

are applied to both the run-off triangles of payments 

as well as to the run-off triangles of the claims reported, 

meaning that we get a range of estimates for the final 

claims. A realistic estimated value is determined for the 

final claim within this range. 

Provisions for premium refunds 

Apart from non-performance-related premium refunds, 

this item contains in particular performance-related 

premium refunds for life, health and personal accident 

insurance. In health insurance, the non-performancerelated 

premium refunds also comprise sums which must 

be set up in accordance with Section 12 a of the German 

Insurance Supervision Act (VAG). According to national regulations, 

the provision only has to be set up for the German 

insurance business. Insofar as the provision for premium 

refunds has been set up, a valuation is generally conducted 

retrospectively based on regulations imposed by the regulatory 

authorities or as a result of provisions governing the 

individual contract. For those life insurance and pension 

fund companies which are subject to supervision by the 

Federal Financial Supervisory Authority (BaFin), the supervisory 

regulations of the German Insurance Supervision Act 

and the regulation pertaining to minimum appropriation 

must be observed.





In addition, provisions are set up for deferred premium 

refunds for the policyholders’ shares in the differences in 

valuation between IFRS and local accounting principles 

based on the expected future proportions on profit participation. 

For unrealised gains and losses from investments 

available for sale, which are recognised directly at equity, 

provisions for deferred premium refunds are set up without 

having an effect on the income statement; otherwise 

changes to this provision are charged against the income 

statement. To calculate the provision for deferred premium 

refunds for the amount stemming from the differences 

in valuation, proportions are used of between 50% and 

92.5% after tax. We have raised the assumption as to what 

degree policyholders will participate in bonuses in German 

life insurance in the future. The proportions for calculating 

the allocation to the provision for deferred premium 

refunds have been adjusted accordingly. 

When terminal bonuses are determined, they are reclassified 

from the provision for premium refunds to the provision 

for future policy benefits without affecting profit or 

loss. Here the funds reserved for terminal bonuses and 

available funds in the provision for performance-related 

premium refunds are used. If the provision for terminal 

bonuses exceeds these amounts, parts of the provision for 

deferred premium refunds are reclassified as well. 

All technical provisions are regularly subjected to a liability 

adequacy test in accordance with IFRS 4. If current experience 

shows that the provisions posted on the basis of the 

original assumptions less the related deferred acquisition 

costs and the present value of the related premiums 

are inadequate to cover the expected future benefits, we 

adjust the relevant technical provisions with recognition 

in the income statement and disclose those under impairment 

losses/unscheduled changes in the Notes to the 

consolidated financial statements; see [2] Other intangible 

assets, [10] Deferred acquisition costs and [16] Provision for 

future policy benefits. The adequacy of unearned premiums 

and of the provision for outstanding claims is checked 

for the current realistically estimated future amounts to 

be paid. The adequacy of the provision for future policy 

benefits is assessed using current, realistic estimates on 

the calculation principles, the proportionate amount of the 

investment return as well as (for policies with profit participation) 

the future surplus-sharing. 

Gross technical provisions for life insurance policies 

where the investment risk is borne by the policyholders 

This item comprises provisions for future policy benefits 

in life insurance where policyholders bear the investment 

risk themselves (unit-linked life insurance). The value of 

the provision for future policy benefits essentially corresponds 

to the market value of the relevant investments 

shown under Assets, Item C: Investments for the benefit of 

life insurance policyholders who bear the investment risk. 

Besides this, under FAS 97 and in certain circumstances, 

additional premium components may have to be included; 

please refer to Notes on Equity and liabilities, Item C: Gross 

technical provisions. Changes in this provision are fully 

recog nised in the technical result. Insofar as these changes 

derive from unrealised gains and losses from alterations 

in the fair values of the related investments, they are 

matched by opposite changes of the same amount in 

the investment result. Recognising these investments at 

fair value, with impact on profit or loss, avoids valuation 

mismatches that would otherwise occur due to different 

measurement of corresponding provisions. 

Other provisions 

This item includes inter alia the provision for post-employment 

benefits. The companies within ERGO Insurance 

Group generally give commitments to their staff in the 

form of defined contribution plans or defined benefit plans. 

The type and amount of the pension obligations are determined 

by the conditions of the respective pension plan. 

In general, they are based on the staff member’s length 

of service and salary. Under defined contribution plans, 

the companies pay fixed contributions to an insurer or a 

pension fund. This fully covers the company’s obligations. 

Under defined benefit plans, the staff member is promised 

a particular level of retirement benefit either by the companies 

or by a pension fund. The company’s contributions 

needed to finance this are not fixed in advance. Where 

assets of a legally independent entity (e. g. a fund) are 

matched against pension obligations, which may only be 

used to cover the pension promise and the access of any 

creditors is denied (plan assets), these pension obligations 

are recognised after these assets have been deducted. 

Where the fair value of the assets exceeds the related outsourced 

pension obligations, this repayment claim must be 

shown under “other receivables”.





Pension obligations are recognised in accordance with 

IAS 19, using the projected unit credit method and based 

on actuarial studies. The calculation includes not only 

the pension entitlements and current pensions known 

on the balance sheet date but also their expected future 

development. 

The interest rate at which the pension obligations are discounted 

is based on the yields for long-term high-quality 

bonds (e. g. commercial or government bonds). Actuarial 

gains or losses from pension obligations and plan assets 

result from the deviation of actual risk experience from 

estimated risk experience. They are recognised directly in 

equity, without impact on profit or loss. 

The other provisions included in this item are established 

in the amount of the probable requirement. Such amounts 

are not discounted if the interest-rate effect is insignificant. 

Liabilities 

Liabilities comprise deposits retained on ceded business, 

current tax liabilities and other liabilities. Financial liabilities 

are generally recognised at amortised cost. Derivatives 

(financial derivatives, insurance derivatives and derivative 

components which have been separated from the host 

insurance contract) are recognised at fair value. Details on 

the calculation of the fair value are provided under Notes 

on assets, Item B: Investments. 

Current tax liabilities comprise current taxes on income 

of the individual companies, based on their respective 

national taxation. Other tax liabilities are shown under 

“other liabilities”. 

Tax liabilities for current taxes are posted – without discounting 

– in accordance with the probable tax payments 

for the year under review or previous years. Deferred tax 

obligations are shown under Equity and liabilities, Item G: 

Deferred tax liabilities. 

Direct minority interests in special funds are measured at 

fair value. 

Deferred tax liabilities 

Under IAS 12, deferred tax liabilities must be recognised 

if asset items have to be valued higher, or liabilities items 

lower, in the consolidated balance sheet than in the tax 

accounts of the reporting company and these differences 

will be eliminated at a later date with a corresponding 

impact on taxable income (temporary differences), see 

Notes on assets, Item H: Deferred tax assets. 

Foreign currency translation 

The currency used by ERGO Insurance Group in its reports 

is the euro (€). The balance sheets of foreign subsidiaries 

whose national currency is not the euro are translated in 

accordance with the functional currency principle using 

the year-end exchange rates, and their income statements 

using average quarterly exchange rates. Any exchange 

differences arising in the process are recognised in equity 

(reserve for currency translation adjustment). 

By contrast, currency translation differences are largely 

recognised in the income statement of our subsidiaries’ 

individual financial statements. This involves the translation 

of foreign currency items into the respective functional 

currency in accordance with IAS 21. An excess of 

assets over liabilities in a particular currency results on 

balance in a gain if that currency appreciates and in a loss 

if it falls in value. The reverse applies if cover is insufficient. 

The objective of our asset-liability management is to economically 

minimise excess or insufficient cover in foreign 

currencies within the Group. Insofar as this is done across 

Group companies with different functional currencies, it 

produces economically non-existent fluctuations in the 

consolidated result. Where exchange gains or losses occur 

in the translation of foreign-currency transactions into the 

national currencies of the consolidated companies, they 

are accounted for under “other non-operating income” and 

“other non-operating expenses” respectively. 

Beyond this, the impact of changes in exchange rates is 

reflected in period-to-period comparisons of all items in 

the income statement.



74 


Notes to the consolidated balance sheet – assets 

[1] Goodwill 

Major items included here are the goodwill of ERGO 

Previdenza, Milan, from the acquisition in the 2000 financial 

year. Goodwill positions which amount to more than 

€ 30 million of the total Group goodwill are considered to be 

significant in line with IAS 36.134 and IAS 36.135. 

Allocation of goodwill to cash-generating units 

For impairment tests, goodwill is allocated to those cashgenerating 

units that derive benefits from the synergies 

from the respective business combination. At the same 

time, the unit to which the goodwill has been allocated is 

the lowest level at which goodwill is monitored for internal 

management purposes. We have allocated the goodwill 

amounts to legal entities or groups of legal entities. 

Our goodwill at 31 December 2012 was allocated to a 

cash-generating unit. 

Development during the financial year 2012 

€ million 

Year of acquisition 2000 

Cash-generating units or group of cash-generating units 

ERGO 

Previdenza 


€ million 


€ million 

2011 

€ million 

Other Total Total 

Gross carrying amount at 31 December previous year 43.1 573.8 616.9 666.8 

Accumulated impairment losses at 31 December previous year 10.0 401.3 411.3 389.9 

Carrying amount at 31 December previous year 33.1 172.5 205.6 276.9 

Currency translation differences − 0.1 0.1 − 0.4 

Additions − − − − 

Disposals − − − 49.5 

Impairment losses − − − 21.4 

Carrying amount at 31 December financial year 33.1 172.6 205.7 205.6 

Accumulated impairment losses at 31 December financial year 10.0 369.2 379.2 411.3 

Gross carrying amount at 31 December financial year 43.1 541.8 584.9 616.9





The impairment tests of goodwill positions classified as 

significant were carried out under the following assumptions: 

The recoverable amount of ERGO Previdenza, Milan, was 

derived on the basis of the market-consistent embedded 

value, which is usual in personal lines insurance business. 

The capital market parameters and volatilities applied are 

based on the cut-off date on 31 December 2011 and were 

adapted for changed capital market data in the meantime. 

There were also no indications for the recognition of impairment 

losses. Sensitivity analyses were carried out on the 

assumed technical risks, costs, capital market parameters 

and volatilities. The results thereby obtained were always 

above the book value of the cash-generating unit. 

For the impairment tests on the remaining goodwill 

positions the following assumptions were made: 

• The recoverable amount was derived on the basis of the 

value-in-use method or the market-consistent embedded 

value concept. 

• The Capital Asset Pricing Model (CAPM) is used to calculate 

the discount interest rate. It is calculated from 

a risk-free base rate plus a risk premium, taking into 

account a beta factor specific to the business. To derive 

the capital cost components (risk loading, capital 

structure), a peer group of international insurers is used 

in accordance with IAS 36. The risk-free base rate as 

well as the beta factor are taken from market data. For 

periods beyond the detailed cash flow planning growth 

rates of between 0.5% and 1.5% were used. 

The calculation is carried out before tax. A reconciliation 

with the capital costs of the ERGO Insurance Group is not 

possible. Other goodwill figures totalling € 172.6 million 

(172.5 m) were allocated to several cash-generating units 

or groups of units. 

The goodwill impairment tests in the 2012 financial year 

showed no recognition of impairment losses (2011: € 21.4 m). 

• The discount rate employed to calculate the valuein-use 

figure was calculated as cost of capital and 

amounts to between 7.2% and 13.2%, depending on 

the respective cash-generating unit.





[2] Other intangible assets 

[2a] 

Development during 

the financial year 

Acquired 

insurance 

portfolios 

Self- 

developed 

Software 

Other 

Acquired 

brand 

names 

Acquired 

client 

bases 

Acquired 

licences/ 

patents 

distribution 

networks/ 

Selfdeveloped 

Other 

Other 

€ million € million € million € million € million € million € million € million € million 

Gross carrying amount 

at 31 December 

previous year 586.4 299.9 479.1 48.7 194.4 3.4 0.2 44.7 1,656.7 

Accumulated amortisation 

and accumulated 

impairment losses at 

31 December 

previous year 391.7 247.7 365.8 33.0 53.1 2.1 0.2 11.5 1,105.0 

Carrying amount 


previous year 194.7 52.2 113.3 15.8 141.3 1.2 − 33.2 551.7 


differences − − 2.4 − − − 0.1 0.7 3.2 

Change in 

consolidated group − − 1.4 − 1.2 − − − − − 1.0 − 3.6 

Additions 1.1 0.9 76.2 0.3 − − − 8.1 86.7 

Disposals − − 0.7 6.8 1.7 − − − 0.1 3.9 11.5 

Reclassification − 1.2 − 1.1 − − − − − 4.4 − 4.3 

Amortisation 37.8 6.7 42.0 1.4 11.5 0.4 − 2.9 102.7 

Impairment losses − − 0.1 12.9 − − − − 13.0 

Write-ups 12.8 − − − − − − − 12.8 

Carrying amount 


financial year 170.7 47.1 140.7 0.1 129.8 0.8 − 29.7 519.0 




31 December 

financial year 416.8 252.3 402.8 45.8 61.1 2.6 0.1 18.1 1,199.6 



financial year 587.5 299.4 543.5 45.9 191.0 3.4 0.1 47.8 1,718.6 

Total 

Acquired insurance portfolios comprise amortised book 

values of € 143.1 million (161.0 m) which stem from the 

acquisition of Bank Austria Creditanstalt Versicherung AG. 

Other intangible assets include rights equivalent to real 

property amounting to € 6.9 million (10.4 m). Additions 

mainly represent acquired software which, among other 

things, include the extension of portfolio management 

systems. 

Restrictions on disposals and pledges as security account 

for € – million (4.4 m). Commitments to acquire other 

intangible assets amount to € 1.0 million (1.7 m). Costs 

of € 0.1 million (15.8 m) for research and development 

incurred in connection with software projects were not 

capitalised but recognised as expenses.





[2b] 

Development during 

the previous year 

Acquired 

insurance 

portfolios 

Self- 

developed 

Software 

Other 

Acquired 

brand 

names 

Acquired 

client 

bases 

Acquired 

licences/ 

patents 

distribution 

networks/ 

Selfdeveloped 

Other 

Other 

€ million € million € million € million € million € million € million € million € million 


at 31 December 2010 639.1 287.5 470.5 51.0 249.6 2.4 − 34.0 1,734.2 




31 December 2010 400.1 241.8 355.6 29.2 79.6 1.7 − 4.0 1,111.9 

Carrying amount at 

31 December 2010 239.0 45.8 115.0 21.9 170.0 0.7 − 29.9 622.3 


differences − − − 3.6 − 0.4 − 0.8 − − − 0.3 − 5.1 

Change in 

consolidated group − 10.5 − 1.1 − 3.1 − − 0.1 − − 1.2 − 13.6 

Additions − 15.9 75.9 1.8 − 1.0 − 7.5 102.2 

Disposals − 1.7 21.3 − − 0.1 − 0.6 23.7 

Reclassification − 0.1 − 0.6 − − − − 0.1 − 0.4 

Amortisation 46.7 3.3 43.8 6.0 20.0 0.4 − 3.7 123.9 

Impairment losses 1.4 3.4 5.1 1.5 7.9 − − 1.0 20.3 

Write-ups 14.2 − − − − − − − 14.2 


31 December 2011 194.7 52.2 113.3 15.8 141.3 1.2 − 33.2 551.7 




31 December 2011 391.7 247.7 365.8 33.0 53.1 2.1 0.2 11.5 1,105.0 


at 31 December 2011 586.4 299.9 479.1 48.7 194.4 3.4 0.2 44.7 1,656.7 

Total





[3] Land and buildings, including buildings on third-party land 


€ million 

2011 

€ million 

Gross carrying amount at 31 December previous year 3,181.5 3,529.3 

Accumulated depreciation and impairment losses at 31 December previous year 834.3 810.4 

Carrying amount at 31 December previous year 2,347.1 2,718.9 

Currency translation differences 0.7 − 8.1 

Change in consolidated group − − 268.6 

Additions 22.1 34.0 

Disposals 33.8 36.9 

Write-ups 11.7 3.3 

Depreciation 50.8 56.9 

Impairment losses 38.8 44.7 

Reclassification 12.6 6.0 

Carrying amount at 31 December financial year 2,270.8 2,347.1 

Accumulated depreciation and impairment losses at 31 December financial year 890.4 834.3 

Gross carrying amount at 31 December financial year 3,161.2 3,181.5 

Fair value as at 31 December financial year 3,051.4 3,151.6 

Restrictions on disposals and pledges as security exist 

for land and buildings totalling € 723.4 million (742.2 m). 

Capitalised expenditure on buildings under construction 

stood at € 1.6 million (8.3 m) on the balance sheet cutoff 

date; contractual commitments to acquire property 

stood at € 20.3 million (7.6 m). 

Buildings are depreciated on a straight-line basis over 40 

to 55 years. Impairment losses and write-ups are generally 

caused by adjustments to market value. The valuation is 

performed for each site individually at the cut-off date, 

except where valuation units are formed. Valuations are 

mainly conducted by in-house appraisers or, in some 

instances, by external experts. They are largely based on 

ascertaining the sustainability of income and expenditure 

flows while taking into account the development of the 

market situation where the respective property is located. 

The fair value is calculated for each individual property by 

discounting future net payments at the time of valuation. 

Interest rates are applied according to the type of property 

involved: residential property 3.0% to 5.5%, commercial 

property 4.0% to 8.0% and retail property from 4.0% to 

8.25%.





[4] Investments in affiliated companies and associates 

The fair value of interests in associated companies, which 

are generally valued at equity, is € 762.7 million (776.0 m) 

at the balance sheet date. The fair value of interests in 

associated companies which are valued at equity includes 

interests amounting to € 69.0 million (62.2 m) for which 

publicly quoted market prices are available. In the financial 

year losses of € 4.3 million (11.4 m) incurred by associated 

companies were not recognised. Losses caused by associated 

companies but not recorded amount to a total of 

€ 30.1 million (25.8 m). 

The assets of all associated companies total € 5,427.0 million 

(5,722.2 m), the liabilities € 4,155.5 million (4,411.3 m), 

the annual results € − 20.1 million (7.1 m) and the turnover 

€ 1,441.1 million (715.5 m). For associated companies not 

valued at equity, the assets total € 87.1 million (91.5 m), 

liabilities € 61.2 million (64.6 m), annual results € 0.1 million 

(− 1.1 m), and turnover € 116.2 million (111.1 m). 

The full list of all shareholdings can be found in the “List of 

shareholdings as at 31 December 2012 in accordance with 

Section 313 para. 2 of the German Commercial Code”. 

Breakdown of investments in affiliated companies and associates 2012 

€ million 

2011 

€ million 

Affiliated companies 

Accounted for at fair value 76.1 120.7 

Associates 

Accounted for using the equity method 441.9 410.6 

Accounted for at fair value 10.2 12.3 

452.1 422.9 

Total 528.2 543.6 

[5] Loans 

[5a] 

Breakdown of loans Carrying amounts Fair values 


€ million 

2011 

€ million 


€ million 

2011 

€ million 

Mortgage loans 4,427.0 4,408.0 5,059.7 4,852.4 

Loans and advance payments on insurance policies 598.1 601.0 598.1 601.0 

Other loans 49,348.2 48,205.6 57,531.3 51,384.8 

Total 54,373.3 53,214.6 63,189.1 56,838.2 

Other loans comprise mainly pfandbriefs, government 

bonds, and promissory notes by banks. 

The fair value of loans is determined by recognised methods 

of valuation in line with the present value principle and 

taking into account observed market parameters





[5b] 

Rating categories 


Other securities 


€ million 

2011 

€ million 

AAA 21,950.6 23,954.6 

AA 20,556.2 17,250.6 

A 4,109.7 4,690.6 

BBB 1,750.4 804.3 

BB and less 544.3 170.8 

No rating 437.1 1,334.7 

Total 49,348.2 48,205.6 

The rating categories are based on those of the leading 

international rating agencies. In deviation from the purely 

economic view, the carrying amount of the loans represents 

the maximum exposure to credit risk at the balance 

sheet date, in accordance with IFRS 7. Virtually no credit 

risk exists in respect of the mortgage loans or the loans 

and advance payments on insurance policies. 

[5c] 

Maturity structure 


Fair values 

Loans 


€ million 

2011 

€ million 


€ million 

2011 

€ million 

Contractual period to maturity 

Up to one year 1,248.9 2,009.5 1,267.0 2,021.4 

Over one year and up to two years 1,984.7 1,358.1 2,089.5 1,395.9 

Over two years and up to three years 2,979.3 2,118.0 3,214.5 2,217.7 

Over three years and up to four years 2,014.9 3,013.8 2,202.9 3,221.7 

Over four years and up to five years 2,549.3 2,193.2 2,797.4 2,322.3 

Over five years and up to ten years 13,019.0 13,428.1 15,231.3 14,255.9 

Over ten years 30,577.2 29,093.9 36,386.5 31,403.3 

Total 54,373.3 53,214.6 63,189.1 56,838.2 

[6] Other securities 

[6a] 

Other securities – 


Unrealised 

Fair values 

held to maturity 

gains / losses 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


€ million 

2011 

€ million 

Government bonds − − − − − − 

Debt securities of banks 7.3 13.4 0.2 0.1 7.5 13.5 

Total 7.3 13.4 0.2 0.1 7.5 13.5





[6b] 

Allocation of investments measured at fair value 

to levels of the fair value hierarchy 

Other securities, available for sale 

Level 1 

€ million 

Level 2 

€ million 

Level 3 

€ million 


Total 

€ million 

Fixed-interest securities 42,681.1 11,885.8 812.5 55,379.4 

Non-fixed-interest securities 2,478.3 52.2 1,290.4 3,820.9 

Investments in affiliated companies and associates 

45,159.4 11,938.0 2,102.9 59,200.3 

Affiliated companies measured at fair value − − 76.1 76.1 

Associates measured at fair value − − 10.2 10.2 

Other securities at fair value through profit or loss 

− − 86.3 86.3 

Held for trading (including derivatives) 1 42.4 1,199.7 1.0 1,243.1 

Designated as at fair value through profit or loss − 168.9 − 168.9 

42.4 1,368.6 1.0 1,412.0 

Investments for the benefit of life insurance 

policyholders who bear the investment risk 5,957.0 − − 5,957.0 

Total 51,158.7 13,306.6 2,190.2 66,655.5 

Breakdown in % 77 20 3 100 

1 Including hedging derivatives. 

Reconciliation for investments 

allocated to Level 3 


available for sale 

Fixedinterest 

Non-fixedinterest 

Affiliated 

companies 

recognised 

at fair 

value 

Investments 

Other securities – at fair 

value through profit or loss 

Associates 1 Held for Designated as at 

trading 

(including 

derivatives) 2 

fair value through 

profit or loss 

Total 

€ million € million € million € million € million € million € million 


31 December 2011 140.6 1,066.3 120.7 12.3 − − 1,339.9 

Gains and losses 

Gains (losses) recognised 

in the income statement − 2.7 − 16.3 − 4.9 − 2.4 − − − 26.3 

Gains (losses) 

recognised in equity 13.7 23.5 2.1 0.5 − − 39.8 

11.0 7.2 − 2.8 − 1.9 − − 13.5 

Acquisitions 285.0 263.1 2.5 0.7 − − 551.3 

Disposals − 144.9 − 106.0 − 42.0 − 1.1 − 0.1 − − 294.1 

Transfer to/out of Level 3 521.0 58.3 − 2.3 − 0.7 − 577.6 

Changes in the market 

value of derivatives − 0.3 1.5 − 0.1 0.4 − 1.8 


31 December 2012 812.5 1,290.4 76.1 10.2 1.0 − 2,190.2 

Gains (losses) recognised in the 

income statement that are attributable 

to investments shown at the 

end of the financial year − 11.4 − 7.3 − − 18.8 

1 Recognised at fair value. 


In the financial year we reclassified a further part of the 

residual mortgage-backed securities (RMBS) in our portfolio 

from level 3 to level 2. Increased liquidity meant that we 

were able to revert to using only observable market data 

for these products. At the same time, some collaterialized 

loan obligations (CLO) and commercial mortgage-backed 

securities (CMBS) were reclassified from level 2 to level 3, 

since we also took into consideration parameters for their 

valuation which were not observable on the market due to 

a lack of liquidity.





