talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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102<br />
The Talanx Group Strategy Enterprise<br />
managem<strong>en</strong>t<br />
Talanx Group. Annual Report <strong>2011</strong><br />
Research and<br />
developm<strong>en</strong>t<br />
With respect to risk limitation, key indicators have be<strong>en</strong> specified<br />
for steering and monitoring the Group’s risks within our c<strong>en</strong>tral system<br />
of limits and thresholds. In this context, limits and thresholds<br />
for quantitatively measurable risks are designed to operationalise<br />
risk steering and monitoring. Material risks that are impossible or<br />
difficult to quantify (such as operational risks) are primarily steered<br />
and monitored using appropriate processes and practices.<br />
In the area of risk monitoring we distinguish betwe<strong>en</strong> process-integrated<br />
indep<strong>en</strong>d<strong>en</strong>t monitoring and process-indep<strong>en</strong>d<strong>en</strong>t monitoring.<br />
Process-integrated indep<strong>en</strong>d<strong>en</strong>t monitoring is primarily the<br />
responsibility of the Risk Committee, the Chief Risk Officer and<br />
the organisational units supporting the CRO. Process-indep<strong>en</strong>d<strong>en</strong>t<br />
monitoring is carried out by Internal Auditing and the Supervisory<br />
Board.<br />
The purpose of our risk <strong>report</strong>ing is to provide systematic and<br />
timely information about risks and their pot<strong>en</strong>tial implications<br />
and to <strong>en</strong>sure adequate in-house communication about all material<br />
risks as a basis for decision-making. Regular <strong>report</strong>ing on both<br />
curr<strong>en</strong>t business developm<strong>en</strong>ts and on risk managem<strong>en</strong>t issues is<br />
int<strong>en</strong>ded to <strong>en</strong>sure that the Board of Managem<strong>en</strong>t of Talanx AG is<br />
kept continuously informed of risks and can interv<strong>en</strong>e as necessary<br />
to take controlling action; the Supervisory Board is also regularly<br />
advised of the risk situation. Material changes in the risk position<br />
are to be <strong>report</strong>ed to the Board of Managem<strong>en</strong>t of Talanx AG on an<br />
ad hoc basis.<br />
The pot<strong>en</strong>tial implications of risks are not only to be docum<strong>en</strong>ted<br />
but must also be incorporated into the <strong>annual</strong> planning of the<br />
Group companies, thereby making it possible to allow for the risks<br />
of future developm<strong>en</strong>t and to take appropriate countermeasures in<br />
a timely manner. The plans drawn up by all Group companies and<br />
the Group as a whole are discussed and approved by the Board of<br />
Managem<strong>en</strong>t and Supervisory Board of Talanx AG. Talanx AG draws<br />
up its own results planning on this basis. The purpose of this planning<br />
process is to make allowance not only for future developm<strong>en</strong>ts<br />
but also for the interdep<strong>en</strong>d<strong>en</strong>cies betwe<strong>en</strong> the planning of each<br />
subsidiary and that of Talanx AG. In the context of the performance<br />
managem<strong>en</strong>t cycle both operational and strategic considerations<br />
are factored into the planning.<br />
Our decision-making and monitoring processes serve not only to<br />
satisfy the ext<strong>en</strong>sive requirem<strong>en</strong>ts placed on <strong>report</strong>ing and information<br />
systems by the Insurance Supervision Act (VAG); rather, they<br />
also ext<strong>en</strong>d to the preparation and examination of the <strong>annual</strong> and<br />
consolidated financial statem<strong>en</strong>ts, the internal control system and<br />
the use of planning and controlling tools.<br />
Markets and<br />
g<strong>en</strong>eral conditions<br />
Business<br />
developm<strong>en</strong>t<br />
Assets and<br />
financial position<br />
In the year under review our risk managem<strong>en</strong>t activities in the<br />
area of primary insurance were assessed as “adequate with positive<br />
tr<strong>en</strong>d” by Standard & Poor’s. Hannover Re’s risk managem<strong>en</strong>t was<br />
assessed as “strong” by S&P.<br />
In 2009 and 2010, Talanx Asset Managem<strong>en</strong>t and AmpegaGerling<br />
Investm<strong>en</strong>t GmbH were certified to US standard SAS 70 (“Statem<strong>en</strong>t<br />
on Auditing Standards No 70”). Certification attests to an adequately<br />
configurated control system and effective implem<strong>en</strong>tation of the<br />
controls. In <strong>2011</strong>, the SAS 70 audit was replaced by an audit pursuant<br />
to the international standard ISAE 3402.<br />
Internal control and risk managem<strong>en</strong>t system<br />
in the context of financial <strong>report</strong>ing<br />
The hallmark of risk managem<strong>en</strong>t within the Talanx Group is its<br />
dec<strong>en</strong>tralised organisational structure. Responsibilities are split<br />
betwe<strong>en</strong> local risk managem<strong>en</strong>t at the level of the divisions and<br />
c<strong>en</strong>tral risk managem<strong>en</strong>t at the Group level.<br />
The sali<strong>en</strong>t features of the internal control system (ICS) and risk<br />
managem<strong>en</strong>t system implem<strong>en</strong>ted at Talanx AG with regard to the<br />
Group financial <strong>report</strong>ing process can be described as follows:<br />
There is a clear managem<strong>en</strong>t and corporate structure. Key<br />
functions that span multiple areas are managed c<strong>en</strong>trally.<br />
The functions of the main areas involved in the financial <strong>report</strong>ing<br />
process – Finance and Accounting – and those of Controlling<br />
are clearly separated. Areas of responsibility are unambiguously<br />
assigned (separation of functions).<br />
The financial systems used are protected against unauthorised<br />
access by appropriate measures on the IT side. Where possible,<br />
the systems concerned run on standard software.<br />
An adequate system of guidelines (e.g. on recognition and measurem<strong>en</strong>t<br />
of assets and liabilities, work procedures) has be<strong>en</strong> set<br />
up and is constantly updated.<br />
The departm<strong>en</strong>ts and units involved in the financial <strong>report</strong>ing<br />
process have the appropriate quantitative and qualitative<br />
resources at their disposal.<br />
Controls have be<strong>en</strong> implem<strong>en</strong>ted in the financial <strong>report</strong>ing<br />
processes and workflows: bookkeeping data that is received or<br />
forwarded is checked for complet<strong>en</strong>ess and correctness by the<br />
responsible members of staff. The peer-review principle is consist<strong>en</strong>tly<br />
applied. In addition, programmed plausibility checks<br />
are run using database-supported software.