Allocation of investments measured at fair value 


Other securities, available for sale 

Level 1 

€ million 

Level 2 

€ million 

Level 3 

€ million 

2011 

Total 

€ million 

Fixed-interest securities 37,558.1 13,229.9 140.6 50,928.6 

Non-fixed-interest securities 1,439.8 155.2 1,066.3 2,661.4 

Investments in affiliated companies and associates 

38,997.9 13,385.1 1,206.9 53,589.9 

Affiliated companies measured at fair value − − 120.7 120.7 

Associates measured at fair value − − 12.3 12.3 

Other securities at fair value through profit or loss 

− − 133.0 133.0 

Held for trading (including derivatives) 1 147.1 802.1 − 949.2 

Designated as at fair value through profit or loss − 164.5 − 164.5 

147.1 966.6 − 1,113.7 


policyholders who bear the investment risk 5,092.0 − − 5,092.0 

Total 44,237.0 14,351.7 1,339.9 59,928.6 

Breakdown in % 74 24 2 100 


Reconciliation for investments 

allocated to Level 3 



Fixedinterest 

Non-fixedinterest 

Affiliated 

companies 

recognised 

at fair 

value 

Investments 

Other securities – at fair 

value through profit or loss 

Associates 1 Held for Designated as at 

trading 

(including 

derivatives) 2 

fair value through 

profit or loss 

Total 

€ million € million € million € million € million € million € million 


31 December 2010 188.5 441.9 113.6 12.9 − − 756.8 

Gains and losses 

Gains (losses) recognised 

in the income statement 5.2 − 5.1 − 23.0 − 0.1 − − − 23.0 

Gains (losses) 

recognised in equity − 5.4 30.3 5.9 0.2 − − 31.0 

− 0.2 25.2 − 17.1 0.1 − − 8.0 

Acquisitions 95.8 203.1 58.0 0.1 − − 357.0 

Disposals − 91.9 − 47.6 − 35.8 − 0.8 − − − 176.0 

Transfer to/out of Level 3 − 51.6 443.8 1.9 − − − 394.1 

Changes in the market 

value of derivatives − − − − − − − 


31 December 2011 140.6 1,066.3 120.7 12.3 − − 1,339.9 

Gains (losses) recognised in the 

income statement that are attributable 

to investments shown at the 

end of the financial year 3.5 − 10.8 − − 7.3 

1 Recognised at fair value. 


Trading assets allocated to level 3 are exclusively made 

up of derivatives with the appropriate level allocation. 

The increase in capital investments allocated to level 3 is 

largely the result of the reclassification of CMBS.





[6c] 



Unrealised 

Fair values 


gains/losses 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


€ million 

2011 

€ million 

Fixed-interest securities 

Government bonds 

Germany 4,648.3 5,467.6 668.7 518.7 5,317.0 5,986.3 

Rest of EU 12,500.0 13,183.5 972.8 − 649.5 13,472.8 12,534.0 

USA 538.5 83.7 7.8 1.8 546.3 85.5 

Other 1,222.7 1,085.7 98.2 − 5.9 1,321.0 1,079.8 

18,909.6 19,820.5 1,747.5 − 134.9 20,657.1 19,685.6 

Corporate debt securities 24,681.7 23,429.8 2,328.9 730.2 27,010.7 24,160.1 

Other 6,982.5 6,745.8 729.1 337.1 7,711.7 7,082.9 

50,573.9 49,996.1 4,805.5 932.4 55,379.4 50,928.6 

Non-fixed-interest securities 

Shares 1,376.4 691.9 160.6 68.1 1,537.0 760.0 

Investment funds 

Equity funds 285.4 273.8 30.2 11.1 315.6 284.9 

Bond funds 599.4 407.8 35.0 − 1.1 634.4 406.7 

Real estate funds 477.4 481.7 15.8 10.0 493.3 491.7 

1,362.3 1,163.4 81.0 20.0 1,443.3 1,183.4 

Other 776.7 670.9 63.9 47.1 840.6 718.0 

3,515.4 2,526.2 305.5 135.2 3,820.9 2,661.4 

Total 54,089.2 52,522.3 5,111.0 1,067.6 59,200.3 53,589.9 

Quoted securities account for 4.0% (2.6%) of the given 

balance sheet value. 

About two thirds of the debt instruments issued by companies 

are pfandbriefs, bank bonds or issues by development 

banks and comparable institutions. The remaining portfolio 

comprises debt instruments of German local and regional 

authorities, with each single risk representing less than 

2.0%, issues by companies outside the banking sector and 

asset-backed securities/mortgage-backed securities which 

have above-average ratings. 

A sum of € 1,049.5 million (224.2 m) from unrealised gains/ 

losses totalling € 5,111.0 million (1,067.6 m) is contained 

in equity (other reserves) after deductions were made 

for expenditure on deferred premium refunds, deferred 

taxes and non-controlling interests as well as effects of 

consolidation. 

Restrictions on disposals and pledges as security account 

for € 188.5 million (102.2 m). 

€ 1,272,2 million (1,198.1 m) of securities shown are loaned 

to third parties. These securities continue to be recognised 

in our balance sheet, as the major opportunities and risks 

associated with them remain with the ERGO Insurance 

Group.





[6d] 

Other securities – at fair value through profit or loss 2012 

€ million 

2011 

€ million 

Held for trading 

Fixed-interest securities 58.4 59.3 

Non-fixed-interest securities 0.2 2.3 

58.6 61.6 

Derivatives 1,124.6 842.2 

Designated as at fair value through profit or loss 



168.9 164.5 

Total 1,352.1 1,068.2 

To ascertain the fair values of derivatives, listed prices, option 

price models and valuations by external sources were taken 

into account. There are no securities lent to third parties. 

[6e] 



Fair values 

Other securities – held to maturity 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


Up to one year 2.9 6.1 2.9 6.1 

Over one year and up to two years 4.2 2.9 4.3 2.9 

Over two years and up to three years 0.2 4.2 0.2 4.2 

Over three years and up to four years − 0.2 − 0.2 

Over four years and up to five years − − − − 

Over five years and up to ten years − − − − 

Over ten years − − − − 

Total 7.3 13.4 7.5 13.5 

[6f] 



Fair values 

Other securities – available for sale; fixed-interest securities 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


Up to one year 5,130.7 4,592.3 4,483.8 4,635.5 

Over one year and up to two years 3,971.4 4,533.4 4,100.3 4,610.0 

Over two years and up to three years 4,111.7 4,249.2 4,460.2 4,405.6 

Over three years and up to four years 4,675.0 4,131.4 4,958.9 4,198.3 

Over four years and up to five years 4,515.9 3,964.9 4,854.8 4,096.1 

Over five years and up to ten years 15,643.2 16,629.1 17,477.5 16,890.6 

Over ten years 12,525.8 11,895.8 15,043.9 12,092.4 

Total 50,573.9 49,996.1 55,379.4 50,928.6





[6g] 



Other securities – held to maturity 


€ million 

2011 

€ million 

AAA − − 

AA − 0.5 

A 7.0 12.5 

BBB − − 

BB and less − − 

No rating 0.3 0.3 

Total 7.3 13.4 



[6h] 

economic view, the carrying amount of the securities 

represents the maximum exposure to credit risk at the 

balance sheet date, in accordance with IFRS 7. 


Fair values 

Other securities – available for sale; fixed-interest securities 


€ million 

2011 

€ million 

AAA 23,872.8 26,895.5 

AA 13,112.8 9,778.0 

A 8,842.7 7,835.9 

BBB 8,389.1 4,555.2 

BB and less 1,034.6 1,739.6 

No rating 127.4 124.5 

Total 55,379.4 50,928.6 



[6i] 



balance sheet date, in accordance with IFRS 7. 


Fair values 

Other securities – at fair value through profit or loss; fixed-interest securities 


€ million 

2011 

€ million 

AAA 33.8 37.4 

AA 52.0 79.7 

A 94.3 60.4 

BBB 45.3 31.6 

BB and less − − 

No rating − 10.5 

Total 225.3 219.7 





balance sheet date, in accordance with IFRS 7.





[6j] 

Disposal proceeds 

Other securities – available for sale 


€ million 

2011 

€ million 

Fixed-interest securities 17,512.6 12,716.2 

Non-fixed-interest securities 

Quoted 2,065.5 2,827.9 

Unquoted 119.7 84.7 

2,185.2 2,912.6 

Total 19,697.8 15,628.8 

[6k] 

Realised gains and losses 



€ million 

2011 

€ million 

Gains on disposal 



526.3 606.1 

Losses on disposal 



529.3 361.8 

Total − 3.0 244.3 

[6l] Derivatives 

Derivatives are financial instruments, the fair value of 

which is derived from one or more underlying assets. 

Derivatives are used to hedge against currency, interestrate 

and market risks. This is done at the individual Group 

company level within the framework of individual supervisory 

regulations and additional internal company directives. 

The risk of default is virtually non-existent in the case 

of products traded on the stock exchange. 

Over-the-counter derivatives, on the other hand, harbour 

a theoretical risk in the amount of the replacement costs. 

Consequently, only top-quality counterparties are chosen 

by the ERGO Insurance Group for these transactions. 

For derivatives as at 31 December 2012, ERGO Insurance 

Group has received collateral in the form of securities with 

a minimum rating of AA which may be sold or passed on 

as security. The fair value of this collateral is € 621.6 million 

(260.9 m). 

Disclosure of derivatives by balance sheet item 

Fair value 

Positive 

Negative 

Qualifying for hedge 

accounting 

No 

Balance sheet item 2012 

€ million 

2011 

€ million 

Investments, other 

securities, held for trading 1,124.6 842.2 

Yes Other assets 59.8 45.4 

No 

Yes 

Liabilities, 

other liabilities − 74.0 − 117.9 

Total 1,110.5 769.7





[6m] 

Derivatives – open items 

The table below shows the fair values and related par 

values of all our open items, broken down into risk types. 

Positive and negative fair values have been set off against 

each other. At € 1,110.5 million (769.7 m), open items 

accounted for 0.8% (0.6%) of the balance sheet total on 

31 December 2012. 

Interest rate risks associated with life insurance are 

hedged using swaptions and total return swaps. These 

options for obtaining a fixed interest rate are shown in 

the category “interest-rate risks/over-the-counter” At the 

reporting date, the fair value of the said derivatives was 

€ 427.2 million (537.4 m), while the underlying nominal 

amount was € 2,841 million (5,039.8 m). The investment 

result from derivatives includes income stemming from 

fluctuations in the value of these items amounting to 

€ 124.8 million (355.0 m). 

Cash flow hedges 

Cash flow hedges play a role in countering fluctuations 

that may be caused, for example, by variable interest payments. 

At ERGO Insurance Group, cash flow hedges are 

largely used to hedge against interest-rate risks. We mainly 

use interest-rate swaps for this. Changes to the fair value 

of the hedging instrument are recognised directly in equity 

for this purpose. Only when the actual cash inflow or outflow 

takes place, caused by the hedged circumstance, is 

the relevant equity item reversed with recognition in the 

income statement. 

The change to the fair value of the hedging instrument 

assignable to the ineffective portion of the hedging is negligible 

on the reporting date. The equity item from cash 

flow hedges was € 5.2 million (4.7 m) on the reporting date. 

The net fair value of derivatives falling into this category on 

the reporting date stood at € 46.8 million (39.1 m). 

Although the derivatives basically serve to hedge risks 

economically at ERGO Insurance Group, only a portion of 

€ 46.8 million (39.1 m) meets the strict requirements of 

IAS 39 for hedge accounting. 

IAS 39 distinguishes between fair value hedges, cash flow 

hedges and the hedging of a net investment in a foreign 

business. For ERGO Insurance Group, only cash flow hedges 

are currently relevant.





Derivatives – open positions Periods to maturity in years Total 

< 1 1−2 2−3 3−4 4−5 > 5 2012 2011 

€ million € million € million € million € million € million € million € million 


Traded on the stock exchange 

Fair values − 1.3 − − − − − − 1.3 − 4.0 

Notional principal amounts 739.4 − − − − − 739.4 602.5 

Over-the-counter 

Fair values 65.6 107.3 74.9 68.7 45.4 652.5 1,014.4 825.1 

Notional principal amounts 524.8 2,087.8 793.8 548.8 440.0 5,541.4 9,936.5 10,016.8 

Total 

Fair values 64.3 107.3 74.9 68.7 45.4 652.5 1,013.1 821.1 

Notional principal amounts 1,264.2 2,087.8 793.8 548.8 440.0 5,541.4 10,675.9 10,619.3 

Currency risks 


Fair values − − − − − − − − 0.1 



Fair values 49.6 − − − − − 2.8 46.8 − 63.7 

Notional principal amounts 3,645.9 − − − − 218.5 3,864.4 2,884.5 

Total 

Fair values 49.6 − − − − − 2.8 46.8 − 63.8 

Notional principal amounts 3,667.4 − − − − 218.5 3,885.9 2,904.5 

Equity and index risks 


Fair values 34.2 − − − − − 34.2 − 0.3 

Notional principal amounts 1,174.9 − − − − − 1,174.9 320.9 


Fair values − 0.6 15.7 0.3 − − 16.6 13.6 

Notional principal amounts 58.4 48.2 63.0 3.1 − − 172.7 157.5 

Total 

Fair values 34.2 0.6 15.7 0.3 − − 50.8 13.3 

Notional principal amounts 1,233.3 48.2 63.0 3.1 − − 1,347.6 478.3 

Credit risks 


Fair values − − − − − 1.2 − − 1.2 − 2.2 

Notional principal amounts 6.1 − − − 49.0 − 55.1 71.9 

Commodity risks 


Fair values − − − − − − − 0.6 


Insurance risks 


Fair values − − − − − 1.0 1.0 0.7 

Notional principal amounts − − − − − 6.7 6.7 6.9 

Other Risks 


Fair values − − − − − − − − 0.1 

Notional principal amounts − − − − − − − 1.6 

Total 

Fair values 148.1 107.9 90.6 69.1 44.2 650.6 1,110.5 769.7 

Notional principal amounts 6,185.3 2,135.9 856.7 551.9 489.0 5,766.7 15,985.6 14,097.1





[6n] 

The following table shows the period until maturity and 

amount of cash flows hedged at the balance sheet date. 

Notional principal amounts of hedged transactions 2012 

€ million 

2011 

€ million 


Up to one year – − 

Over one year and up to two years 25.0 − 

Over two years and up to three years – 25.0 

Over three years and up to four years 25.0 − 

Over four years and up to five years 25.0 25.0 

Over five years 314.0 339.0 

Total 389.0 389.0 

[7] Other investments 

Other investments mainly comprise deposits retained on 

assumed reinsurance business at € 152.8 million (171.0 m) 

and deposits with banks totalling € 1,520.9 million (1,255.2 m). 

The latter includes € 119.4 million (104.3 m) from repurchase 

agreements that have been booked by us as the 

lender. 

By contrast to the purely economic view, the book value 

of these other financial assets represents the maximum 

credit exposure at the balance sheet date, in accordance 

with IFRS 7. 

Since deposits with banks predominantly have a term of 

less than one year, the fair values are largely the same as 

the book values. Restrictions on disposals and pledges as 

security exist for deposits with banks totalling € 6.6 million 

(27.3 m). 

[8] Reinsurers’ share in technical provisions 

Reinsurers’ share in technical provisions 2012 

€ million 

2011 

€ million 

Unearned premiums 122.0 143.1 

Provision for future policy benefits 3,627.9 3,586.7 

Provision for outstanding claims 638.1 859.4 

Other technical provisions 172.5 186.6 

Total 4,560.6 4,775.7





[9] Other receivables 

[9a] 

Receivables from insurance representatives account for 

€ 407.4 million (464.9 m) of amounts receivable from 

direct insurance business. Receivables include amounts 

of € 265.4 million (377.7 m) which result from contracts 

without significant risk transfer. These contracts are not 

subject to IFRS 4. By contrast to the purely economic 

view, the carrying amount of the receivables represents 

the maximum exposure to credit risk at the cut-off date, 

in accordance with IFRS 7. As other receivables generally 

have a term of less than one year, the fair values largely 

correspond to the carrying amounts. 

Other receivables 2012 

€ million 

2011 

€ million 

Interest and rent 2,010.1 2,029.3 

Amounts receivable on direct business 1,042.7 1,051.7 

Amounts receivable from contracts without significant risk transfer 265.4 377.7 

Profit-unrelated tax receivables 121.2 117.6 

Accounts receivable on reinsurance business 125.9 109.9 

Miscellaneous receivables 856.7 646.0 

Total 4,422.0 4,332.2 

[9b] 

Maturity structure of other receivables 



€ million 

2011 

€ million 


Up to one year 4,254.8 4,140.9 

Over one and up to two years 35.4 31.1 

Over two years and up to three years 30.0 37.5 

Over three years and up to four years 29.5 28.6 


Over five years and up to ten years 0.6 29.4 

Over ten years 36.5 34.9 

Total 4,422.0 4,332.2





[10] Deferred acquisition costs 

Deferred acquisition costs (gross) 2012 

€ million 

2011 

€ million 

Status at 31 December previous year 6,413.7 6,522.9 


Newly deferred acquisition costs 966.8 1,001.6 

Amortisation − 847.0 − 803.9 

Impairment losses − 172.6 − 248.8 

Change in consolidated group/other effects − 19.7 − 32.7 

Carrying amount at 31 December financial year 6,362.9 6,413.7 

Scheduled changes include amortisation as well as scheduled 

return on interest. Non-scheduled changes comprise writeups 

and write-downs resulting from changes made to the 

assumptions on which calculations are based and which 

need to be readjusted. 

Assumptions concerning the long-term interest level had to 

be revised in the financial year to take account of the longterm 

regular interest return on investments. The current 

lower interest margin and the revision of other assumptions 

led to impairment losses of deferred acquisition costs. 

[11] Deferred tax assets 

The deferred tax assets and liabilities recognised in the 

consolidated balance sheet concern the following balance 

sheet items: 

[11a] 

Causes of origin Assets Liabilities 


€ million 

2011 

€ million 


€ million 

2011 

€ million 

Assets 

Intangible assets 15.0 8.2 77.4 89.8 

Investments 806.1 1,197.5 1,299.0 1,183.6 

Deferred acquisition costs 1.8 1.6 546.7 572.3 

Other assets 569.2 513.6 445.5 392.5 

Total Assets 1,392.1 1,720.9 2,368.6 2,238.2 


Technical provisions (net) 405.1 458.5 369.7 442.4 

Other accrued liabilities 404.8 170.8 76.8 86.8 

Other liabilities 106.3 91.7 6.7 15.6 

Total equity and liabilities 916.2 721.0 453.2 544.8 

Off balance sheet 

Loss carry-forwards and tax credits 92.6 64.2 − − 

Total 2,401.0 2,506.1 2,821.8 2,783.0 

Of the change of € − 144.0 million (155.4 m) in net deferred 

tax liabilities, € 75.6 million (195.8 m) was recognised in 

earnings and € − 219.6 million (− 40.4 m) without impact on 

profit or loss. 

No deferred taxes were recorded for temporary differences 

of € 113.8 million (104.8 m) in conjunction with shares in 

subsidiaries and associated companies – so-called outside 

basis differences. 

Deferred taxes on loss carry-forwards were recognised 

as assets to the extent that the tax result planning led 

with sufficient certainty to an expected use. We have 

broken down the existing deferred tax assets on loss carryforwards 

in the following table.





[11b] 

Development of deferred tax assets for 

loss carry-forwards and tax credits 

31 December 

previous 

Subsequent additions 

and reduc 

Additions 

due to new 

Set off 

against 

31 December 

financial year 

year tions due to 

changes in valuation 

allowances 

losses income/ 

Deconsolidation 

€ million € million € million € million € million 

Deferred tax assets for 

Corporation tax loss carry-forwards 58.0 3.7 25.3 − 6.9 80.1 

Trade tax loss carry-forwards 6.2 6.3 1.8 − 1.8 12.5 

Loss carry-forwards from capital losses − − − − − 

Tax credits − − − − − 

Total 64.2 10.0 27.1 − 8.7 92.6 

[11c] 

Tax loss carry-forwards 

and tax credits 

Corporation tax loss carry-forwards 

For which 

deferred tax 

assets are 

recognised 

For which 

deferred tax 

assets are not 

recognised 

2012 2011 

Total 

For which 

deferred tax 

assets are 

recognised 

For which 

deferred tax 

assets are not 

recognised 

Total 


Expiring in up to three years 29.7 118.0 147.7 13.1 67.2 80.3 

Expiring in over three years 

and up to ten years 103.8 23.7 127.5 112.5 66.4 178.9 

Expiring in over ten years − 5.7 5.7 − 2.7 2.7 

Not expiring 205.6 201.2 406.8 130.6 252.2 382.8 

Trade tax loss carry-forwards 

339.1 348.6 687.7 256.2 388.5 644.7 

Not expiring 79.7 131.8 211.5 39.5 168.1 207.6 

Loss carry-forwards 

from capital losses 

Expiring in up to three years − − − − − − 


and up to ten years − − − − − − 

Expiring in over ten years − − − − − − 

Not expiring − − − − − − 

Tax credits 

Expiring in up to three years − − − − − − 


and up to ten years − − − − − − 

Expiring in over ten years − − − − − − 

Not expiring − − − − − − 

Total 418.8 480.4 899.2 295.7 556.6 852.3





[12] Other assets 

[12a] 

Breakdown 2012 

€ million 

2011 

€ million 

Tangible assets 1,672.3 1,674.5 

Assets from insurance contracts 392.7 436.5 

Other 171.9 212.6 

Total 2,237.0 2,323.5 

[12b] 

Tangible assets – 

development during the financial year 

Owner- 

occupied 

property 


€ million 

Operating 

and office 

equipment 


€ million 

Other 


€ million 

Total 


€ million 

Gross carrying amount at 31 December previous year 2,084.7 564.8 6.0 2,655.6 

Accumulated depreciation and accumulated impairment 

losses at 31 December previous year 610.2 365.6 5.3 981.2 

Carrying amount at 31 December previous year 1,474.6 199.2 0.7 1,674.5 

Currency translation differences 3.8 1.6 − 5.4 

Change in consolidated group − − 1.2 − − 1.2 

Additions 39.2 61.9 0.3 101.4 

Disposals 4.6 5.9 − 10.5 

Write-ups 22.4 − − 22.4 

Depreciation 40.7 68.1 0.4 109.2 

Impairment losses 2.0 − − 2.0 

Reclassification − 8.3 − − − 8.3 

Carrying amount at 31 December financial year 1,484.3 187.4 0.6 1,672.3 

Accumulated depreciation and accumulated impairment 

losses at 31 December financial year 625.0 364.9 5.5 995.4 

Gross carrying amount at 31 December financial year 2,109.3 552.3 6.1 2,667.8





Development in 2011 

Owner- 

occupied 

property 

2011 

€ million 

Operating 

and office 

equipment 

2011 

€ million 

Other 

2011 

€ million 

Total 

2011 

€ million 

Gross carrying amount at 31 December 2010 2,083.9 553.6 6.1 2,643.6 

Accumulated depreciation and accumulated 

impairment losses at 31 December 2010 577.8 350.1 5.1 932.9 

Carrying amount at 31 December 2010 1,506.1 203.5 1.0 1,710.6 

Currency translation differences − 6.0 − 1.8 − − 7.7 

Change in consolidated group − 21.5 − 11.3 − − 32.9 

Additions 49.2 93.5 0.3 142.9 

Disposals 5.5 6.7 − 12.1 

Write-ups 0.4 − − 0.4 

Depreciation 36.3 77.5 0.6 114.3 

Impairment losses 5.8 1.5 − 7.3 

Reclassification − 6.0 1.0 − − 5.1 

Carrying amount at 31 December 2011 1,474.6 199.2 0.7 1,674.5 

Accumulated depreciation and accumulated 

impairment losses at 31 December 2011 610.2 365.6 5.3 981.2 

Gross carrying amount at 31 December 2011 2,084.7 564.8 6.0 2,655.6 

The fair value of land and buildings amounts to 

€ 1,571.4 million (1,566.7 m).



95 


Notes to the consolidated balance 

sheet – equity and liabilities 

[13] Equity 

[13a] Issued capital and capital reserve 

On the balance sheet date the Company’s issued share 

capital was € 196,279,504.20, and was broken down into 

75,492,117 individual bearer no-par-value shares. 

The authorised capital which allowed the Board of Management 

to raise the share capital with the consent of the 

Supervisory Board during the period ending on 8 May 2012 

in one or more steps by a total of up to € 97.5 million through 

the issue of up to € 37.5 million in new bearer no-par-value 

shares (authorised capital) has lapsed. 

No convertible bonds or bonds with warrants were issued 

up until 8 May 2012. Consequently, the contingent capital 

of € 97.5 million earmarked for these convertible bonds or 

bonds with warrants can no longer be used. 

[13c] Claims equalisation reserves 

Retained earnings include € 319.6 million (352.2 m) in 

claims equalisation reserves. These reserves are set up 

in line with national legal provisions in order to compensate 

for fluctuations in claims in future years. Under IFRS 

accounting, they are included in equity. 

[13d] Other reserves 

Other reserves contain € 12.8 million (12.9 m) in unrealised 

gains and losses from the valuation at equity of associated 

companies and € 1,123.6 million (304.7 m) unrealised gains 

and losses from mainly other securities available for sale 

as well as interests in unconsolidated affiliates. 

[13b] Retained earnings 

Retained earnings can be broken down into the statutory 

reserve of ERGO Versicherungsgruppe AG of € 0.5 million 

and other retained earnings of the Group whose development 

and composition are detailed in the overview on 

pages 52 f.




Notes to the consolidated balance sheet – equity and liabilities 

[13e] 

Unrealised gains and losses on investments and hedging 2012 

€ million 

2011 

€ million 

Non-consolidated affiliated companies and associates not accounted for using the equity method 77.8 82.8 

Associates accounted for using the equity method 23.1 23.1 

Hedging 46.6 35.4 


Fixed-interest 4,805.5 932.4 

Non-fixed-interest 305.5 135.2 

5,111.0 1,067.6 

Less: 

Provision for deferred premium refunds recognised in equity 3,708.7 856.5 

Deferred taxes recognised in equity 432.4 60.3 

Non-controlling interests 18.7 10.8 

Consolidation and currency translation effects − 42.9 − 40.9 

Total 1,141.6 322.2 

[13f] 

Tax effects in the income and expenses 

recognised directly in equity 


Before tax Tax After tax Before tax Tax After tax 


Currency translation 34.2 − 34.2 − 43.6 − − 43.6 

Unrealised gains and losses on investments 1,200.7 372.2 828.5 − 3.9 1.9 − 5.8 

Change resulting from valuation at equity − 0.7 − − 0.7 − − − 

Change resulting from hedging 0.3 − 0.1 0.4 10.0 3.1 6.9 

Actuarial gains and losses on 

defined benefit plans − 506.9 − 158.8 − 348.1 44.8 13.3 31.5 

Other changes 5.6 − 5.6 − 8.4 − − 8.4 

Income and expenses recognised 

directly in equity 733.3 213.4 519.9 − 1.1 18.3 − 19.4





[13g] 

Non-controlling interests 2012 

€ million 

2011 

€ million 

Unrealised gains and losses on investments 18.7 10.8 

Share in consolidated result 13.3 15.3 

Other equity 115.0 142.9 

Total 146.9 168.9 

In the 2012 financial year, we acquired an additional 25.4% 

of the shares in ERGO Versicherung Aktiengesellschaft, 

Vienna (previously VICTORIA-VOLKSBANKEN Ver sicherungs 

aktien gesellschaft, Vienna). 

[14] Subordinated liabilities 

Subordinated liabilities include subordinated loans from 

Munich Re on the one hand. 

On the cut-off date the fair value of subordinated liabilities 

came to € 1,225.7 million (971.9 m). 

The item also comprises bearer bonds of Bank Austria 

Creditanstalt Versicherung AG (BA-CA Versicherung) on 

paid-in supplementary capital on the other. 

[15] Unearned premiums 

[15a] 

Unearned premiums 2012 

€ million 

2011 

€ million 

Gross 1,869.9 1,833.8 

Reinsurers’ share 122.0 143.1 

Net 1,747.9 1,690.7 

[15b] 

Development of unearned premiums (gross) 2012 

€ million 

2011 

€ million 


Currency translation effects 76.2 − 108.4 

Change in consolidated group − 90.0 − 125.1 

Addition / disposal portfolio − − 

Premiums written 17,091.3 18,518.7 

Earned premiums 17,041.4 18,335.3 

Status at 31 December financial year 1,869.9 1,833.8





[16] Provision for future policy benefits 

[16a] 

Provision for future policy benefits 2012 

€ million 

2011 

€ million 

Gross 95,544.2 94,012.3 

Reinsurers’ share 3,627.9 3,586.7 

Net 91,916.3 90,425.6 

In 2012 the German Federal Court of Justice ruled on a 

number of issues of major importance concerning the termination 

of life insurance contracts. Important aspects of 

its ruling relate to the calculation of acquisition costs and 

surrender values. As a result of this ruling, the provision for 

future policy benefits has been raised in the German life 

insurance sector. 

[16b] 

Gross provision for future policy benefits according to actuarial interest rates 2012 

€ million 

2011 

€ million 

Actuarial interest rate ≤ 2.5% 9,375.7 7,330.0 

Actuarial interest rate > 2.5% and ≤ 3% 15,696.3 17,775.2 

Actuarial interest rate > 3% and ≤ 3.5% 29,229.0 27,136.3 

Actuarial interest rate > 3.5% and ≤ 4% 16,575.1 16,571.9 

Actuarial interest rate > 4% 20,553.8 20,784.7 

Without actuarial interest rate 4,114.2 4,414.2 

Total 95,544.2 94,012.3 

[16c] 

Development of gross provision for future policy benefits 2012 

€ million 

2011 

€ million 



Changes 

Scheduled 1,069.4 758.2 

Unscheduled − − 

In consolidated group − 15.9 − 1,034.1 

Other 467.8 687.3 

Status at 31 December financial year 95,544.2 94,012.3 

The change of € 452.6 million (472.1 m) shown under ‘Other’ 

represents savings contributions for capitalisation products. 

The scheduled changes in the provision for future 

policy benefits includes changes resulting from the prospective 

calculation due to premium payments, claims 

and the unwinding of discounting in the financial year. 

In the context of determining the net level premium of a 

foreign subsidiary on a non-performance-related basis, the 

planned change to the provisions for future policy benefits 

for the previous year was adjusted by € 104.1 million and is 

now shown under ‘Other’ as savings contributions for capitalisation 

products. (For more information, see the section 

‘Changes in accounting policies’ on pages 58 f.).





[17] Provision for outstanding claims 

[17a] 

Provision for outstanding claims 2012 

€ million 

2011 

€ million 

Gross 8,049.4 7,561.8 


Net 7,411.3 6,702.4 

The gross provision for outstanding claims comprises level 

premium reserve for pensions from health, motor, accident 

and liability insurance amounting to € 414.1 million (373.2 m). 

These were calculated based on actuarial principles with 

a discount rate of up to 4.0%. 

[17b] 

Development in the financial year 2012 

€ million 

2011 

€ million 


Claims expenses (including expenses for claims settlement) 

Financial year 13,417.0 14,958.8 

Previous years − 315.8 − 326.7 

Total 13,101.1 14,632.1 

Thereof: payments (including payment for claims settlement) 

Financial year 10,419.9 11,747.8 

Previous years 1,991.4 2,576.3 

Total 12,411.3 14,324.1 

Other changes 41.6 − 56.3 



[17c] 

Expected payments from the provisions for outstanding claims 

in property-casualty business 


% 

2011 

% 

Up to one year 37.8 41.0 

Over one year and up to five years 37.1 35.8 


Over ten years and up to fifteen years 6.3 5.5 

Over fifteen years 4.7 4.9 

Total 100.0 100.0 

When ascertaining the expected payout dates concerning 

the provision for outstanding claims, it should be mentioned 

that these are of course associated with a considerable 

degree of uncertainty.





[17d] Net run-off results for business posted in line with property-casualty insurance 

Claims payments for the individual accident years (per calender year, net) 

€ million Accident year 

Calender year ≤ 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total 

2002 1,467.0 − − − − − − − − − − − 

2003 787.6 987.0 − − − − − − − − − − 

2004 376.0 493.3 1,033.9 − − − − − − − − − 

2005 256.9 198.2 516.5 1,065.2 − − − − − − − − 

2006 189.8 80.5 169.2 553.6 1,053.4 − − − − − − − 

2007 138.9 43.0 80.4 176.1 567.0 1,214.7 − − − − − − 

2008 110.4 40.3 49.7 88.1 183.4 623.5 1,335.3 − − − − − 

2009 99.7 23.5 34.4 48.2 90.3 181.1 670.9 1,443.9 − − − − 

2010 72.9 19.2 21.3 35.6 50.1 97.4 201.1 717.3 1,588.4 − − − 

2011 70.7 11.4 18.0 28.0 38.1 58.3 108.1 222.9 788.1 1,593.3 − − 

2012 − 96.4 − 26.3 − 2.9 3.2 − 11.2 7.8 39.1 81.4 193.0 769.9 1,586.5 2,544.2 

Claims reserve for the individual accident years at the respective reporting dates (net) 


Reporting date ≤ 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total 

31 Dec 2002 2,548.4 − − − − − − − − − − − 

31 Dec 2003 1,727.9 1,062.8 − − − − − − − − − − 

31 Dec 2004 1,294.1 597.1 1,157.9 − − − − − − − − − 

31 Dec 2005 1,127.1 319.3 527.2 1,243.1 − − − − − − − − 

31 Dec 2006 914.8 249.6 359.4 582.3 1,259.3 − − − − − − − 

31 Dec 2007 847.1 193.4 273.1 366.1 565.3 1,319.6 − − − − − − 

31 Dec 2008 659.0 185.7 211.0 266.4 357.7 586.7 1,452.9 − − − − − 

31 Dec 2009 568.8 123.0 173.1 227.9 261.2 374.5 648.5 1,549.8 − − − − 

31 Dec 2010 481.3 104.0 138.8 169.8 214.4 282.7 418.2 677.7 1,637.3 − − − 

31 Dec 2011 403.4 76.1 133.0 133.9 157.8 226.0 314.3 434.5 738.8 1,698.8 − − 

31 Dec 2012 495.0 118.7 123.9 132.5 168.6 218.1 297.4 383.1 552.0 787.5 1,694.7 4,971.5 

Ultimate loss for the individual accident years at the respective reporting dates (net) 


Reporting date ≤ 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total 

31 Dec 2002 4,015.4 − − − − − − − − − − − 

31 Dec 2003 3,982.6 2,049.8 − − − − − − − − − − 

31 Dec 2004 3,924.8 2,077.5 2,191.8 − − − − − − − − − 

31 Dec 2005 4,014.7 1,997.9 2,077.5 2,308.3 − − − − − − − − 

31 Dec 2006 3,992.1 2,008.7 2,079.0 2,201.1 2,312.7 − − − − − − − 

31 Dec 2007 4,063.3 1,995.5 2,073.1 2,161.0 2,185.7 2,534.3 − − − − − − 

31 Dec 2008 3,985.6 2,028.0 2,060.6 2,149.3 2,161.5 2,424.9 2,788.2 − − − − − 

31 Dec 2009 3,995.1 1,988.8 2,057.1 2,159.1 2,155.3 2,393.9 2,654.7 2,993.7 − − − − 

31 Dec 2010 3,980.5 1,989.0 2,044.1 2,136.6 2,158.5 2,399.4 2,625.6 2,839.0 3,225.7 − − − 

31 Dec 2011 3,973.3 1,972.6 2,056.3 2,128.7 2,140.1 2,401.1 2,629.8 2,818.7 3,115.3 3,292.1 − − 

31 Dec 2012 3,968.6 1,988.9 2,044.2 2,130.5 2,139.6 2,401.0 2,652.0 2,848.6 3,121.5 3,150.8 3,281.2 29,726.9 

Currencyadjusted 

net 

run-off result 46.8 60.9 147.6 177.8 173.1 133.3 136.2 145.1 104.3 141.3 n. a. 1,266.3 

Change 

2011 to 2012 4.7 − 16.3 12.1 − 1.8 0.4 0.1 − 22.2 − 30.0 − 6.2 141.3 n. a. 82.1





The values in the run-off triangles cover virtually 100% of 

our Group’s portfolio of property-casualty business. The 

final amount in any one year of occurrence comprises all 

payments made for that year up to the reporting date, 

plus the claims reserve at the reporting date. If all losses 

incurred were known on the balance sheet date, the ultimate 

loss status for the year in question would remain 

the same. The run-off triangles are based on figures 

adjusted for exchange rate effects. To this end, all figures 

are translated from the respective local currency into the 

Group currency (euro), consistently using the exchange 

rates applicable at the end of the year under review (i. e. 

at 31 December 2012). This also ensures that neutral net 

run-off results in the original currency (i. e. where the ultimate 

loss originally estimated for the year of occurrence 

and current loss estimate concur) do not lead to currencyrelated 

run-off effects when expressed in the Group 

currency.





[18] Provision for premium refunds and policyholders’ dividends 

[18a] 

Provision for premium refunds and policyholders’ dividends 2012 

€ million 

2011 

€ million 

Gross 13,602.9 9,853.9 


Net 13,536.2 9,786.4 

[18b] 

Gross provision for premium refunds and policyholders’ dividends 2012 

€ million 

2011 

€ million 

Provision for premium refunds (based on national regulations) 6,399.8 5,707.8 

Provision for deferred premium refunds 

Recognised directly in equity 3,671.2 856.0 

Recognised in profit or loss 3,532.0 3,290.1 

7,203.2 4,146.1 

Total 13,602.9 9,853.9 

[18c] 


€ million 

2011 

€ million 

Provision for premium refunds (based on national regulations) 


Change in provision 692.0 519.7 


Provision for deferred premium refunds 


Change in consolidated group − 1.3 

Changes resulting from unrealised gains and losses on investments (recognised directly in equity) 2,815.2 236.6 

Changes resulting from other revaluations (recognised in profit or loss) 241.8 − 104.0 


Total provision for premium refunds 

Gross 13,602.9 9,853.9 


Net 13,536.2 9,786.4 

[18d] 

The surplus allocation from direct bonuses in life insurance 

business amounts to € 198.9 million (257.4 m). It is granted 

in addition to the performance-related premium refund.





[19] Other technical provisions 

Other technical provisions 2012 

€ million 

2011 

€ million 

Gross 95.5 119.0 


Net − 10.3 − 0.1 

[20] Gross technical provisions for life insurance policies where the investment risk is borne by policyholders 


€ million 

2011 

€ million 




Savings premiums 760.4 797.5 

Unrealised gains/losses on fund assets 598.6 − 258.8 

Withdrawal for expenses and risk 78.5 73.5 

Withdrawal for benefits 406.6 309.2 

Other 107.6 103.0 


These provisions are valued retrospectively. The withdrawal 

from premiums for technical risks and the provision for 

future policy benefits are conducted on the basis of cautious 

assumptions concerning anticipated mortality and disability. 

Here, as with the provision for future policy benefits 

for non-unit-linked life insurance, the underlying calculation 

is based on best estimates with adequate provision for 

safety margins. The provisions are directly covered by the 

investments for the benefit of life insurance policyholders 

who bear the investment risk. Marginal amounts in relation 

to these investments arise as a result of including unearned 

revenue liability in these provisions.





[21] Provisions for pensions and similar benefits 

[21a] 

For the majority of staff employed with the ERGO Insurance 

Group, Group companies have either undertaken retirement 

provision directly or by means of payments made to 

private institutions. The nature and extent of pension sums 

are geared towards the respective terms of the pension 

scheme in question (pension terms, specific contractual 

promises, etc.), and are generally based on the length of 

service and salary of the person concerned. A distinction 

is made between defined contribution and defined benefit 

pension schemes. As far as defined contribution plans are 

concerned, member companies within the Group pay premiums 

to insurers on a voluntary basis as a result of terms 

in a contract. After paying the premiums, the companies 

do not have any further benefit obligations. Regular premium 

payments amounting to € 26.9 million (27.1 m) were 

expenses incurred during the current year. 

Expenditure on premiums payable to state-run schemes 

amounted to € 96.0 million in the financial year. Defined 

benefit plans are financed within the ERGO Insurance 

Group by means of provisions for pension fund liabilities, 

which consist of both current pensions as well as entitlements 

to pensions payable in the future. Provisions for 

pension fund liabilities are calculated throughout the 

Group using the projected unit credit method in line with 

IAS 19 (revised in 2004). This involves calculating future 

obligations using actuarial methods with a realistic estimate 

of relevant variables. Pension benefits anticipated on 

the basis of dynamic parameters at the beginning of the 

actual retirement period are spread over the employee’s 

entire period of active employment. 

Change in the present value of defined benefit obligations under defined benefit plans 2012 

€ million 

2011 

€ million 


Currency translation differences 1.8 2.1 


Current service cost 36.9 39.7 

Interest cost 64.8 60.2 

Actuarial gains / losses 556.2 − 42.9 

Paid pension benefits − 46.4 − 42.0 

Past service cost 11.2 9.5 

Other − 3.1 − 0.7 


[21b] 

Change in the plan assets for defined benefit plans in the financial year 2012 

€ million 

2011 

€ million 

Status at 31 December previous year 146.6 133.4 



Expected return 7.3 6.5 

Actuarial gains / losses 8.3 4.8 

Capital transfer to plan assets 21.7 11.9 


Other − 3.5 − 3.7 

Status at 31 December financial year 178.2 146.6 

The defined benefit pension schemes also include benefits 

for medical care. The present value of earned rights for 

these benefits was € 152.9 million (95.4 m) on the cut-off 

date.





[21c] 

Change in the reimbursement rights for defined benefit plans in the financial year 2012 

€ million 

2011 

€ million 

Status at 31 December previous year 91.8 77.3 

Currency translation differences − − 


Expected return 4.7 3.4 

Actuarial gains / losses 9.7 − 0.3 

Capital transfer 11.5 11.6 


Other − 13.6 1.3 

Status at 31 December financial year 101.1 91.8 

Insurance claims stem from reinsurance which has been 

taken out to cover the pension obligations. 

[21d] 

Funded status of the defined benefit plans 2012 

€ million 

2011 

€ million 

Unfunded obligations 

Present value 1,729.1 1,169.3 

Past service cost not yet recognised − − 

Other 0.1 0.1 

Net balance sheet liability 1,729.2 1,169.4 

Wholly / partly funded obligations 

Present value 229.7 168.1 

Fair value of plan assets − 178.2 − 146.6 

Past service cost not yet recognised − − 

Other receivables − − 

Other − − 

Net balance sheet liability 51.5 21.5 

Total net balance sheet liability 1,780.7 1,190.9 

[21e] 

Change in the provision for defined benefit plans in the financial year 2012 

€ million 

2011 

€ million 




Expenses 100.9 101.6 


Capital transfer to plan assets − 21.7 − 11.9 

Transfer to other receivables − − 

Actuarial gains / losses recognised in equity 546.3 − 48.4 

Other 3.5 3.5 

Status at 31 December financial year 1,780.7 1,190.9





[21f] 

Breakdown of expenses booked in the financial year 2012 

€ million 

2011 

€ million 

Current service cost 36.9 39.7 

Interest cost 64.8 60.2 

Less 

Expected return on plan assets − 7.3 − 6.5 

Expected return on reimbursements − 4.7 − 3.4 

Amortisation of past service cost 11.2 9.5 

Other − 2.1 

Total 100.9 101.6 

The actual return on plan assets amounts to € 15.7 million 

(11.4 m), and the actual return on reimbursements 

to € 14.4 million (3.1 m). The expenses are shown mainly 

under ‘Operating expenses’ and ‘Expenses for claims and 

benefits’ in the consolidated income statement. 

Actuarial gains/losses included in the income and expenses 

for the financial year amount to € 539.3 million (− 46.7 m) 

and € 692.7 million (153.4 m) cumulative, taking currency 

fluctuations and other changes into account. 

[21g] 

Breakdown of plan assets to cover pension obligations 2012 

% 

2011 

% 


Fixed-interest securities and loans 69.5 73.6 

Real estate 0.5 0.6 

Other 12.8 10.0 

Total 100.0 100.0 

[21h] 

The consolidated companies used the following assumptions 

(weighted average values) in order to calculate their 

pension obligations: 

Assumptions 2012 

% 

2011 

% 

Discount rate 3.0 5.0 

Expected rate of return on fund assets 3.9 4.9 

Expected rate of return on reimbursements 3.0 5.0 

Future increases in entitlement / salary 2.3 2.4 

Future pension increases 1.9 1.9 

Medical cost trend rate 2.8 2.5





[21i] 

The expected rate of return on plan assets is determined 

on the basis of anticipated long-term capital yields. A one 

percent change in costs for medical care would have the 

following impact on the amount of pension commitments 

and pension expenditure: 

Increase by 

one percentage point 

Reduction by 

one percentage point 


Present value of defined benefit obligations 34.2 − 26.2 

Pension expenses 2.4 − 1.8 

Capital transfers to plan assets amounting to € 1.3 million 

(1.2 m) are expected for the 2012 financial year. 

[21j] 

Other figures for the current financial year 

and previous years 


€ million 

2011 

€ million 

2010 

€ million 

2009 

€ million 

2008 

€ million 

Present value of defined benefit obligations 

(excluding medical-care benefits) 1,805.9 1,242.0 1,224.2 1,117.1 883.3 

Plan assets 178.2 146.6 133.4 114.4 95.7 

Not covered by plan assets 1,627.7 1,095.4 1,090.8 1,002.7 787.6 

Experience adjustments arising 

on the plan liabilities 1.3 − 4.1 − 2.5 14.1 2.0 

Experience adjustments arising on the plan assets − 0.2 − 0.2 − 0.2 0.1 0.1 

[22] Other provisions 

[22a] 

Other provisions 2012 

€ million 

2011 

€ million 

Provision for 

Earned commission 196.0 171.5 

Outstanding invoices 110.8 109.7 

Early-retirement benefits / semi-retirement 101.9 141.1 

Impending losses 70.5 53.0 

Other in-house staff and field representatives’ remuneration 57.8 48.6 

Holiday and overtime pay 44.9 39.5 

Anniversary benefits 44.8 39.4 

Bonuses 36.2 34.0 

Sales contests 17.2 20.8 

Miscellaneous 829.0 649.1 

Total 1,509.2 1,306.7 

The provisions for early retirement and semi-retirement 

and for anniversary benefits are mainly long-term, whereas 

the provisions for commissions, outstanding invoices, holiday 

and overtime pay and miscellaneous are essentially 

short-term. 

Other provisions include amounts totalling € 219.1 million 

(243.7 m) for restructuring measures as part of the 

“Continuous Improvement in Competitiveness” project and 

€ 258.1 million (–) for the restructuring of our sales forces in 

Germany.





[22b] 

Other provisions – development during the financial year 2012 

€ million 

2011 

€ million 




Consumption 1,172.1 1,031.1 

Release 73.2 113.2 

Discounting effects 5.4 4.3 

Additions 1,435.5 1,107.2 

Other changes 0.2 − 


[23] Other liabilities 

[23a] 

Other liabilities 2012 

€ million 

2011 

€ million 

Deposits retained on ceded business 4,101.3 4,179.3 

Accounts payable on direct insurance business 3,569.0 3,715.2 

Amounts due to banks 282.9 320.8 

Profit-unrelated tax liabilities 191.1 162.3 

Accounts payable on reinsurance business 85.9 84.5 

Interest and rents 53.3 57.1 

Accruals and deferred income 11.0 12.5 

In connection with social security 6.6 7.6 

Miscellaneous other liabilities 1,061.3 1,138.4 

Total 9,362.3 9,677.6 

Liabilities resulting from direct insurance business mainly 

take the form of liabilities vis-à-vis policyholders resulting 

from accumulated surplus-sharing, premium deposits 

and contracts without a significant risk transfer. Deposits 

retained on ceded business serve as collateral for technical 

provisions covering business ceded to reinsurers and retrocessionaires, 

and therefore do not lead to any cash flows. 

Changes to deposits retained on ceded business generally 

result from changes in the relevant technical provisions 

covering ceded business.





[23b] 

The table below shows the contractual maturities on 

liabilities. As liabilities from direct insurance business are 

directly linked to the underlying insurance business, the 

resulting liquidity risk can only be explained together with 

the corresponding insurance contracts. Deposits retained 

on ceded business do not have a fixed maturity date, 

their release is generally dependent on the run-off of the 

corresponding provisions. Consequently, both items are 

not taken into account in the table below. 

Other liabilities 



€ million 

2011 

€ million 


Up to one year 1,335.6 1,422.8 

Over one year and up to two years 6.7 12.7 

Over two years and up to three years 1.6 30.9 

Over three years and up to four years 30.7 6.9 



Over ten years 36.4 91.8 

Total 1,692.0 1,783.2 

[23c] 

Allocation of other liabilities measured at fair value 


Level 1 Level 2 Level 3 

€ million € million € million 


Total Level 1 


Level 2 Level 3 


Total 

€ million 

Other liabilities – derivatives 6.7 67.2 − 74.0 9.7 108.3 − 117.9 

Only derivatives with a negative market value are currently 

valued at fair value under ‘Other liabilities’.



110 


Notes to the consolidated income statement 

[24] Premiums 

[24a] 

Premiums 2012 

€ million 

2011 

€ million 

Total premiums 18,561.5 20,269.5 

Gross premiums written 17,091.3 18,518.7 

Change in unearned premiums (− = expense) − 49.9 − 183.5 

Gross earned premiums 17,041.4 18,335.3 

Ceded premiums written 1,011.7 1,018.9 

Change in unearned premiums (reinsurers’ share) (− = income) − 9.4 − 15.0 

Ceded premiums 1,002.2 1,004.0 

Net earned premiums 16,039.1 17,331.3 

In accordance with international accounting principles the 

premiums from the gross provision for premium refunds 

and policyholders’ dividends are not stated as premiums 

but reduced in the change in the provision for future 

policy benefits. In German life insurance these amount 

to € 62.0 million (76.0 m) and in German health insurance 

to € 245.1 million (320.9 m). As regards premiums for life 

insurance products where the investment risk is borne by 

the policyholder, only those parts of the premiums used to 

cover the risks and costs are recorded as the premium.





[24b] 

Gross premiums written 

by business areas and lines of business 


€ million 

2011 

€ million 

Life Germany 3,930.1 4,165.0 

Health 4,932.5 5,974.5 

Property-casualty Germany 3,137.8 3,087.3 

Thereof: 

Motor 625.8 623.1 

Personal accident 700.2 711.3 

Fire and property 558.1 538.0 

Liability 505.2 488.1 

Transport and aviation 143.5 124.9 

Legal expenses 419.3 421.1 

Other 185.7 180.8 

Direct insurance 956.9 924.3 

Thereof: 

Life 482.2 497.9 

Health 360.7 312.8 

Motor 15.6 16.1 

Personal accident 37.5 37.2 

Other 61.0 60.4 

Travel insurance 460.1 485.3 

International 3,673.9 3,882.4 

Thereof: 

Life 1,355.9 1,454.5 

Property-casualty 2,318.0 2,427.9 

Thereof: 

Motor 1,027.3 1,090.9 

Legal expenses 625.7 587.2 

Other 665.0 749.8 

Total 17,091.3 18,518.7 

[24c] 

Gross premiums written 

by countries 


€ million 

2011 

€ million 

Germany 13,161.0 13,284.6 

Poland 1,008.6 1,011.4 

Austria 552.0 572.0 

Belgium 445.7 844.7 

Italy 406.3 497.7 

Turkey 301.6 306.3 

Great Britain 226.1 209.6 

The Netherlands 209.5 208.9 

Other 780.5 1,583.5 

Total 17,091.3 18,518.7





[25] Income from technical interest 

The income statement for the Group splits the operational 

result into the technical and non-technical result, where 

the former is allocated an interest component in the 

form of a technical interest income. On the one hand, this 

interest income results from financial investments which 

cover technical provisions. Deposits retained on ceded 

business are also used as a reference value for income from 

technical interest. Thus the portion of investment income 

corresponding to deposit interest expenditure is included 

as a component of technical interest and reallocated to the 

technical result. 

Depending on the type of insurance business and the associated 

legal requirements, technical interest income should 

be interpreted in different ways in terms of coverage of 

technical provisions: 

In German life insurance the income from technical 

interest comprises gains and losses from unit-linked life 

insurance plus the guaranteed interest return and the 

profit participation calculated on the basis of non-technical 

sources of income. For life insurance business outside 

Germany, income from technical interest corresponds to 

the risk-free interest return on technical provisions at the 

relevant national long-term interest rate, gains and losses 

from unit-linked life insurance and the profit participation, 

insofar as contracts exist to this effect. 

In the health segment, income from technical interest 

corresponds to the allocation of interest to the ageing 

reserve (technical interest rate) and the allocation to the 

provision for premium refunds. This is based on the allocation 

of interest to the provision for non-performancerelated 

premium refunds, the investment result exceeding 

the technical interest rate and on policyholders’ participation 

in the other non-technical result components. 

In property-casualty insurance we take into account the 

fact that provisions created in earlier years were covered 

by investments with higher interest rates than are available 

on the market today. Consequently, technical interest 

income corresponds to the risk-free interest on our 

discounted technical provisions at the respective historic 

interest rate taking account of the relevant term and currency. 

For balance sheet provisions in excess of the discounted 

provisions, short-term interest rates are applied.





[26] Net expenses for claims and benefits 

Net expenses for claims and benefits 2012 

€ million 

2011 

€ million 

Claims and benefits paid 13,542.9 14,999.8 

Change in provision for outstanding claims 475.8 336.0 

Change in provision for future policy benefits and other provisions 1,428.1 430.2 

Expenses for premium refunds and policyholders’ bonuses 1,919.0 1,418.6 

Other technical result (− = income) 190.3 184.6 

Gross expenses for claims and benefits 17,556.0 17,369.2 

Claims and benefits paid 1,131.6 675.7 

Change in provision for outstanding claims − 214.1 28.0 

Change in provision for future policy benefits and other provisions 39.9 100.4 

Expenses for premium refunds and policyholders’ bonuses 3.1 7.5 

Other technical result (− = expenses) − 149.0 − 145.5 

Reinsurers’ share of expenses for claims and benefits 811.5 666.1 

Claims and benefits paid 12,411.3 14,324.1 

Change in provision for outstanding claims 689.9 308.0 

Change in provision for future policy benefits and other provisions 1,388.1 329.8 

Expenses for premium refunds and policyholders’ bonuses 1,915.9 1,411.0 

Other technical result (− = income) 339.3 330.1 

Net expenses for claims and benefits 16,744.4 16,703.1 

[27] Net operating expenses 

Net operating expenses 2012 

€ million 

2011 

€ million 

Acquisition costs 2,597.6 2,819.1 

Administrative expenses 1,122.5 1,157.5 

Deferred acquisition costs 60.4 55.5 

Amortisation of PVFP 19.8 26.5 

Gross operating expenses 3,800.2 4,058.6 

Reinsurers’ share of acquisition costs 3.3 4.1 

Reinsurers’ share of deferred acquisition costs 24.9 − 7.7 

Commission received on ceded business 259.6 248.5 

Reinsurers’ share of operating expenses 287.8 244.9 

Net operating expenses 3,512.3 3,813.6





[28] Investment income and expenses (before deduction of technical interest) 

Investment income and expenses 


€ million 

Regular income 

2011 

€ million 


€ million 

Write-ups 

2011 

€ million 

Land and buildings, including buildings on third-party land 198.7 216.2 11.7 3.3 

Investments in affiliated companies 6.3 7.3 − − 

Investments in associates 77.0 36.2 3.0 − 

Loans 2,241.2 2,169.7 1.8 − 

Other securities 

Held to maturity 0.5 1.1 − − 

Available for sale 

Non-fixed-interest 153.6 186.6 − 6.3 

Fixed-interest 2,031.4 2,289.1 19.0 37.8 

At fair value through profit or loss 

Held for trading 

2,185.0 2,475.7 19.0 44.1 

Non-fixed-interest − 0.2 − − 

Fixed-interest 0.6 1.1 9.6 10.4 

Derivatives 68.5 86.3 453.9 856.0 

Designated as at fair value through profit or loss 

69.1 87.5 463.5 866.4 

Non-fixed-interest − − − − 

Fixed-interest 5.5 5.5 19.0 − 

5.5 5.5 19.0 − 

Total at fair value through profit or loss 74.6 93.0 482.5 866.4 

Total other securities 2,260.1 2,569.8 501.5 910.5 

Deposits retained on assumed reinsurance, and other investments 30.0 42.8 − − 

Subtotal 4,813.4 5,042.1 518.0 913.8 


policyholders who bear the investment risk − − − − 

Expenses for the management of investments, other expenses − − − − 

Total 4,813.4 5,042.1 518.0 913.8 

In the 2012 financial year we sold our shares in the fully 

consolidated subsidiary ERGO Daum Direct General 

Insurance Co. Ltd., Seoul. For further details on this 

transaction, please refer to the Notes on consolidated 

group on pages 55 et seq. 

The gains from the disposal of shares in associated companies 

essentially contain a retrospective purchase price 

adjustment of € 10.2 million from the sale of international 

health insurance companies to Munich Health Holding 

Aktien gesellschaft, Munich, in 2011. 

Expenditure on the administration of investments includes 

interest expenditure of € 5.8 million (45.8 m), administration 

expenses for financial investments of € 200.3 million 

(200.9 m) and expenses for repair and maintenance of 

property of € 33.4 million (26.3 m).





Income Expenses Other 

Investment 

Gains on disposal Write-downs Losses on disposal 

income/expenses 

result 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


€ million 

2011 

€ million 


€ million 

2011 

€ million 

61.6 54.2 88.7 103.3 − 0.2 − − 183.2 170.4 

14.7 497.7 32.2 19.0 0.7 54.2 − 7.3 − 4.1 − 19.3 427.7 

0.6 21.9 15.9 6.6 − 4.6 − − 64.7 46.9 

131.5 100.8 8.1 58.2 63.5 10.8 − − 2,302.9 2,201.5 

− − − − − − − − 0.5 1.1 

145.3 177.1 64.6 259.3 64.2 166.8 − − 170.0 − 56.0 

381.0 429.0 6.3 1,142.6 465.1 195.1 − − 1,960.0 1,418.2 

526.3 606.1 70.9 1,401.9 529.3 361.8 − − 2,130.1 1,362.2 

− 0.1 − − − − − − − 0.2 

− − 0.1 0.8 − − − − 10.1 10.6 

101.8 295.8 189.3 364.5 208.0 421.6 − − 226.9 452.0 

101.8 295.9 189.4 365.3 208.0 421.6 − − 237.0 462.8 

− − − − 0.1 2.6 − − − 0.1 − 2.6 

0.3 4.9 2.4 − 0.4 17.6 − − 21.9 − 7.2 

0.3 4.9 2.4 − 0.4 20.2 − − 21.9 − 9.8 

102.2 300.8 191.9 365.3 208.5 441.8 − − 258.9 453.1 

628.4 906.9 262.8 1,767.2 737.8 803.6 − − 2,389.5 1,816.4 

− − 1.4 0.1 − − − − 28.6 42.6 

836.9 1,581.5 409.3 1,954.4 802.0 873.4 − 7.3 − 4.1 4,949.6 4,705.5 

− − − − − − 602.8 − 262.9 602.8 − 262.9 

− − − − − − − 290.8 − 326.6 − 290.8 − 326.6 

836.9 1,581.5 409.3 1,954.4 802.0 873.4 304.7 − 593.6 5,261.7 4,116.0





[29] Other operating result 

Other operating result 2012 

€ million 

2011 

€ million 

Income from services rendered and from broking funds and insurance policies 172.9 201.4 

Income from owner-occupied property 43.8 24.6 

Interest from other than investments 27.0 50.7 

Income from releases from other non-technical provisions 56.2 59.2 


Other operating income 352.4 359.6 

Expenses for services rendered and for broking funds and insurance policies 138.6 140.1 

Expenses for owner-occupied property 14.0 33.0 

Interest charges and similar expenses 95.9 107.5 

Other write-downs 26.6 37.0 

Allocation to other non-technical provisions 15.8 11.8 


Other operating expenses 445.5 484.0 

Total − 93.1 − 124.4 

[30] Other non-operating result 

Other non-operating result 2012 

€ million 

2011 

€ million 

Foreign currency exchange gains 731.9 616.8 


Other non-operating income 831.0 720.6 

Foreign currency exchange losses 775.2 630.4 


Other non-operating expenses 1,334.3 1,035.8 

Total − 503.3 − 315.2 

Other non-operating expenses (‘Miscellaneous’) include 

amounts earmarked for restructuring measures in respect 

of our sales forces in Germany totalling € 258.1 million (−). 

[31] Impairment losses of goodwill 

In accordance with IFRS 3, there is no longer a scheduled 

amortisation of goodwill stated in the balance sheet. An 

impairment test was carried out at the balance sheet date. 

Impairment losses of goodwill from capital consolidation 

were not necessary in the 2012 financial year (2011: 

€ 21.4 m). 

[32] Finance costs 

Finance costs include all expenditure spent on interest 

and other expenses which are directly related to strategic 

debt, i. e. debt without an original and direct link to 

operative insurance business. Costs totalling € 81.8 million 

(65.8 m) stem primarily from liabilities of ERGO 

Versicherungsgruppe AG due to Munich Re companies. 

The loans serve to strengthen the liquidity basis and to 

finance strategic assets.





[33] Taxes on income 

[33a] 

Current tax and the change in deferred tax together make 

up the ‘Taxes on income’ item in the consolidated income 

statement. Apart from current tax expenditure there was 

income from deferred tax which resulted from changes in 

deferred tax items due to revaluations. 

Taxes on income 2012 

€ million 

2011 

€ million 

Current tax for financial year 179.9 331.4 

Current tax for other periods − 27.7 − 81.1 

Deferred tax resulting from the occurrence or reversal of temporary differences − 43.8 − 211.5 

Deferred tax resulting from the occurrence or utilisation of loss carry-forwards and write-downs − 24.9 2.7 

Valuation allowances for other deferred taxes − − 

Deferred tax for other periods − 7.0 13.0 

Total 76.6 54.5 

[33b] 

The Group tax rate corresponds to the average fiscal 

charges for all domestic Group companies. This amount 

is made up of German corporate tax amounting to 15% 

(15%) plus a 5.5% (5.5%) solidarity surcharge. 

Together with the domestic trade tax the uniform Group 

tax rate is thus 32% (32%). Based on a net operating result 

after finance costs, the following table shows the reconciliation 

between the expected taxes on income and the 

taxes on income actually shown: 

Reconciliation to effective tax expenses 2012 

€ million 

2011 

€ million 

Result before taxes on income (after other tax) 365.9 403.9 

x Group tax rate 32% (32%) 

= Expected taxes on income 117.1 129.3 

Tax effect of: 

+ Non-deductible expenses 56.5 36.3 

− Tax-free income − 59.7 − 58.3 

+ Tax rate differences − 2.1 − 13.6 

+ Tax for prior years − 34.7 − 68.1 

+ Amortisation of goodwill or PVFP − 12.3 

+ Miscellaneous − 0.6 16.6 

= Taxes on income shown 76.6 54.5



118 


Disclosures on risks from insurance 

contracts and financial instruments 

ERGO’s reporting is based on various legal regulations 

governing risks it is exposed to as a result of its business 

operations: 

IFRS 4 prescribes disclosures on the type and extent of risks 

from insurance contracts. Under IFRS 7, analogous disclosures 

on risks from financial instruments are required. 

Besides this, Section 315, para. 2, item 2 of the German 

Commercial Code prescribes disclosures in the management 

report on risk management objectives and methods, 

hedging and risks in connection with financial instruments. 

These requirements are specified in more detail in the 

German Accounting Standard No. 15 (DRS 15) for management 

reports, as well as DRS 5 and DRS 5–20 for risk reporting 

and risk reporting at insurance companies. 

Risk reporting concerns not only accounting but also the 

activities of ERGO’s integrated risk management (IRM). To 

take both perspectives into account, information on risks is 

provided in the Risk report within the management report, 

in the disclosures on risks from insurance contracts and 

financial instruments as well as in the disclosures on financial 

instruments in the Notes to the financial statements. 

The disclosures in the Risk report largely adopt a purely 

economic view. This report provides a detailed account 

of the organisation of risk management and of ERGO’s 

risk strategy, and briefly outlines the main risks we are 

exposed to. 

The Notes to the financial statements deal in detail with 

the various risks from insurance contracts and describe 

uncertainties in measuring them. In accordance with the 

requirements of IFRS 4, the effects of a change in the 

assumptions underlying the measurement of insurance 

contracts and in the market environment are also quantified. 

For risks from financial instruments, IFRS 7 stipulates 

that the disclosures must comprise information on maximum 

credit risk exposure, the remaining terms, the rating, 

and a sensitivity analysis regarding the market risk. This 

information is also relevant for assessing the risk. 

To obtain a complete overview of the risks to which ERGO 

is exposed, the reader needs to refer to both the risk report 

and the disclosures on risks from insurance contracts and 

financial instruments in the Notes to the financial statements, 

along with further information on individual items. 

Where necessary, we refer to the relevant information in 

the risk report or in the Notes. 

[34a] Risks from life and health insurance business 

Of primary importance for insurance contracts in life 

and health insurance are biometric risks, interest-rate 

risks and lapse risks. The measurement of technical 

provisions and deferred acquisition costs is based on 

biometric calculation tables, i. e. on assumptions with 

regard to mortality, disable ment and morbidity, and on 

the respective contract- or tariff-specific discount rates 

and actuarial interest rates. Besides this, measurement 

includes assumptions regarding the lapse rate and profit 

participation. In addition, other market risks from unitlinked 

policies and risks from embedded derivatives, as 

well as the liquidity risk, have to be taken into account.




Disclosures on risks from insurance contracts and financial instruments 

Biometric risks 

Our portfolios’ risk of exposure to biometric risks depends 

on the type of insurance contracts: 

Product category Features Significant risks 

Life insurance 

Term life insurance 

Annuity insurance 

Occupational disability and 

disablement insurance 

Health insurance 

Long-term contracts with death benefit 

In most cases with a lump-sum payment on 

termination 

Actuarial assumptions fixed when contract 

is concluded, premium adjustments not 

possible 

In most cases guaranteed lifelong 

annuity payment 

Actuarial assumptions mainly fixed 

when contract is concluded, premium 

adjustments not possible 

Long-term policies with a guaranteed 

limited annuity in the event of disablement 

Actuarial assumptions fixed when contract 

is concluded 

Largely long-term contracts guaranteeing 

assumption of costs for medical treatment; 

provisions are established for covering 

increased costs on ageing 

Variable actuarial assumptions; premium 

adjustment possible if there are sustained 

changes in the cost structure 

Mortality (short-term): increase in claims 

expenditure due to exceptional one-off 

circumstances (e. g. pandemics) 

Mortality (long-term): increase in claims 

expenditure due to sustained rise in 

mortality in the portfolio 

Longevity: increase in expected expenditure 

for annuities due to sustained rise in life 

expectancy in the portfolio 

Disablement: increased expenditure due to 

rise in the number of cases of disablement in 

the portfolio and a reduction in the average 

age at which the insured event occurs. 

Longevity: increased expenditure due to rise 

in the average duration of annuity period 

Morbidity: increase in medical costs that 

cannot be absorbed through premium 

adjustments 

Increase in claims expenditure due to 

exceptional, one-off events (e. g. pandemics) 

Lapse risk: Deviation of actual lapse behaviour 

compared with actuarial assumptions 

The biometric assumptions we use for measuring insurance 

contracts in our portfolio are regularly reviewed on 

the basis of updated portfolio information. This includes 

considering country-specific reviews by supervisory authorities 

or associations of actuaries. 

We also take account of market standards when checking 

the adequacy of biometric actuarial assumptions and the 

trend assumptions included in them. This may result in a 

change in the safety margin allowed for in the actuarial 

assumptions. The amount of the technical provisions or 

the deferred acquisition costs is not directly affected as 

long as safety margins have been included. In the view of 

the appointed actuaries, the biometric actuarial assumptions 

we use are deemed sufficient. However, in long-term 

health insurance, we are proceeding on the assumption 

that there will be further advances in medical treatment, 

potentially giving rise to higher costs. It is generally 

possible to modify the actuarial assumptions for this business 

by means of a premium adjustment to reflect the 

changes. 

For short-term health insurance, on the other hand, the 

main risk is a sudden increase in expenses due to exceptional 

one-off events. 

Interventions by legislators or courts in the distribution 

of risks and rewards underlying the contracts concluded 

between the parties to insurance may mask or aggravate 

the biometric risks described, making it necessary to adjust 

the provision. 

We measure sensitivity to changes to biometric assumptions 

in life insurance and for long-term contracts in 

health insurance using an embedded value analysis (see 

page 123).






A distinction must be made between risks of changes in 

interest rates on the one hand and interest-rate guarantee 

risks on the other. Risks of changes in interest rates would 

result from the discounting of the provision for future 

policy benefits and of parts of the provision for outstanding 

claims. In accordance with accounting valuation rules, the 

discount rate is fixed at contract commencement and will 

generally not be adjusted during the term of the contract. 

To this extent, the accounting valuation of these technical 

provisions does not depend directly on the level of market 

interest rates. 

Economically, however, an interest-rate risk derives in principle 

from the need to earn a return on investment covering 

the provision that is commensurate with the discount 

rate used in measuring the provision. 

In life insurance, an implied or explicit guaranteed interest 

rate is normally granted over the whole duration, based 

on a fixed interest rate applying at the time the contract is 

concluded. The discount rate used to calculate the provision 

for future policy benefits is identical with this interest rate 

for the majority of contracts in our portfolios. An appropriate 

minimum return needs to be earned in the long term 

from the investment result (possibly also with assistance 

from the technical result) for contractually guaranteed 

benefits. In health insurance, a discount rate is used for 

calculating the provision for future policy benefits, too; but 

for long-term business, this rate can generally be altered 

by way of premium adjustment. For short-term business, 

there is no direct interest-rate risk. 

The discount rates relevant for the portfolio which relate to 

provisions for future policy benefits and provisions for outstanding 

claims are shown in tables [16b] and [17a] of the 

Notes to the consolidated financial statements. 

Moreover, in German health insurance, the valid discount 

rate is also used to calculate the provision for premium 

surcharge provisions and for the provision for the reduced 

premiums in later years which, according to the German 

Commercial Code, form part of the provision for future 

policy benefits and which are to be shown under the provision 

for premium refunds under IFRS. In principle, however, 

the discount rate can be changed whenever there is an 

adjustment made to premiums within the allowed range of 

0–3.5%. 

Provisions that are not covered by retained deposits are 

covered by investments. In the case of a discrepancy 

between the durations of these investments and the 

liabilities (“duration mismatch”), the main risk lies in the 

fact that if interest rates fall markedly over the remaining 

settlement period of the liabilities, the return on the 

re invested assets may be lower than the discount rates 

and thus necessitate further expenses. But a complete 

duration matching of liabilities with fixed-interest investments 

of identical maturities would not be expedient, 

because if interest rates rise significantly, policyholders 

might make increasing use of their surrender rights, resulting 

in a liquidity requirement for premature payouts. 

We measure sensitivity to this interest-rate risk using an 

embedded value analysis (see pages 123 f.). 

Lapse risks 

In reinsurance, a lapse risk derives primarily from the indirect 

transfer of lapse risks from cedants. As a rule, both 

this risk and the financial risk from extraordinary termination 

of reinsurance contracts are largely ruled out through 

appropriate contract design. 

In life insurance, the reported technical provision in the 

case of contracts with a surrender option is generally at 

least as high as the relevant surrender value. Expected 

surrenders are taken into account in the amortisation of 

deferred acquisition costs in life insurance. The policyholder’s 

right in some contracts to maintain the contract 

with a waiver of premium and an adjustment of the 

guaranteed benefits constitutes a partial lapse and is 

taken into account in the calculations analogously. The 

lump-sum option right for a deferred annuity gives the 

policyholder the option to have the annuity paid out in a 

lump sum on a given date. There is a potential risk here if, 

following a level of interest which is significantly above the





level used to calculate the annuity, an unexpectedly large 

number of policyholders exercise their lump-sum option. 

However, there is no direct interest or market sensitivity 

as the exercising of the option is influenced decisively 

by individual factors concerning the policyholder because 

there is an insurance component involved. Contractual 

aspects are also relevant, as the lump-sum option is sometimes 

excluded or severely limited, such as with company 

pensions or with state-subsidised products. The adequacy 

test for underwritten liabilities in accordance with IFRS 4 

explicitly takes this policyholders’ option into consideration. 

Based on the relevant legal parameters, reserves 

for health insurance business are calculated considering 

amounts payable due to transfer of policies. The underlying 

assumptions are regularly checked. 

The sensitivity towards a change in the lapse probability 

in life insurance as well as for long-term health insurance 

contracts are measured as part of an embedded value 

analysis (see page 123). 

Other market risks and embedded derivatives 

Risks to be considered are – besides the interest-rate 

guarantee, which we analyse in the modelling of the 

interest-rate risk – are particularly risks from unit-linked life 

insurance. Other embedded derivatives are economically 

insignificant. 

For unit-linked insurance contracts in our portfolios, investments 

are held for the benefit of life insurance policyholders 

who bear the investment risk, meaning that there is no 

direct market risk. Appropriate product design ensures that 

the necessary premium portions for payment of a guaranteed 

minimum benefit on occurrence of death are based 

on the current fund assets. In addition, unit-linked insurance 

policies may contain a guaranteed gross premium 

which is assured by an issuer in certain cases. As a result, 

our market risk is reduced accordingly, although there is 

a bad debt risk. In order to reduce this risk, we make high 

demands of the creditworthiness of the issuer. 


For ERGO, there could be a liquidity risk if the cash outflow 

for insurance claims payments and the costs related to the 

business were to exceed the cash inflow from premiums 

and investments. For our mainly long-term business, we 

therefore analyse the expected future balance from cash 

inflows due to premium payments and outflows for payment 

of insurance claims and benefits plus costs. 

As regards business in force on the balance sheet date, this 

results in the future expected technical payment balances 

shown in the table on the next page according to duration 

bands. As only the technical payment flows are considered, 

inflows from investment income and investments 

that become free are not included in the quantification. 

Taking into account the inflows from investments, whose 

cash flows are largely aligned with those of the liabilities 

through our asset-liability management, items in the 

future expectations are positive throughout, so that the 

liquidity risk of these insurance contracts is minimised 

accordingly. 

With these numerical estimates, it should be borne in mind 

that these forward-looking data may involve considerable 

uncertainty. 

Further information on the liquidity risk is provided in the 

risk report on page 37. 

Claims risk 

The claims risk occurs when benefits have to be paid out 

of a previously determined premium. Here the scope of 

benefits has been agreed beforehand, but the risk lies 

in not knowing how medical expenses and benefits will 

develop in the future. The promise of benefits plays an 

important role in this aspect. In future, we also expect that 

medical possibilities will improve still further with more 

applications and, hence, higher costs. Consequently, the 

relationship of calculated costs to the benefits required is 

constantly monitored. Premiums will be adjusted for those 

tariffs where the required benefits deviate from calculated





Life insurance – Expected future technical cash flow (gross) 1 2012 2011 

€ million 2 € million 2 

Up to one year − 3,298 − 2,713 

Over one year and up to five years − 15,600 − 14,564 

Over five years and up to ten years − 18,258 − 17,790 

Over ten years and up to twenty years − 29,385 − 27,821 

Over twenty years − 37,614 − 35,985 

1 Premiums less guaranteed benefits and costs (excl. unit-linked products). 

2 After eliminating internal Group transactions across all segments. 

Health insurance – Expected future technical cash flow (gross) 2012 2011 

€ million 1 € million 1 

Up to one year 702 874 

Over one year and up to five years 950 2,000 

Over five years and up to ten years − 1,477 − 112 

Over ten years and up to twenty years − 11,458 − 11,008 

Over twenty years − 51,865 − 77,702 


2 The decline of the estimate from 2011 to 2012 results from an adjustment of the underlying assumptions. 

benefits on a permanent basis. Actuarial assumptions used 

are deemed to be adequate by the appointed actuaries 

and the fiduciaries in cases inspected by the latter. These 

measures severely limit the risk resulting from expenses for 

claims and benefits. The risk of particularly high individual 

claims and a dramatic rise in the number of claims as a 

result of a pandemic are constrained by means of a special 

reinsurance concept. 

Risk minimisation measures 

The product design itself also ensures a substantial reduction 

in risk. For the most part, prudent actuarial assumptions 

are used in fixing the guaranteed benefits, in addition 

to which policyholders are granted a performance-related 

profit participation. Given the relevant margins in the 

actuarial assumptions, it is also possible to fulfil future 

guaranteed obligations without adjusting the provisions 

in the case of moderate changes in assumptions. Of great 

significance for risk-balancing in the case of adverse developments 

are parts of the provision for premium refunds 

based on national regulations, parts of the provision for 

deferred premium refunds resulting from other revaluations, 

and unrealised gains and losses on investments 

taken as a basis for posting the provision for deferred 

premium refunds. 

In health insurance, there is the additional possibility of 

adjusting premiums for most long-term contracts. If it is 

foreseeable that the assumptions behind the calculation 

are permanently inadequate to cover expenses for claims 

or the actual mortalities deviate significantly from the 

calculated ones, premiums can be raised accordingly, thus 

closely limiting the financial and balance sheet effects of 

cost increases in healthcare and permanent changes in 

morbidity. 

For information on our risk management processes, see 

also pages 31 f. in the risk report. 

Impact on equity and the consolidated income 

statement 

In the liability adequacy test pursuant to IFRS 4, technical 

provisions and deferred acquisition costs are regularly 

tested to ensure they are appropriate. An adjustment is 

made if such tests show that, as a whole, the amounts 

calculated using the previous assumptions for biometric 

actuarial rates, for discounting provisions and for lapses 

are no longer sufficient. The possibilities of adjusting the 

surplus are taken into account. In health insurance, the 

technical interest rate can be adjusted if it is necessary to 

alter the assumed technical interest rate within the framework 

of a premium adjustment.





If an adjustment is required, we record any deficit as an 

expense in the consolidated income statement. 

Quantitative impact of changes in assumptions on longterm 

insurance business 

The ERGO Insurance Group measures the sensitivity of its 

long-term insurance business in life and health insurance 

using an economic valuation on the basis of the CFO’s 

Forum’s Market-Consistent Embedded Value Principles 

and Guidance (see page 12). This covers more than 97% 

(94%) of long-term insurance business. Compared to 

incorporating the entire insurance portfolio, the difference 

is negligible. 

The sensitivities given below measure the impact of 

changes in the calculation bases and capital market 

parameters on the calculated economic value of our 

business. They take account of our risk minimisation 

measures and tax effects. 

ERGO continues to adhere to the strict rules of marketconsistent 

evaluation as at the end of the year. 

Embedded value sensitivities 1 2012 

€ million 

2011 

€ million 

Embedded value on the balance sheet date 2,728 875 

Change in the event of a sustained increase in interest rates by 100 BP 2,298 2,369 

Change in the event of a sustained decrease in interest rates by 100 BP − 3,769 − 4,009 

Change in the event of a 10% decrease in the value of equities and real estate − 176 − 210 

Changes in the event of an increase in mortality by 5% in the case of contracts mainly covering the mortality risk − 42 − 48 

Changes in the event of an decrease in mortality by 5% in the case of contracts mainly covering the longevity risk − 180 − 186 

Change in the event of an increase in morbidity by 5% − 73 − 85 

Change in the event of an increase in the lapse rate by 10% 140 112 

1 Premiums less guaranteed benefits and costs (excl. unit-linked products). 

[34b] Risks arising from property-casualty insurance 

business 

Of particular importance for these insurance contracts 

is the estimation risk with regard to the amount of the 

expected claims expenditure for future claims from current 

insurance contracts (premium risk) as well as for 

claims already incurred (reserve risk). In estimating claims 

expenditure, we also take cost increases into account. 

There is an interest-rate risk for parts of the portfolio. 

Besides this, the liquidity risk has to be taken into account. 

The basis for measuring the risk assumed is an estimate of 

the claims frequency to be expected for a contract or portfolio 

of contracts. In addition, an estimation of the claims 

amount is necessary, from which a mathematical distribution 

of the expected losses is derived. The result of these 

two steps is an estimation of the expected overall claims 

in a portfolio. A third element comprises the expected cash 

flows to settle claims incurred, a process which frequently 

extends over several years. 

Premium risks 

The degree of exposure to estimation risks differs according 

to class of business. On the basis of the loss ratios and 

combined ratios of past years, conclusions can be drawn 

about the historical volatilities in the different classes of 

business and about possible interdependencies. The differences 

in volatility are equally due to fluctuations in the 

amount of claims and fluctuations in the respective market 

price level for the cover granted.





Premiums, claims and expenses according to lines of business 2012 2011 2010 2009 

Gross premiums € million 

Motor 1,669 1,730 1,724 1,534 

Thereof motor liability 936 942 910 808 

Thereof other motor 733 788 814 726 

Accident 838 875 902 888 

Fire and property 776 827 773 736 

Liability 584 560 532 516 

Transport and aviation 187 167 154 127 

Other 801 754 735 693 

Legal expenses 1,045 1,009 968 942 

Total 5,899 5,922 5,787 5,436 

Claims ratio % (net) 

Motor 79.6 87.2 88.2 83.2 

Thereof motor liability 85.1 89.6 90.6 84.7 

Thereof other motor 72.1 84.2 85.2 81.3 

Accident 41.0 39.9 35.3 33.1 

Fire and property 66.4 63.3 68.6 55.4 

Liability 62.5 56.8 46.1 55.0 

Transport and aviation 58.1 40.1 64.8 67.1 

Other 51.9 51.8 52.3 53.0 

Legal expenses 55.5 55.0 55.2 57.7 

Total 62.2 62.9 62.5 59.8 

Combined Ratio % (net) 

Motor 105.1 113.2 113.9 108.0 

Thereof motor liability 110.3 115.5 115.5 109.6 

Thereof other motor 98.1 110.3 112.1 106.0 

Accident 78.5 77.0 72.2 68.5 

Fire and property 103.8 100.3 104.7 90.7 

Liability 95.5 90.8 78.9 86.5 

Transport and aviation 99.1 87.8 94.4 93.1 

Other 95.4 95.9 96.0 97.0 

Legal expenses 97.2 97.5 96.8 97.8 

Total 97.2 98.3 97.0 93.5 

The estimation of technological, social and demographic 

parameters plays an important part in assessing and pricing 

risks assumed in all classes of business. 

Beyond this, in liability insurance and sections of motor 

insurance, the development of economic and legal 

parameters is significant. In the lines of business where 

there is a high degree of sensitivity regarding the underlying 

assumptions about natural catastrophes, we include 

expected trends in our considerations when assessing the 

risks. 

We are convinced that we have calculated our premiums 

to include a sufficient margin for risk. The containment 

of risk is guaranteed through our targeted underwriting 

policy, strict underwriting guidelines and guidelines for the 

degree of authority and competency. The systematic controlling 

of the portfolios and regular recalculation of premiums 

ensure that premium income and claims payments 

remain in an appropriate balance.





Reserve risks 


The provision for outstanding claims is subject to the risk 

that actual claims settlements may be less than or exceed 

the amount reserved (reserve risk). Particular attention 

is given to those situations where the funds dedicated to 

future claims payments may be inadequate. 

The measurement of the provision for outstanding claims 

is based on an analysis of the historical loss development 

data for the different classes of business. We use a range 

of well-established actuarial methods to analyse and value 

this data which embed various pricing, coverage, benefit 

and inflation levels. In doing so, we draw on the specialist 

knowledge present in our claims and underwriting 

departments and take all foreseeable future trends into 

account. As part of our regular results monitoring process, 

we keep a close eye on trends to ensure that the assumptions 

underlying the measurement of the provisions always 

reflect the latest developments. Consequently, in the 

course of reserve run-off, it may be necessary to revise the 

original estimates of the claims expenditure required and 

to adjust the provisions accordingly. 

Actuarial claims requirements can deviate from the 

expected claims requirements for future insurance risks 

from insurance business that has already been underwritten. 

A check is made during an IFRS 4 adequacy test 

to find out whether the expected loss requirement, including 

costs, is more than expected earned premiums plus 

the proportionate amount of investment income. If this 

is the case, additional reserves will be set up. Appropriate 

reserves are set up based on experience from past years. 

There have not been any major fluctuations in the past in 

either the claims ratio or run-off results. 

The development of our claims reserves and the corresponding 

run-off results are shown under [17] Provision for 

outstanding claims. 

Economically, an interest-rate risk derives in principle from 

the need to earn a return on the investment covering the 

provision that is commensurate with the discount rate 

used in measuring the provision. In balance sheet terms, 

the interest-rate risk affects only those parts of the technical 

provisions that are discounted. In our case, this risk lies 

predominantly with the provisions for personal accident 

insurance with premium refunds and annuities. 

However, as only around 10.2% of the actuarial and claims 

reserves to be considered in this respect are discounted, 

this risk can be deemed small. If investment income failed 

to cover the expenses arising from discounting, this would 

result in losses not included in the calculations. In such 

cases, a reserve adjustment may be necessary. Conversely, 

if the investment income were higher, this would result in 

unforeseen gains. 


Such risks could result for ERGO if the cash outflow for 

insurance claims payments and the costs related to the 

business were to exceed the cash inflow from premiums 

and investments. In property-casualty insurance, a distinction 

must be made between payments for claims for which 

reserves were posted in previous years and immediate 

payments, i. e. payments for claims incurred in the current 

financial year. If claims reserves are posted, the liquidity 

risk can be minimised through our asset-liability management, 

in which investments are geared to the character 

of the liabilities. The proportion of immediate claims payments 

constitutes only a fraction of the total payments 

to be made and is, in our experience, stable over time. 

Consequently, the liquidity risks in respect of these payments 

can also be minimised by means of asset-liability 

management. 

The following table shows that in the past calendar years 

the liquidity situation has always been positive.





Cash flows and liquid funds (gross) 


in individual calendar years 1 € million 

2011 

€ million 

2010 

€ million 

2009 

€ million 

2008 

€ million 

Premiums received 5,899 5,922 5,787 5,436 5,041 

Claims payments for financial year 1,776 1,828 1,871 1,686 1,430 

Claims payments for previous years 1,638 1,605 1,423 1,319 1,267 

Costs 2,037 2,039 1,965 1,799 1,601 

Liquid funds 448 450 529 632 743 


For more information on the liquidity risk, see page 37 of 

the risk report. 

Impact of changes in technical assumptions on equity 

and the consolidated income statement 

As part of the monitoring of our portfolio, we check 

whether original assumptions need to be adjusted. By 

means of the IFRS 4 liability adequacy test, we review 

expected claims expenditure in the light of updated 

assumptions, taking into account our risk minimisation 

measures. If this test shows that an adjustment to 

technical provisions is required, the amount is recognised 

in the consolidated income statement. 

Risk minimisation measures 

With an underwriting policy geared to systematic 

diversification, i. e. the greatest possible mix and spread 

of individual risks, we substantially reduce the volatility 

for our insurance portfolio as a whole. 

As a result of the strong focus on business with private 

customers, there are, on the one hand, very few risks concerning 

future cash flows and, on the other, low exposure 

to large and very large losses. High single losses and large 

indemnity amounts associated with them, as well as the 

effect of cumulative events, are effectively contained 

regarding their effect on the income statement by our 

reinsurance programmes, meaning that their negative 

impact can be planned in the sense of profit-oriented company 

management. We make use of risk-based reinsurance 

solutions to achieve this goal. As regards ceded insurance, 

we pursue the objective of reducing the volatility of net 

results. This means that less equity is required for operational 

purposes and, at the same time, the results can be 

planned more accurately. To calculate our reinsurance 

needs, we regularly analyse the gross and net exposure of 

our insurance portfolios with a special focus on cumulative 

risks. From this analysis, we derive areas of action for steering 

our reinsurance programme. 

Due to the special significance of insurance against 

natural disasters and our companies’ exposure to those 

hazards, our portfolios are evaluated on a regular basis 

using recognised actuarial methods. The results of these 

analyses form the basis for the type and degree of protection 

programmes against natural disasters. The respective net 

retentions are financially viable sums for the companies. 

The portfolios of private customer lines of business are very 

homogeneous. Nevertheless, in the context of internal risk 

modelling, major, cumulative and basic losses are modelled 

and the effect of the current reinsurance structure tested 

on them. The normal (Pareto and generalised Pareto) 

dis tribution is then used as an assumption for claims 

amounts for major and cumulative losses. This internal risk 

model is used in addition to gauging reinsurance requirements 

and is part of the internal risk management process. 

As a result of the very different amounts regarding the 

insured values, commercial and industrial lines of business 

are characterised by heterogeneity of the portfolios. 

In the course of internal risk modelling, major, cumulative 

and basic losses are therefore assessed on a highly individual 

basis, and, accordingly, the impact of the respective 

current and highly individual reinsurance structure is 

permanently tested on them and adjusted where required. 

Where necessary, high individual risks are diversified using 

co-insurance or by taking out facultative reinsurance 

solutions. 

In addition, we create provisions for fluctuations in the 

pattern of results where required by national insurance 

supervisory authorities’ regulations and accounting principles. 

However, this is not shown in our IFRS consolidated 

financial statements.





[34c] Credit risks from ceded reinsurance business 

The credit risk is also of relevance in connection with ceded 

business. 

For provisions ceded to reinsurers, the creditworthiness of 

our reinsurers is outlined in the table below. 

Here, 96% is directly collateralised through deposits. A 

credit risk can be ignored for this portion. Information on 

risks arising from defaults on receivables from insurance 

business can be found in the risk report on page 34. 

Technical provisions ceded to reinsurers according to rating 2012 

% 

2011 

% 

AAA 4 3 

AA 80 62 

A 15 13 

BBB and less − − 

No rating available 2 22 

[34d] Market risk from financing instruments – sensitivity analysis 

The sensitivity analysis shows the effect of capital market 

events on the value of investments and the corresponding 

impact on the consolidated income statement. Sensitivities 

of investments to share prices, interest rates and exchange 

rates are analysed independently of one another, i. e. 

ceteris paribus, with the change in market value being 

determined under selected capital market scenarios, as 

follows: 

The analysis of equities and equity derivatives is based on 

a market value of ± 10%, ± 30% of the delta-weighted exposure. 

Investment interests and alternative types of investments 

(private equity, hedge funds and commodities) 

are analysed together with shares. For interest-sensitive 

instruments, on the other hand, the change in market 

value resulting from a global change in interest rates of 

+ 100 BP, ± 50 BP and − 25 BP is determined using duration 

and convexity. The reaction of interest-rate derivatives to 

the change in market value of the underlying investments 

is taken into account using the delta of the derivative. 

Changes in exchange rates affect both interest-sensitive 

and equity-sensitive instruments as well as shareholdings. 

The sensitivity of instruments in foreign currencies is 

established by multiplying the euro market value by the 

hypothetical currency fluctuation of ± 10%. 

does not take into account the effects resulting from 

policy holders’ participation in surplus in dividends in 

insurance of the people. The impact on the results and 

equity shown below would be substantially reduced if 

these effects were considered. It is also assumed that 

changes in the capital markets occur instantaneously, 

preventing our limit systems and active countermeasures 

from taking effect. The analysis considers around 99% of 

ERGO’s investments. 

Market risk – share prices 

A rise in share prices does not generally have any effect 

on the income statement, but on the equity. Write-downs 

on hedging instruments following a rise in the share price 

are recorded in the income statement. By contrast, a 

drop in share prices leads to the changes of value being 

reflected in the income statement. Write-downs on shares 

are undertaken which are partly offset by the write-ups 

on hedging instruments also recorded in the income 

statement. 

The non-linear effects of equity options or other asymmetrical 

strategies are not taken into account in this presentation 

owing to the delta-weighted approach selected. 

The effects of events on the capital markets listed below 

do not take account of tax or the provision for premium 

refunds (gross amounts stated). This means the analysis





Change in market value of 

Impact on Impact on Impact on Impact on 

investments sensitive to share prices 

profit or loss 1 equity 1 

profit or loss 1 

equity 1 

Change in share price 


€ million 


€ million 

2011 

€ million 

2011 

€ million 

Increase of 30% − 129 590 − 123 352 

Increase of 10% − 53 197 − 41 117 

Decrease of 10% − 54 − 88 − 42 − 35 

Decrease of 30% − 255 − 169 − 158 − 69 

Market values on 31 December 2,674 1,876 

1 Gross before tax and policyholder participation in surplus. 

Market risk – interest rates 

The change in the market price of investments sensitive 

to interest rates is calculated using a parallel shift of the 

interest-rate curve and a revaluation of the fixed-interest 

securities and interest-rate derivatives on the basis of their 

duration and convexity. Cash positions and other derivatives 

are not included in the calculation. Major strategic 

interest-rate derivatives are receiver swaps and swaptions. 

Bonds futures are used for tactical controlling. 

In terms of their market value, the fixed-interest investments 

of the ERGO Insurance Group react to interest-rate 

fluctuations in a way similar to a level-coupon bond with 

a residual term of about eight years. As part of the investments 

are valued at amortised cost, the effects shown 

nevertheless deviate from this. 

The impact on the consolidated income statement is 

small compared with the impact on equity, as most of 

the changes in the value of fixed-interest investments are 

accounted for in equity, with no effect on profit or loss. 

Also, around 50% of the investments considered in this 

analysis are measured at amortised cost, so that changes 

in market value have no effect on the financial statements. 

Economically speaking, the impact of the fixed-interest 

investments on equity is paralleled by a change in the economic 

value of the liabilities. Therefore our asset-liability 

management steers the investments in such a way that 

the effects of interest-rate changes on the value of the 

investments and on the economic value of the liabilities 

largely cancel each other out. This offsetting does not have 

an impact on the balance sheet, however, since significant 

portions of the liabilities are not valued on the basis of the 

current interest-rate curves. 

Change in market value of investments 


sensitive to interest rates 

profit or loss 1 equity 1 profit or loss 1 equity 1 

Change in interest rate 


€ million 


€ million 

2011 

€ million 

2011 

€ million 

Increase of 100 BP − 338 − 3,158 − 352 − 2,710 

Increase of 50 BP − 188 − 1,633 − 201 − 1,397 

Decrease of 25 BP 108 856 119 730 

Decrease of 50 BP 224 1,739 251 1,480 


1 Gross before tax and policyholder participation in surplus.





Market risk – exchange rates 

A little less than half of foreign currency exposures taken 

into account come from British pounds and roughly a third 

from investments quoted in US dollars. The low sensitivity 

towards changes in the exchange rate is due to extensive 

currency hedging. In this analysis, a 10% rise in the currency 

rate is to be understood as a 10% appreciation in the foreign 

currency compared to the euro. 

Change in market value of investments 


sensitive to exchange rates 

profit or loss 1 equity 1 profit or loss 1 equity 1 

Change in exchange rates 


€ million 


€ million 

2011 

€ million 

2011 

€ million 

Increase of 10 % 173 19 154 18 

Decrease of 10 % − 173 − 19 − 154 − 18 


1 Gross before tax and policyholder participation in surplus.



130 


Other information 

[35] Personnel expenses 

Personnel expenses 2012 

€ million 

2011 

€ million 

Wages and salaries 1,419.1 1,506.4 

Social security contributions and employee assistance 299.6 299.8 

Expenses for employees’ pensions 100.9 99.0 

Total 1,819.5 1,905.2 

[36] Long-term incentive plan 

In each of the years 2002 to 2009, ERGO Versicherungsgruppe 

AG and some subsidiaries initiated long-term 

incentive schemes for members of the Board and for 

selected managing directors. This remuneration component 

with a long-term motivational effect is aimed at a 

sustainable rise in the share price of Munich Re. Those 

entitled received a defined number of share appreciation 

rights which can only be exercised if a waiting period of 

two years has expired, the Munich Re share price has risen 

by at least 20% since the scheme began, and the Euro 

Stoxx 50 index has been surpassed at least twice for three 

months each time in the seven years of the scheme. The 

gross amount that can be obtained from exercising the 

share appreciation rights is limited to a rise of no more 

than 150% of the initial share price. Appreciation rights 

could so far only be exercised under the schemes initiated 

in 2003 to 2006 and in 2009. The tables below show the 

long-term incentive schemes which had not expired at the 

beginning of the reporting period.





Incentive plan 2009 2008 2007 2006 2005 

Plan commencement 1 July 2009 1 July 2008 1 July 2007 1 July 2006 1 July 2005 

Plan end 30 June 2016 30 June 2015 30 June 2014 30 June 2013 30 June 2012 

Initial share price 97.57 € 121.84 € 134.07 € 108.87 € 88.10 € 

Intrinsic value 2012 for one right 36.83 € 12.56 € 0.33 € 25.53 € 46.30 € 

Fair value 2012 for one right 36.83 € 12.99 € 7.06 € 25.53 € − 

Number of rights on 31 December 2004 − − − − − 

Exercisable at year-end − − − − − 

Additions − − − − 158,648 

Exercised − − − − − 

Forfeited − − − − − 

Number of rights on 31 December 2005 − − − − 158,648 


Additions − − − 130,667 − 

Exercised − − − − − 

Forfeited − − − − 3,072 

Number of rights on 31 December 2006 − − − 130,667 155,576 


Additions − − 94,115 − − 

Exercised − − − − 30,486 

Forfeited − − 10,422 6,849 − 

Number of rights on 31 December 2007 − − 83,693 123,818 125,090 

Exercisable at year-end − − − − 125,090 

Additions − 132,306 − − − 

Exercised − − − − 16,983 


Number of rights on 31 December 2008 − 132,306 83,693 123,818 108,107 

Exercisable at year-end − − − 123,818 108,107 

Additions 118,979 5,707 3,605 5,868 − 

Exercised − − − − 13,304 


Number of rights on 31 December 2009 118,979 138,013 87,298 129,686 94,803 

Exercisable at year-end − − 87,298 129,686 94,803 

Additions − − − − − 

Exercised − − − − 43,953 



Exercisable at year-end − 138,013 87,298 129,686 50,850 


Exercised − − − − 26,957 



Exercisable at year-end 118,979 138,013 87,298 129,686 23,893 


Exercised 109,813 − − 121,603 23,893 


Number of rights on 31 December 2012 9,166 138,013 87,298 8,083 − 

Exercisable at year-end 9,166 138,013 87,298 8,083 −





[37] Cash flow statementent 

For a comment on the cash flow statement, reference 

is made to the management report, pages 25 f. 

[38] Total remuneration of the Supervisory Board and the Board of Management 

Expenditure for the Supervisory Board totalled € 0.7 million 

(0.8 m). 

Total remuneration for the Board of Management’s members 

for their activities on behalf of the holding company 

and Group companies amounted to € 8.3 million (8.2 m). 

Former members of the Board of Management and their 

surviving dependants received € 4.4 million (5.1 m) in total; 

a provision of € 48.1 million (41.2 m) has been set aside 

for current and future pension payments to this group of 

people. 

An overview of the members of the Company’s Supervisory 

Board and Board of Management are on pages 14 and 

15. This is part of the Notes to the consolidated financial 

statements. 

[39] Group affiliation 

As at 31 December 2012, Münchener Rückversicherungs- 

Gesellschaft AG, Munich, controls directly and via its 

subsidiary P.A.N. GmbH & Co. KG, Grünwald, 100% of the 

issued share capital of ERGO Versicherungsgruppe AG, 

Düsseldorf. ERGO Versicherungsgruppe AG, Düsseldorf, 

has prepared these consolidated financial statements 

as at 31 December 2012 according to International 

Financial Reporting Standards and is also included in 

the consolidated financial statements of Münchener 

Rückversicherungs-Gesellschaft AG, Munich. The consolidated 

financial statements are accessible on the website 

of the company register. They are also available from the 

companies upon request. 

[40] Auditor’s fees 

Auditor’s fees were paid for services rendered by the 

Group auditors KPMG Bayerische Treuhandgesellschaft AG 

Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, 

Munich, and affiliated companies in the meaning 

of Section 271 para. 2 of the German Commercial Code, 

to the parent company and consolidated subsidiaries in 

accordance with the following table: 

The affiliated companies of KPMG Bayerische Treuhandgesellschaft 

AG are the following: KPMG Germany, 

KPMG Spain, KPMG Switzerland, KPMG LLP (UK), 

KPMG Belgium, KPMG Netherlands, KPMG Luxembourg, 

KPMG Turkey, KPMG Russia, KPMG Georgia, KPMG Ukraine, 

KPMG Armenia, KPMG Kazakhstan, KPMG Kyrgyzstan, 

KPMG Norway, KPMG Kuwait, KPMG Jordan and 

KPMG Saudi-Arabia. 

Auditor’s fees 2012 

€ million 

2011 

€ million 

Audits of financial statements 4.3 1 4.3 

Other assurance and appraisal services 1.2 1 1.4 

Tax consultancy services 0.1 0.2 

Other services 1.2 0.6 

Total 6.8 6.6 

1 Thereof fees totalling € 4.6 million for KPMG Bayerische Treuhandgesellschaft AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft.





[41] Related parties 

ERGO Insurance Group maintains various reinsurance 

relationships with the Münchener Rückversicherungs- 

Gesellschaft AG, Munich, as well as with some of its 

reinsurance subsidiaries. 

In the year under review, premiums totalling € 597.2 million 

(639.5 m), i.e. 59.0% (62.8%) of total reinsurance premiums, 

were reinsured with them. In the reporting year 

a total of € 422.4 million (358.1 m) in claims expenditure 

came from these reinsurers. 

These companies’ share in deposits retained on ceded 

business is € 2,221.6 million (2,325.3 m). The share in receivables 

on reinsurance business accounts for € 52.0 million 

(55.9 m), and € 18.2 million (2.1 m) in accounts payable. 

Reinsurance relationships with Münchener Rückversicherungs-Gesellschaft 

AG, Munich, were reorganised 

in the reporting year. The agreed transfer price was 

€ 472.5 million. 

Besides the subordinated liabilities due to the Munich Re 

Group at the balance sheet date, there are further loan 

liabilities due to subsidiary companies of Münchener 

Rückversicherungs-Gesellschaft AG in Munich. ERGO Versicherungsgruppe 

AG has been lent € 30.0 million(180.0 m) 

by Itus Verwaltungs AG, Grünwald, and € 65.0 million 

(65.0 m) by Proserpina Vermögensverwaltungsgesellschaft 

mbH, Munich. 

In the context of an outsourcing contract, ERGO Insurance 

Group has transferred its portfolio management and 

administration of financial investments to MEAG MUNICH 

ERGO AssetManagement GmbH. The outsourcing agreement 

covers the administration of land and buildings, 

of all domestic and foreign marketable securities and of 

loans. In addition, MEAG MUNICH ERGO AssetManagement 

GmbH is assuming remits in property construction auditing. 

MEAG MUNICH ERGO AssetManagement GmbH is an 

associated company of ERGO Insurance Group. Remuneration 

of € 11.1 million (8.2 m) for services rendered and for 

insurance brokerage is attributable to MEAG companies. 

Expenses for services rendered and for insurance brokerage 

amounted to € 14.1 million (12.7 m). 

A retrospective purchase price adjustment from the sale of 

international health insurance companies to Munich Health 

Holding Aktiengesellschaft, Munich, in 2011 led to gains on 

the disposal of shares in affiliated companies amounting 

to € 10.2 million. 

No major reportable transactions between corporate 

bodies and the ERGO Insurance Group took place. 

[42] Contingent liabilities and other financial commitments 

The details below regarding contingent liabilities and other 

financial commitments refer to items in terms of IAS 37 

and Sections 251 and 285 no. 3 of the German Commercial 

Code (HGB) which go beyond the disclosure requirements 

under IAS 37. Under these provisions, financial commitments 

only need to be revealed where the likelihood of an 

outflow of funds is not minimal. It is not expected that the 

following disclosed contingent liabilities and secondary 

liabilities will be utilised. 

ERGO Versicherungsgruppe AG issued a letter of comfort 

amounting to € 4.3 million (4.3 m) for a non-affiliated 

company. 

In addition, guarantees of € 18.5 million (20.0 m) and 

DKK260.3 million (245.8 m) were given for non-affiliated 

companies. Guarantees to other companies amounted 

to € 10.3 million (10.3 m) and DKK16.0 million (20.0 m). 

Contingent repayment obligations to other companies 

stood at € 1.1 million (16.0 m).





Assurances and guarantees resulting from the disposal of 

Capital Square Pte. Ltd. expired on schedule in July 2012. 

ERGO Versicherung AG is member of several insurance 

pools, which means that if any other pool member became 

insolvent, it would be called upon to meet the policy claims 

against that member on a pro rata basis in accordance 

with its stake in the pool. 

As a result of their stakes in the Protektor Lebens versicherungs-AG, 

Berlin, ERGO Lebensversicherung AG, 

Hamburg, Victoria Lebensversicherung AG, Düsseldorf, 

ERGO Direkt Lebensversicherung AG, Fürth, Vorsorge 

Lebens versicherung AG, Düsseldorf, and Neckermann 

Lebens ver sicherung AG, Fürth, are required – in the event 

of a German life insurer becoming insolvent – to meet 

the latter’s policy claims on a pro rata basis according 

to the stake held. As in the previous year, ERGO 

Insurance Group thus has a 10.76% stake in Protektor 

Lebensversicherungs-AG. 

Under Sections 124 et seq. of the German Insurance 

Supervision Act (VAG), German life and health insurers 

are obliged to become members of a protection fund. The 

protection fund is entitled to claim – in addition to the 

regular fees – extraordinary fees of 1‰ in the case of life 

insurers or 2‰ in the case of health insurers of net technical 

provisions. In addition, the Company has pledged to 

provide funding to the protection fund or, alternatively, to 

Protektor Lebensversicherungs-AG in case the protection 

fund’s financial resources should be insufficient. This obligation 

amounts to 1% of net technical provisions, taking 

into account the amounts already paid to the protection 

fund. This means that the ERGO Insurance Group may be 

required to pay € 525.5 million (531.2 m). 

[43] Investment and other financial liabilities 

Commitments of Group companies to non-affiliated companies 

stemming from work and service contracts came to 

€ 122.7 million (144.9 m) at the end of 2012. Further, investment 

obligations (including additional payment obligations) 

to non-affiliated companies stood at € 479.1 million 

(581.5 m). These include INR1,329.0 million, or the equivalent 

of € 18.4 million, from a company start-up agreement 

in India. Moreover, investment obligations (including additional 

payment obligations) to associated companies stood 

at € 215.6 million (145.3 m). These include CNY700.0 million, 

or € 85.2 million, from the setting-up of a company in 

China. Credit facilities committed to non-affiliated companies 

totalled € 1.0 million (500.4 m). 

The aforementioned figures represent non-discounted 

nominal amounts. 

ERGO Versicherung AG and ERGO Direkt Versicherung AG, 

Fürth, have pledged contributions to an organisation set up 

to assist traffic accident victims (Verkehrsopferhilfe e.V.); 

each member company’s contribution is calculated on 

the basis of its share of the total membership’s premium 

income from direct motor third-party liability insurance 

in the calendar year before last (“direct” meaning: net of 

reinsurance accepted).





[44] Leasing 

The ERGO Insurance Group as lessee 

At the balance sheet date, future minimum lease payments 

under non-cancellable operating leases totalled 

€ 215.8 million (248.6 m). Payments from operating 

leases concern in particular rents for offices and business 

premises of the Group. At € 0.5 million (0.6 m) on the 

balance sheet date, the sum of liabilities from financial 

leases only accounts for a subordinate amount. 

The ERGO Insurance Group as lessor 

Operating leases mainly involve leased property. The total 

of future minimum lease payments under non- cancellable 

leases at the balance sheet date was € 572.9 million 

(578.3 m). The total of contingent rental payments recorded 

in the financial year as income was € 0.4 million (0.7 m). 

Maturity of leasing relationships 2012 

€ million 

2011 

€ million 

ERGO as lessee 

Not later than one year 46.7 52.1 

Later than one year and not later than five years 100.1 133.7 

Later than five years 69.0 62.8 

Total 215.8 248.6 

ERGO as lessor 

Not later than one year 111.3 113.0 

Later than one year and not later than five years 311.3 283.4 

Later than five years 150.4 181.9 

Total 572.9 578.3 

[45] Liabilities secured by liens 

Group real estate holdings are encumbered by mortgages, 

land charges and annuity charges to a total value of 

€ 19.7 million (20.1 m). 

[46] Number of employees 

Employees (year-end) 2012 2011 

In-house employees 24,166 25,352 

Salaried sales force 5,602 5,959 

Total 29,768 31,311 

The number of staff employed by the Group at year-end 

totalled 19,191 (19,731) in Germany and 10,577 (11,580) in 

other countries. 

[47] Events after the balance sheet date 

No events have occurred since the balance sheet date 

which require separate disclosure.



136 


List of shareholdings as at 31 December 

2012 in accordance with Section 313 para. 2 

of the German Commercial Code (HGB) 

Company name and registered office Footnote Stake held 

Consolidated affiliated companies Germany 

AEVG 2004 GmbH, Frankfurt a 0.00% 

aktiva Vermittlung von Versicherungen und Finanz-Dienstleistungen GmbH, Cologne 100.00% 

ALICE GmbH, Düsseldorf 100.00% 

almeda GmbH, Munich 1, 8 100.00% 

almeda Versicherungs-Aktiengesellschaft, Munich 1, 8 100.00% 

avanturo GmbH, Düsseldorf 100.00% 

CAPITAL PLAZA Holding GmbH & Co. Singapore KG, Düsseldorf 100.00% 

D. A. S. Deutscher Automobil Schutz Allgemeine Rechtsschutz-Versicherungs-Aktiengesellschaft, Munich 2, 8 100.00% 

DKV Deutsche Krankenversicherung Aktiengesellschaft, Cologne 1, 8 100.00% 

DKV Pflegedienste & Residenzen GmbH, Cologne 100.00% 

ERGO Direkt Krankenversicherung AG, Fürth 1 100.00% 

ERGO Direkt Lebensversicherung AG, Fürth 1 100.00% 

ERGO Direkt Versicherung AG, Fürth 1 100.00% 

ERGO Elfte Beteiligungsgesellschaft mbH, Düsseldorf 100.00% 

ERGO Eurosolar GmbH & Co. KG, Nuremberg 100.00% 

ERGO Grundstücksverwaltung GbR, Düsseldorf 100.00% 

ERGO Immobilien-GmbH 14.Victoria & Co. KG, Kreien 9 100.00% 

ERGO Immobilien-GmbH 5.Hamburg-Mannheimer & Co.KG, Kreien 9 100.00% 

ERGO International Aktiengesellschaft, Düsseldorf 1, 8 100.00% 

ERGO International Services GmbH, Düsseldorf 1 100.00% 

ERGO Lebensversicherung Aktiengesellschaft, Hamburg 1, 8 100.00% 

ERGO Neunte Beteiligungsgesellschaft mbH, Düsseldorf 1 100.00% 

ERGO Pensionsfonds Aktiengesellschaft, Düsseldorf 3, 8 100.00% 

ERGO Pensionskasse AG, Düsseldorf 100.00% 

ERGO Private Capital Gesundheit GmbH & Co. KG, Düsseldorf 100.00% 

ERGO Private Capital Leben GmbH & Co. KG, Düsseldorf 100.00% 

ERGO Private Equity Gesundheit GmbH, Düsseldorf 100.00% 

ERGO Private Equity Komposit GmbH, Düsseldorf 100.00% 

ERGO Private Equity Leben GmbH, Düsseldorf 100.00% 

ERGO Versicherung Aktiengesellschaft, Düsseldorf 1, 8 100.00% 

ERGO Zweite Beteiligungsgesellschaft mbH, Düsseldorf 100.00% 

EUROPÄISCHE Reiseversicherung Aktiengesellschaft, Munich 1, 8 100.00% 

FAIRANCE GmbH, Düsseldorf 1 100.00% 

Flexitel Telefonservice GmbH, Berlin 100.00% 

Hamburg-Mannheimer Pensionskasse AG, Hamburg 100.00% 

HMV GFKL Beteiligungs GmbH, Düsseldorf 100.00% 

IDEENKAPITAL Financial Engineering GmbH, Düsseldorf 100.00% 

IDEENKAPITAL Financial Service GmbH, Düsseldorf 100.00% 

IDEENKAPITAL GmbH, Düsseldorf 100.00% 

IDEENKAPITAL Media Finance GmbH, Düsseldorf 50.10% 

IDEENKAPITAL Metropolen Europa GmbH & Co. KG, Düsseldorf 72.35% 

iii, Munich 100.00% 

IK Einkauf Objekt Eins GmbH & Co. KG, Düsseldorf 100.00%




List of shareholdings as at 31 December 2012 in accordance with 



IK Einkauf Objektmanagement GmbH, Düsseldorf 100.00% 

IK Einkaufsmärkte Deutschland GmbH & Co. KG, Düsseldorf 52.04% 

IK Premium Fonds GmbH & Co. KG, Düsseldorf 100.00% 

IK Premium Fonds zwei GmbH & Co. KG, Düsseldorf 100.00% 

IRIS Capital Fund II German Investors GmbH & Co. KG, Düsseldorf 85.71% 

ITERGO Informationstechnologie GmbH, Düsseldorf 1, 8 100.00% 

K & P Pflegezentrum IMMAC Uelzen Renditefonds GmbH & Co. KG, Düsseldorf 84.84% 

LEGIAL AG, Munich 100.00% 

Longial GmbH, Düsseldorf 100.00% 

MEAG Anglo Celtic Fund, Munich 100.00% 

MEAG BLN 2, Munich 100.00% 

MEAG EDL CurryGov, Munich 100.00% 

MEAG EDL EuroValue, Munich 100.00% 

MEAG EDS AGIL, Munich 100.00% 

MEAG Euro 1, Munich 100.00% 

MEAG Euro 2, Munich 100.00% 

MEAG Eurostar (Spezialfonds), Munich 100.00% 

MEAG German Prime Opportunities (GPO), Munich 100.00% 

MEAG Gilagrent, Munich 100.00% 

MEAG Golf 1, Munich 100.00% 

MEAG HBG 1, Munich 100.00% 

MEAG HM Renten, Munich 100.00% 

MEAG HM Sach 1, Munich 100.00% 

MEAG HM Sach Rent 1, Munich 100.00% 

MEAG HM2000, Munich 100.00% 

MEAG HMR1, Munich 100.00% 

MEAG HMR2, Munich 100.00% 

MEAG IREN, Munich 100.00% 

MEAG Kapital 2, Munich 100.00% 

MEAG Kapital 5, Munich 100.00% 

MEAG Multi Sach 1, Munich 100.00% 

MEAG OptiMax, Munich 100.00% 

MEAG PK-NORD, Munich 100.00% 

MEAG PK-WEST, Munich 100.00% 

MEAG PREMIUM, Munich 100.00% 

MEAG RenditePlus, Munich 100.00% 

MEAG REVO, Munich 100.00% 

MEAG SAG 1, Munich 100.00% 

MEAG Sustainability, Munich 100.00% 

MEAG Vidas 4, Munich 100.00% 

MEAG Vidas Rent 3, Munich 100.00% 

MEAG Vigifonds, Munich 100.00% 

MEAG VLA, Munich 100.00% 

Merkur Grundstücks- und Beteiligungs-Gesellschaft mit beschränkter Haftung, Düsseldorf 2 100.00% 

Neckermann Lebensversicherung AG, Fürth 100.00% 

Neckermann Versicherung AG, Nuremberg 100.00% 

OIK Mediclin, Wiesbaden 66.67% 

Seminaris Hotel- und Kongreßstätten-Betriebsgesellschaft mbH, Lüneburg 100.00% 

VHDK Beteiligungsgesellschaft mbH, Düsseldorf 100.00% 

VICTORIA Asien Immobilienbeteiligungs GmbH & Co. KG, Munich 100.00% 

Victoria Italy Property GmbH, Düsseldorf 100.00% 

Victoria Lebensversicherung Aktiengesellschaft, Düsseldorf 1, 8 100.00% 

Victoria US Property Investment GmbH, Düsseldorf 100.00%







Victoria US Property Zwei GmbH, Düsseldorf 100.00% 

Victoria Vierte Beteiligungsgesellschaft mbH, Düsseldorf 100.00% 

Victoria Vierter Bauabschnitt GmbH & Co. KG, Düsseldorf 100.00% 

Vorsorge Lebensversicherung Aktiengesellschaft, Düsseldorf 1, 8 100.00% 

welivit AG, Nuremberg 100.00% 

wse Solarpark Spanien 1 GmbH & Co. KG, Fürth 65.17% 

Consolidated affiliated companies International 

ADB ERGO Lietuva, Vilnius 100.00% 

Amicus Legal Ltd., Bristol 100.00% 

Bank Austria Creditanstalt Versicherung AG, Vienna 90.00% 

Bos Incasso B. V., Groningen 89.76% 

CJSIC “European Travel Insurance”, Moscow 100.00% 

Compagnie Européenne dÀssurances, Nanterre 100.00% 

Compania Europea de Seguros S. A., Madrid 100.00% 

D. A. S. Defensa del Automovilista y de Siniestros – Internacional, S. A. de Seguros y Reaseguros, Barcelona 100.00% 

D. A. S. HELLAS Allgemeine Rechtsschutz-Versicherungs-AG, Athens 100.00% 

D. A. S. Jogvédelmi Biztosíto Részvénytársaság, Budapest 100.00% 

D. A. S. Luxembourg Allgemeine Rechtsschutz-Versicherung S. A., Strassen 99.95% 

D. A. S. Oigusabikulude Kindlustuse AS, Tallinn 100.00% 

D. A. S. Österreichische Allgemeine Rechtsschutz-Versicherungs-Aktiengesellschaft, Vienna 99.98% 

D. A. S. poist'ovna právnej ochrany, a. s., Bratislava 100.00% 

D. A. S. pojišt'ovna právní ochrany, a. s., Prague 100.00% 

D. A. S. Société anonyme belge d'assurances de Protection Juridique, Brussels 99.98% 

D. A. S. Towarzystwo Ubezpieczen Ochrony Prawnej S. A., Warszawa 99.95% 

DAS Assistance Limited, Bristol 100.00% 

DAS Holding N. V., Amsterdam 51.00% 

DAS Legal Expenses Insurance Co., Ltd., Seoul 100.00% 

DAS Legal Expenses Insurance Company Limited, Bristol 100.00% 

DAS Legal Finance B. V., Amsterdam 100.00% 

DAS Legal Protection Insurance Company Ltd., Toronto 100.00% 

DAS LEGAL SERVICES LIMITED, Bristol 100.00% 

DAS Nederlandse Rechtsbijstand Verzekeringmaatschappij N. V., Amsterdam 100.00% 

DAS Rechtsschutz-Versicherungs-AG, Lucerne 100.00% 

DAS Services Limited, Bristol 100.00% 

DAS Support B. V., Amsterdam 100.00% 

DAS UK Holdings Limited, Bristol 100.00% 

DB Platinum IV SICAV (Subfonds Institutional Fixed Income, Inhaber-Anteile I2D), Luxembourg a 100.00% 

ERGO ASIGURARI DE VIATA SA, Bucharest 100.00% 

ERGO Assicurazioni S. p. A., Milan 100.00% 

ERGO Austria International AG, Vienna 100.00% 

ERGO Direkt Lebensversicherung AG, Schwechat 100.00% 

ERGO Élétbiztosító Zrt., Budapest 100.00% 

ERGO Emeklilik ve Hayat A. S., Istanbul 100.00% 

ERGO Eurosolar S. a. s. di welivit Solar Italia S. r. l., Bozen 100.00% 

ERGO Funds AS, Tallinn 100.00% 

ERGO General Insurance Company S. A., Athens 100.00% 

ERGO Grubu Holding A. Ş., Istanbul 100.00% 

ERGO Insurance N. V., Brussels 100.00% 

ERGO Invest SIA, Riga 100.00% 

ERGO Italia Business Solutions S. c. r. l., Milan 100.00% 

ERGO Italia Direct Network s. r. l., Milan 100.00% 

ERGO Italia S. p. A., Milan 100.00%







ERGO Kindlustuse AS, Tallinn 100.00% 

ERGO Latvija Versicherung AG (ERGO Latvija Apdrosinasanas Akciju Sabiedriba), Riga 100.00% 

ERGO Life Insurance Company S. A., Salonika 100.00% 

ERGO Life Insurance SE, Vilnius 100.00% 

ERGO osiguranje d.d, Zagreb 100.00% 

ERGO Partners N. V., Brussels 100.00% 

ERGO pojištóvna, a. s., Prague 100.00% 

ERGO Previdenza S. p. A., Milan 100.00% 

ERGO RUSS Versicherung AG, St. Petersburg 100.00% 

ERGO Shisn, Moscow 100.00% 

ERGO SIGORTA A. S., Istanbul 100.00% 

ERGO Versicherung Aktiengesellschaft, Vienna 100.00% 

ERGO Zivljenjska zavarovalnica d. d., Ljubljana 100.00% 

ERGO životná poisťovňa, a. s., Bratislava 100.00% 

ERGO Zivotno osiguranje d.d, Zagreb 100.00% 

ERV Försäkringsaktiebolag (publ), Stockholm 100.00% 

ERV pojišt'ovna, a. s., Prague 90.00% 

Europaeiske Rejseforsikring A/S, Copenhagen 100.00% 

European International Holding A/S, Copenhagen 100.00% 

Everything Legal Ltd., Bristol 100.00% 

Geschlossene Aktiengesellschaft Europäische Reiseversicherung, Kiev 100.00% 

GF 65, Vienna 100.00% 

Habiriscos – Investimentos Imobiliarios e Turisticos, S. A., Lisbon 100.00% 

Ibero Property Portugal – Investimentos Imobiliarios S. A., Lisbon 100.00% 

Ibero Property Trust S. A., Madrid 100.00% 

IKFE Properties I AG, Zurich 63.55% 

Imofloresmira – Investimentos Imobiliarios S. A., Lisbon 100.00% 

InsuranceAssistance FLLC, Minsk 100.00% 

Joint Stock Insurance Company ERGO, Minsk 92.31% 

Kapdom-Invest GmbH, Moscow 100.00% 

Landelijke Associatie van Gerechtsdeurwaarders B. V., Groningen c 89.76% 

LAVG Associatie van Gerechtsdeurwaarders Zuid Holding B. V., Breda c 80.00% 

Marina Sp. z. o. o., Sopot 100.00% 

MTU Moje Towarzystwo Ubezpieczeniowe S. A., Sopot 100.00% 

Nightingale Legal Services Ltd., Bristol 100.00% 

Queensley Holdings Limited, Singapore a, d 100.00% 

Renaissance Hotel Realbesitz GmbH, Vienna 60.00% 

Sopocki Instytut Ubezpieczeń S. A., Sopot 100.00% 

Sopockie Towarzystwo Ubezpieczen Ergo Hestia Spolka Akcyjna, Sopot 100.00% 

Sopockie Towarzystwo Ubezpieczen na Zycie Ergo Hestia Spolka Akcyjna, Sopot 100.00% 

Union Beteiligungsholding GmbH, Vienna 100.00% 

Van Arkel Gerechtsdeurwaarders B. V., Leiden c 79.90% 

Victoria Investment Properties Two L. P., Atlanta 100.00% 

Victoria US Holdings, Inc., Wilmington, Delaware 100.00% 

VICTORIA-VOLKSBANKEN Eletbiztosító Zrt., Budapest 100.00% 

VICTORIA-VOLKSBANKEN Poistóvna, a. s., Bratislava 100.00% 

VICTORIA-VOLKSBANKEN Biztosító Zrt., Budapest 100.00% 

Vorsorge Luxembourg Lebensversicherung S. A., Munsbach 100.00% 

Non-consolidated affiliated companies Germany 

ARTES Assekuranzservice GmbH, Düsseldorf 100.00% 

ArztPartner almeda AG, Munich 100.00% 

BioEnergie Elbe-Elster GmbH & Co. KG, Elsterwerda 100.00%







BioEnergie Verwaltungs-GmbH, Elsterwerda 100.00% 

Blitz 01–807 GmbH, Munich 100.00% 

CAPITAL PLAZA Holding GmbH, Düsseldorf 100.00% 

CarePlus Gesellschaft für Versorgungsmanagement mbH, Cologne 100.00% 

Ciborum GmbH, Munich 100.00% 

DKV – Beta Vermögensverwaltungs GmbH, Cologne 100.00% 

DKV Gesundheits Service GmbH, Cologne 100.00% 

DKV Immobilienverwaltungs GmbH, Cologne 100.00% 

DKV Residenz am Tibusplatz gGmbH, Münster 100.00% 

DKV-Residenz in der Contrescarpe GmbH, Bremen 100.00% 

ERGO Alpha GmbH, Düsseldorf 100.00% 

ERGO Gourmet GmbH, Düsseldorf 100.00% 

ERGO Immobilien-GmbH 1. DKV & Co. KG, Kreien 100.00% 

ERGO Immobilien-GmbH 15.Victoria & Co. KG, Kreien 100.00% 

ERGO Immobilien-GmbH 4. DKV & Co. KG, Kreien 100.00% 

ERGO Immobilien-GmbH 6.Hamburg-Mannheimer & Co. KG, Kreien 100.00% 

ERGO Immobilien-GmbH 7.Hamburg-Mannheimer & Co. KG, Kreien 100.00% 

ERGO Immobilien-Verwaltungs-GmbH, Kreien 100.00% 

ERGO Leben Asien Verwaltungs GmbH, Munich 100.00% 

ERGO Private Capital GmbH, Düsseldorf 100.00% 

ERGO Private Capital Zweite GmbH & Co. KG, Düsseldorf 100.00% 

ERGO Specialty GmbH, Hamburg 100.00% 

ERGO Versicherungs- und Finanzierungs-Vermittlung GmbH, Hamburg 100.00% 

ERGO Zehnte Beteiligungsgesellschaft mbH, Düsseldorf 100.00% 

EUREKA GmbH, Düsseldorf 100.00% 

European Assistance Holding GmbH, Munich 100.00% 

EVV Logistik Management GmbH, Düsseldorf 100.00% 

Exolvo GmbH, Hamburg 100.00% 

GBG Vogelsanger Straße GmbH, Cologne 94.00% 

Gebäude Service Gesellschaft Überseering 35 mbH, Hamburg 100.00% 

GEMEDA Gesellschaft für medizinische Datenerfassung und Auswertung 

sowie Serviceleistungen für freie Berufe mbH, Cologne 100.00% 

goDentis – Gesellschaft für Innovation in der Zahnheilkunde mbH, Cologne 100.00% 

goMedus Gesellschaft für Qualität in der Medizin mbH, Cologne 100.00% 

goMedus GmbH & Co. KG, Cologne 100.00% 

Hamburg-Mannheimer Rechtsschutz Schaden-Service GmbH, Hamburg 100.00% 

Horbach GmbH Versicherungsvermittlung und Finanzdienstleistungen, Düsseldorf 70.10% 

IDEENKAPITAL Anlagebetreuungs GmbH, Düsseldorf 4 100.00% 

Ideenkapital Client Service GmbH, Düsseldorf 4 100.00% 

Ideenkapital erste Investoren Service GmbH, Düsseldorf 100.00% 

Ideenkapital Fonds Treuhand GmbH, Düsseldorf 100.00% 

Ideenkapital Media Treuhand GmbH, Düsseldorf 100.00% 

IDEENKAPITAL Metropolen Europa Verwaltungsgesellschaft mbH, Düsseldorf 100.00% 

IDEENKAPITAL PRORENDITA EINS Treuhandgesellschaft mbH, Düsseldorf 100.00% 

IDEENKAPITAL Schiffsfonds Treuhand GmbH, Düsseldorf 100.00% 

Ideenkapital Treuhand GmbH, Düsseldorf 100.00% 

IDEENKAPITAL Treuhand US Real Estate eins GmbH, Düsseldorf 100.00% 

IK Einkauf Objektverwaltungsgesellschaft mbH, Düsseldorf 100.00% 

IK Einkaufsmärkte Deutschland Verwaltungsgesellschaft mbH, Düsseldorf 100.00% 

IK FE Fonds Management GmbH, Düsseldorf 100.00% 

IK FE Management GmbH, Düsseldorf 100.00% 

IK Komp GmbH, Düsseldorf 100.00% 

IK Objekt Bensheim GmbH, Düsseldorf 100.00%







IK Objekt Frankfurt Theodor-Heuss-Allee GmbH, Düsseldorf 100.00% 

IK Pflegezentrum Uelzen Verwaltungs-GmbH, Düsseldorf 100.00% 

IK Property Eins Verwaltungsgesellschaft mbH, Hamburg 100.00% 

IK Property Treuhand GmbH, Düsseldorf 100.00% 

IK US Portfolio Invest DREI Verwaltungs-GmbH, Düsseldorf 100.00% 

IK US Portfolio Invest Verwaltungs-GmbH, Düsseldorf 100.00% 

IK US Portfolio Invest ZWEI Verwaltungs-GmbH, Düsseldorf 100.00% 

InterAssistance Gesellschaft für Dienstleistungen mit beschränkter Haftung, Munich 100.00% 

Juventus Vermögensverwaltungs AG, Hamburg 100.00% 

K & P Objekt Hamburg Hamburger Straße GmbH, Düsseldorf 100.00% 

K & P Objekt Munich Hufelandstraße GmbH, Düsseldorf 100.00% 

KQV Solarpark Franken 1 GmbH & Co. KG, Fürth 100.00% 

Legal Net GmbH, Munich 100.00% 

m:editerran POWER FRANCE GmbH, Nuremberg 100.00% 

m:editerran POWER GmbH & Co. KG, Nuremberg 100.00% 

MAYFAIR Holding GmbH, Düsseldorf 100.00% 

Mediastream Consulting GmbH, Grünwald 100.00% 

Mediastream Dritte Film GmbH, Grünwald 100.00% 

Mediastream Film GmbH, Grünwald 100.00% 

Mediastream Vierte Medien GmbH, Grünwald 100.00% 

Mediastream Zweite Film GmbH, Grünwald 100.00% 

MedWell Gesundheits-AG, Cologne 100.00% 

miCura Pflegedienste Berlin GmbH, Berlin 100.00% 

miCura Pflegedienste Bremen GmbH, Bremen 100.00% 

miCura Pflegedienste Düsseldorf GmbH, Düsseldorf 100.00% 

miCura Pflegedienste GmbH, Cologne 100.00% 

miCura Pflegedienste Hamburg GmbH, Hamburg 100.00% 

miCura Pflegedienste Krefeld GmbH, Krefeld 100.00% 

miCura Pflegedienste Munich / Dachau GmbH, Dachau 51.00% 

miCura Pflegedienste Munich GmbH, Munich 100.00% 

miCura Pflegedienste Munich Ost GmbH, Munich 65.00% 

miCura Pflegedienste Münster GmbH, Münster 100.00% 

miCura Pflegedienste Nuremberg GmbH, Nuremberg 51.00% 

PLATINIA Verwaltungs-GmbH, Munich 100.00% 

PRORENDITA DREI Verwaltungsgesellschaft mbH, Hamburg 100.00% 

PRORENDITA EINS Verwaltungsgesellschaft mbH, Hamburg 100.00% 

PRORENDITA FÜNF Verwaltungsgesellschaft mbH, Hamburg 100.00% 

PRORENDITA VIER Verwaltungsgesellschaft mbH, Hamburg 100.00% 

PRORENDITA ZWEI Verwaltungsgesellschaft mbH, Hamburg 100.00% 

Quirinus AG, Düsseldorf 100.00% 

Schrömbgens & Stephan GmbH, Versicherungsmakler, Düsseldorf 100.00% 

Seldac 1. Kommunaler-Rendite-Fonds GmbH & Co. KG, Düsseldorf 100.00% 

Seldac 1. Verwaltungs-GmbH, Düsseldorf 100.00% 

Solarfonds Garmisch-Partenkirchen 2011 GmbH & Co. KG, Nuremberg 99.75% 

TAS Assekuranz Service GmbH, Frankfurt/Main 100.00% 

TAS Touristik Assekuranz Service International GmbH, Frankfurt/Main 5 100.00% 

TAS Touristik Assekuranzmakler und Service GmbH, Frankfurt/Main 5 100.00% 

Titus AG, Düsseldorf 100.00% 

Trusted Documents GmbH, Nuremberg 100.00% 

US PROPERTIES VA Verwaltungs-GmbH, Düsseldorf 100.00% 

Verwaltungsgesellschaft “PORT VICTORIA” GmbH, Hamburg 100.00% 

Victoria Erste Beteiligungsgesellschaft mbH, Düsseldorf 100.00% 

Victoria Immobilien-Fonds GmbH, Düsseldorf 100.00%







VICTORIA US Beteiligungsgesellschaft mbH, Munich 100.00% 

Victoria Vierter Bauabschnitt Management GmbH, Düsseldorf 100.00% 

Viwis GmbH, Munich 6 100.00% 

Vorsorge Service GmbH, Düsseldorf 100.00% 

welivit New Energy GmbH, Fürth 100.00% 

welivit Solar España GmbH, Nuremberg 100.00% 

WNE Solarfonds Süddeutschland 2 GmbH & Co. KG, Nuremberg 100.00% 

Wohnungsgesellschaft Brela mbH, Hamburg 7 100.00% 

Non-consolidated affiliated companies International 

80e LIMITED, Bristol 100.00% 

Acalater 140014 S. L., Playa del Inglés 100.00% 

Aitesacho 5005 S. L., Playa del Inglés 100.00% 

Albulzaga 8008 S. L., Playa del Inglés 100.00% 

Aleama 150015 S. L., Madrid 100.00% 

Amicus Ltd., Bristol 100.00% 

Amladeza 7007 S. L., Playa del Inglés 100.00% 

Arridabra 130013 S. L., Madrid 100.00% 

B&D Acquisition B. V., Amsterdam 80.00% 

B&D Business Solutions B. V., Utrecht 100.00% 

Badozoc 1001 S. L., Madrid 100.00% 

Bank Austria Creditanstalt Versicherungsdienst GmbH, Vienna 100.00% 

Baqueda 7007 S. L., Madrid 100.00% 

Bobasbe 6006 S. L., Madrid 100.00% 

Botedazo 8008 S. L., Madrid 100.00% 

Bureau voor kredietinformaties Janssen B. V., s-Gravenhage 100.00% 

Bureau voor kredietinformaties Janssen Holding B. V., s-Gravenhage 100.00% 

Callopio 5005 S. L., Madrid 100.00% 

Camcichu 9009 S. L., Madrid 100.00% 

Caracuel Solar Catorce S. L., Madrid 100.00% 

Caracuel Solar Cinco S. L., Madrid 100.00% 

Caracuel Solar Cuatro S. L., Madrid 100.00% 

Caracuel Solar Dieciocho S. L., Madrid 100.00% 

Caracuel Solar Dieciseis S. L., Madrid 100.00% 

Caracuel Solar Diecisiete S. L., Madrid 100.00% 

Caracuel Solar Diez S. L., Madrid 100.00% 

Caracuel Solar Doce S. L., Madrid 100.00% 

Caracuel Solar Dos S. L., Madrid 100.00% 

Caracuel Solar Nueve S. L., Madrid 100.00% 

Caracuel Solar Ocho S. L., Madrid 100.00% 

Caracuel Solar Once S. L., Madrid 100.00% 

Caracuel Solar Quince S. L., Madrid 100.00% 

Caracuel Solar Seis S. L., Madrid 100.00% 

Caracuel Solar Siete S. L., Madrid 100.00% 

Caracuel Solar Trece S. L., Madrid 100.00% 

Caracuel Solar Tres S. L., Madrid 100.00% 

Caracuel Solar Uno S. L., Madrid 100.00% 

Chobocuga 150015 S. L., Playa del Inglés 100.00% 

Cotatrillo 100010 S. L., Madrid 100.00% 

DAS Consultancy & Detachering Rotterdam B. V., Rotterdam 75.02% 

DAS Financial Services B. V., Amsterdam 51.00% 

DAS Incasso Arnhem B. V., Arnheim 100.00% 

DAS Incasso Eindhoven B. V., s-Hertogenbosch 80.00%







DAS Incasso Rotterdam B. V., Rotterdam 80.00% 

DAS Law Limited, Bristol 100.00% 

DAS Legal Protection Ireland Limited, Dublin 100.00% 

DAS Legal Protection Limited, Christchurch, New Zealand 100.00% 

DAS Legal Protection Limited, Vancouver 100.00% 

DAS Legal Protection Pty. Ltd., Sydney 100.00% 

DAS Lex Assistance, S. L., L´Hospitalet de Llobregat 100.00% 

De Wit Vissers Incasso Holding B. V., Breda 95.00% 

DRA Debt Recovery Agency B. V., s-Gravenhage 100.00% 

Economic Data Research B. V., Leidschendam 100.00% 

Economic Data Resources B. V., Leidschendam 100.00% 

EDR Acquisition B. V., Amsterdam 100.00% 

EDR Credit Services B. V., s-Gravenhage 100.00% 

ERGO Asia Management Pte. Ltd., Singapore 100.00% 

ERGO GmbH, Herisau 100.00% 

ERGO Insurance Service GmbH, Vienna 99.60% 

ERGO PORTFÖY YÖNETIMI A. S., Istanbul 100.00% 

ERGO Pro Sp. z o. o., Warsaw 100.00% 

ERGO Pro, spol. s r. o., Prague 100.00% 

ERIN Sigorta Aracilik Hizmetleri Limited Sirketi, Istanbul 100.00% 

ERV (China) Travel Service and Consulting Ltd., Beijing 100.00% 

ERV (India) Travel Service and Consulting Private Limited, Mumbai 100.00% 

ERV Seyahat Sigorta Aracilik Hizmetleri ve Danismanlik Ltd.Sti., Istanbul 99.00% 

Esoleme 120012 S. L., Playa del Inglés 100.00% 

Etics, s. r. o., Prague 100.00% 

Etoblete 160016 S. L., Madrid 100.00% 

Etogibon 100010 S. L., Playa del Inglés 100.00% 

Etolede 6006 S. L., Playa del Inglés 100.00% 

Euro Alarm Assistance Pragueue, Prague 100.00% 

Euro-Center (Cyprus) Ltd., Larnaca 100.00% 

Euro-Center (Thailand) Co. Ltd., Bangkok 100.00% 

Euro-Center Cape Town (Pty.) Ltd., Cape Town 100.00% 

Euro-Center China (HK) Co., Ltd., Beijing 100.00% 

Euro-Center Holding A/S, Copenhagen 83.33% 

Euro-Center Holding North Asia (HK) Pte. Ltd., Hong Kong 100.00% 

Euro-Center Ltda., Rio de Janeiro 100.00% 

Euro-Center USA, Inc., New York 100.00% 

Euro-Center Yerel Yardim, Istanbul 100.00% 

Euro-Center, S. A. (Spain), Palma de Mallorca 100.00% 

Europäische (UK) Ltd., London 100.00% 

First Legal Protection Limited, Bristol 100.00% 

Gamaponti 140014 S. L., Madrid 100.00% 

GRANCAN Sun-Line S. L., Madrid 100.00% 

Guanzu 2002 S. L., Madrid 100.00% 

Hamburg-Mannheimer ForsikringService A/S, Copenhagen 100.00% 

Health OÜ, Tallinn 100.00% 

Hestia Advanced Risk Solutions Sp. z. o. o., Sopot 100.00% 

Hestia Loss Control Sp. z o. o., Sopot 100.00% 

HMI S. r. l., Verona 100.00% 

Humanity B. V., s-Gravenhage 100.00% 

Ibero Property Guadalix S. A., Madrid 100.00% 

Kuik & Partners Credit Management BVBA, Brussels 98.90% 

Kuik & Partners Gerechtsdeurwaarders & Incassobureau B. V., Eindhoven 100.00%







LAVG Zuid B. V., Breda 100.00% 

LawAssist Limited, Bristol 100.00% 

m:editerran Power S. a. s. di welivit Solar Italia S. r. l., Bozen 100.00% 

MESA ASISTENCIA, S. A., Madrid 99.90% 

Naretoblera 170017 S. L., Madrid 100.00% 

Nassau Incasso Services Den Haag B. V., s-Gravenhage 100.00% 

Nerruze 120012 S. L., Madrid 100.00% 

Nicamballo 1001 S. L., Playa del Inglés 100.00% 

Olbodeca 4004 S. L., Playa del Inglés 100.00% 

Oracuet 160016 S. L., Playa del Inglés 100.00% 

Oragulno 9009 S. L., Playa del Inglés 100.00% 

Oraunte 130013 S. L., Playa del Inglés 100.00% 

Orrazipo 110011 S. L., Madrid 100.00% 

Otusleme 3003 S. L., Playa del Inglés 100.00% 

ProContact Sp. z o. o., Gdansk 100.00% 

SAINT LEON ENERGIE S. A. R. L., Strasbourg 100.00% 

Sopockie Towarzystwo Doradcze Sp. z o. o., Sopot 100.00% 

Stichting Aandelen Beheer D. A. S. Holding, Amsterdam 100.00% 

Sydney Euro-Center Pty. Ltd., Sydney 100.00% 

Teginago 2002 S. L., Playa del Inglés 100.00% 

Tenoslema 110011 S. L., Playa del Inglés 100.00% 

TGR Biztosítás Többesügynöki Zrt., Budapest 100.00% 

Tillobesta 180018 S. L., Madrid 100.00% 

VB Victoria Zastupanje u Osiguranju d. o. o., Zagreb 74.90% 

VFG Vorsorge-Finanzierungsconsulting GmbH, Vienna 100.00% 

Victoria VIP II, Inc., Wilmington, Delaware 100.00% 

VV-Consulting Gesellschaft für Risikoanalyse, Vorsorgeberatung und Versicherungsvermittlung GmbH, Vienna 100.00% 

VV-Consulting Többesügynöki Kft., Budapest 100.00% 

welivit Solar Italia s. r. l., Bozen 100.00% 

Zacobu 110011 S. L., Madrid 100.00% 

Zacuba 6006 S. L., Madrid 100.00% 

Zacubacon 150015 S. L., Madrid 100.00% 

Zafacesbe 120012 S. L., Madrid 100.00% 

Zagacobi 180018 S. L., Playa del Inglés 100.00% 

Zapaceba 170017 S. L., Playa del Inglés 100.00% 

Zapacubi 8008 S. L., Madrid 100.00% 

Zarzucolumbu 100010 S. L., Madrid 100.00% 

Zetaza 4004 S. L., Madrid 100.00% 

Zicobucar 140014 S. L., Madrid 100.00% 

Zucaelo 130013 S. L., Madrid 100.00% 

Zucampobi 3003 S. L., Madrid 100.00% 

Zucarrobiso 2002 S. L., Madrid 100.00% 

Zucobaco 7007 S. L., Madrid 100.00% 

Zulazor 3003 S. L., Madrid 100.00% 

Zumbicobi 5005 S. L., Madrid 100.00% 

Zumcasba 1001 S. L., Madrid 100.00% 

Zuncabu 4004 S. L., Madrid 100.00% 

Zuncolubo 9009 S. L., Madrid 100.00% 

Associates valued at equity Germany 

Dovull SPV GmbH & Co. KG, Frankfurt/Main 20.06% 

HighTech Beteiligungen GmbH und Co. KG, Düsseldorf 23.10% 

KarstadtQuelle Finanz Service GmbH, Düsseldorf 50.00%







MAYFAIR Holding GmbH & Co. Singapore KG, Düsseldorf e 71.43% 

MCAF Verwaltungs-GmbH & Co.KG, Düsseldorf 50.00% 

MEAG Cash Management GmbH, Munich 40.00% 

MEAG MUNICH ERGO AssetManagement GmbH, Munich 40.00% 

MEDICLIN Aktiengesellschaft, Offenburg 35.00% 

MEGA 4 GbR, Berlin 34.26% 

Rendite Partner Gesellschaft für Vermögensverwaltung mbH, Frankfurt/Main 33.33% 

RP Vilbeler Fondsgesellschaft mbH, Frankfurt/Main 40.00% 

Sana Kliniken AG, Munich 21.70% 

TERTIANUM Besitzgesellschaft Berlin Passauer Strasse 5− 7 mbH, Munich 25.00% 

TERTIANUM Besitzgesellschaft Konstanz Marktstätte 2− 6 und Sigismundstrasse 5− 9 mbH, Munich 25.00% 

TERTIANUM Besitzgesellschaft Munich Jahnstrasse 45 mbH, Munich 33.33% 

US PROPERTIES VA GmbH & Co. KG, Düsseldorf 46.09% 

U. S. Property Fund IV GmbH & Co. KG, Munich b 9.78% 

VV Immobilien GmbH & Co. United States KG, Munich 28.95% 

VV Immobilien GmbH & Co. US City KG, Munich 23.10% 

VV Immobilien Verwaltungs GmbH & Co. Zentraleuropa KG, Munich 20.41% 

WISMA ATRIA Holding GmbH & Co. Singapore KG, Düsseldorf e 65.00% 

Associates valued at equity International 

D. A. S. Difesa Automobilistica Sinistri, S. p. A. di Assicurazione, Verona 49.99% 

ERGO China Life Insurance Co., Ltd., Jinan, Shandong Province 50.00% 

Europai Utazasi Biztosito Rt., Budapest 26.00% 

Europäische Reiseversicherungs-Aktiengesellschaft, Vienna 25.01% 

Global Insurance Company, Ho Chi Minh City 25.00% 

HDFC ERGO General Insurance Company Ltd., Mumbai 26.00% 

Millennium Entertainment Partners II L. P., New York f 42.30% 

Millennium Entertainment Partners L. P., New York g 27.54% 

Millennium Partners LLC, New York h 20.30% 

Property Finance France S. A., Luxembourg 45.46% 

SAS Le Point du Jour, Paris 50.00% 

VICTORIA-VOLKSBANKEN Pensionskassen Aktiengesellschaft, Vienna 47.50% 

VICTORIA-VOLKSBANKEN Vorsorgekasse AG, Vienna 50.00% 

Other associated companies Germany 

“PORT ELISABETH” GmbH & Co. KG, Hamburg 31.97% 

“PORT LOUIS” GmbH & Co. KG, Hamburg 25.82% 

Assistance Partner GmbH & Co. KG, Munich 21.66% 

BF.direkt AG, Stuttgart 27.20% 

carexpert Kfz-Sachverständigen GmbH, Walluf 25.00% 

Fernkälte Geschäftsstadt Nord Gesellschaft bürgerlichen Rechts, Hamburg 39.34% 

Hannover Finanz-Umwelt Beteiligungsgesellschaft mbH, Hillerse 20.00% 

IK Objektgesellschaft Frankfurt Theodor-Heuss-Allee GmbH & Co. KG, Düsseldorf 47.40% 

K & P Objekt Hamburg Hamburger Straße Immobilienfonds GmbH & Co.KG, Düsseldorf 36.69% 

MCAF Management GmbH, Düsseldorf 50.00% 

Reisegarant, Vermittler von Insolvenzversicherungen mbH, Hamburg 24.00% 

Teko – Technisches Kontor für Versicherungen Gesellschaft mit beschränkter Haftung, Düsseldorf 30.00% 

TERTIANUM Seniorenresidenz Betriebsgesellschaft Munich mbH, Munich 33.33% 

TERTIANUM Seniorenresidenzen Betriebsgesellschaft mbH, Konstanz 25.00% 

Verwaltungsgesellschaft “PORT ELISABETH” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “Port Hedland” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT KELANG” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “Port Lincoln” mbH, Hamburg 50.00%







Verwaltungsgesellschaft “PORT LOUIS” GmbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT MAUBERT” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT MELBOURNE” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT MENIER” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT MOODY” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT MORESBY” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT MOUTON” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT NELSON” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT RUSSEL” GmbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT SAID” GmbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT STANLEY” GmbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT STEWART” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “PORT UNION” mbH, Hamburg 50.00% 

Verwaltungsgesellschaft “Port Williams” mbH, Hamburg 50.00% 

VV Immobilien GmbH & Co. GB KG, Düsseldorf 40.92% 

WISMA ATRIA Holding GmbH, Düsseldorf 50.00% 

Other associated companies International 

POOL Sp. z o. o., Warsaw 33.75% 

Secundi CBVA, Brussels 33.00% 

Triple IP B. V., Amsterdam 50.00% 

Volksbanken-Versicherungsdienst GmbH, Vienna 25.23% 

Other shareholdings 

– – – 

a) Consolidation pursuant to SIC 12 

b) Significant influence pursuant to IAS 28.7 

Differing voting power: 

c) 49.00% 

d) 0.00% 

e) 50.00% 

f) 42.34% 

g) 42.36% 

h) 25.00% 

1 Domination and profit transfer agreement with ERGO Versicherungsgruppe AG 

2 Domination and profit transfer agreement with ERGO Versicherung Aktiengesellschaft 

3 Domination agreement with ERGO Versicherungsgruppe AG 

4 Profit transfer agreement with IDEENKAPITAL GmbH 

5 Profit transfer agreement with EUROPÄISCHE Reiseversicherung Aktiengesellschaft 

6 Profit transfer agreement with D.A.S. Deutscher Automobil Schutz Allgemeine Rechtsschutz-Versicherungs-Aktiengesellschaft 

7 Profit transfer agreement with ERGO Versicherung Aktiengesellschaft 

8 This fully consolidated subsidiary make full or partial use of the exemption in accordance with Section 264 para. 3 

of the German Commercial Code for their own financial statements. 

9 This fully consolidated subsidiary with the legal form of a partnership as defined in Section 264a of the German Commercial Code make full or 

partial use of the exemption in accordance with Section 264b of the German Commercial Code for their own financial statements.



147 

Düsseldorf, 12 February 2013 


Board of Management 

Dr. Torsten Oletzky 

Dr. Bettina Anders 

Dr. Daniel von Borries 

Christian Diedrich 

Dr. Christoph Jurecka 

Dr. Ulf Mainzer 

Dr. Jochen Messemer 

Dr. Clemens Muth 

Dr. Rolf Wiswesser



148 

Auditor’s report 

We have duly audited the consolidated financial statements 

comprising the consolidated balance sheet, the consolidated 

income statement, the statement of recognised 

income and expense, the Group statement of changes 

in equity, the consolidated cash flow statement and the 

notes to the consolidated financial statements, together 

with the Group management report prepared by ERGO Versicherungsgruppe 

AG in Düsseldorf for the financial year 

from 1 January to 31 December 2012. The responsibility for 

preparing consolidated financial statements in line with 

IFRS, as adopted by the EU, and the additional provisions 

stated in Section 315a, para. 1 of the German Commercial 

Code (HGB) lies with the Company’s Board of Management. 

Our task is to form, on the basis of our audit, an assessment 

of the consolidated financial statements. 

We conducted our audit of the consolidated annual financial 

statements in accordance with Section 317 of the 

German Commercial Code (HGB), paying due regard to the 

generally accepted German standards concerning accounting 

principles as set out by the Institute of Public Auditors 

in Germany (IDW). These standards require that we plan 

and perform the audit such that misstatements materially 

affecting the presentation of net assets, financial position 

and earnings situation in the consolidated financial statements 

in accordance with the applicable financial reporting 

framework are detected with reasonable assurance. When 

determining the audit procedures, the knowledge of the 

Group’s field of business, its economic and legal environment 

and expectations regarding possible mistakes have 

to be taken into account. During the audit the effectiveness 

of the accounting-related internal control systems as well 

as evidence supporting the disclosures in the consolidated 

financial statements and Group management report are 

judged primarily on the basis of spot checks. The audit 

comprises the assessment of the financial statements 

of the individual companies included in the consolidated 

financial statements, definition of consolidated group, 

accounting and consolidating principles used and significant 

estimates made by the Board of Management, as 

well as an evaluation of the overall presentation of the 

consolidated financial statements and Group management 

report. We believe the audit we have conducted provides a 

sufficiently secure basis for our professional opinion. 

We have no objections to raise following our audit. 

In our opinion, based on the results of our audit, the 

consolidated financial statements conform to IFRS, as 

adopted by the EU, and the additional provisions stated in 

Section 315a, para. 1 HGB, and give a fair and true view of 

the net assets, financial position and earnings situation of 

the Group in accordance with these provisions. The Group 

management report is in keeping with the consolidated 

financial statements and provides an accurate overall 

picture of the Group’s situation and suitably portrays the 

opportunities and risks inherent in future developments. 

Munich, 5 March 2013 

KPMG Bayerische Treuhandgesellschaft 

Aktiengesellschaft 

Wirtschaftsprüfungsgesellschaft 

Steuerberatungsgesellschaft 

Martin Berger 

Chartered accountant 

Roland Hansen 

Chartered accountant

Detailed contact information of our companies can 

be found on our website 

www.ergo.com 

under Company/ERGO Germany and ERGO International. 

Print 

compensated 

Id-No. 1325898 

www.bvdm-online.de 

Published by: 


Victoriaplatz 2 

40198 Düsseldorf 

Tel + 49 211 477− 0 

Fax + 49 211 477− 1500 

www.ergo.com 

This edition of the Group Annual Report 

has been translated into English from the German original. 

Concept, content and design: 


Photos: Robert Brembeck, Christoph Bünten 

Lithography: 

Vignold Group GmbH, Ratingen 

Printed: August Lönneker GmbH & Co. KG, 

Stadtoldendorf

50064953 | ERGO48

Group Annual Report 2012 - ERGO Versicherungsgruppe AG

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