talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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112<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 />
Other risks also <strong>en</strong>compass Talanx AG’s participation risks,<br />
especially those associated with the performance of subsidiaries,<br />
the stability of results in our portfolio of participating interests<br />
and a pot<strong>en</strong>tially inadequate balance in the business. Talanx AG<br />
participates directly in the business developm<strong>en</strong>t and risks of its<br />
subsidiaries through profit transfer agreem<strong>en</strong>ts and divid<strong>en</strong>d paym<strong>en</strong>ts.<br />
Negative results tr<strong>en</strong>ds at the subsidiaries may also make<br />
it necessary to write down the values of participating interests on<br />
Talanx AG’s books.<br />
The Group uses appropriate tools in the areas of controlling, internal<br />
auditing and risk managem<strong>en</strong>t to counter risks arising out of<br />
the developm<strong>en</strong>t of results at subsidiaries. A standardised <strong>report</strong>ing<br />
system regularly provides decision-makers with the latest information<br />
about the Group and business tr<strong>en</strong>ds at all major subsidiaries,<br />
<strong>en</strong>abling them to interv<strong>en</strong>e at any time to control risks. Risks associated<br />
with a lack of stability in the results of the portfolio of participating<br />
interests or with an inadequate business balance are reduced<br />
for the various risk sources primarily by means of segm<strong>en</strong>tal and<br />
regional diversification, appropriate strategies for risk minimisation<br />
and risk shifting, and by investing systematically in growth markets<br />
and in product and portfolio segm<strong>en</strong>ts that stabilise results.<br />
The risk of asset erosion or inadequate profitability of acquisitions<br />
is kept as low as possible through int<strong>en</strong>sive due dilig<strong>en</strong>ce checks<br />
conducted in cooperation with indep<strong>en</strong>d<strong>en</strong>t professional consultants<br />
and auditors and by closely monitoring their business developm<strong>en</strong>t.<br />
Furthermore, Talanx pays close att<strong>en</strong>tion to risks deriving<br />
from the financing of acquisitions and those associated with the<br />
capital needs of subsidiaries and keeps track of their anticipated<br />
profitability. It counters the financing risk by regularly updating<br />
cash flow calculations and forecasts and by defining priorities for<br />
the allocation of funds.<br />
Markets and<br />
g<strong>en</strong>eral conditions<br />
Business<br />
developm<strong>en</strong>t<br />
Forecast and<br />
opportunities <strong>report</strong><br />
Assets and<br />
financial position<br />
The following remarks about the expected developm<strong>en</strong>t of the<br />
Talanx Group and its member companies are based on wellfounded<br />
assessm<strong>en</strong>ts by external experts and on in-house plans<br />
and forecasts that we consider logically consist<strong>en</strong>t; nevertheless,<br />
they are our own subjective assessm<strong>en</strong>ts. Although we arrived at<br />
the underlying assumptions with great dilig<strong>en</strong>ce and to the best<br />
of our knowledge, the fundam<strong>en</strong>tal uncertainties applicable to all<br />
statem<strong>en</strong>ts regarding the future, and particularly as regards future<br />
developm<strong>en</strong>ts on the capital markets, natural catastrophes and<br />
the legal <strong>en</strong>vironm<strong>en</strong>t, make it impossible to rule out that actual<br />
ev<strong>en</strong>ts may diverge from the developm<strong>en</strong>ts anticipated here. The<br />
uncertainties inher<strong>en</strong>t in any forecasting have be<strong>en</strong> aggravated<br />
still further by the global intermeshing of economic relations and<br />
capital markets. The effects of the financial and economic crisis that<br />
have already made themselves felt in the year under review will, in<br />
our opinion, continue to reverberate in the insurance industry in<br />
the years ahead.<br />
Economic <strong>en</strong>vironm<strong>en</strong>t<br />
We consider a further slowdown in the pace of growth in the developed<br />
countries, such as was already becoming appar<strong>en</strong>t in the last<br />
quarter of <strong>2011</strong>, to be possible in the curr<strong>en</strong>t year, too. We regard<br />
the economic <strong>en</strong>vironm<strong>en</strong>t, especially in the Eurozone, as critical<br />
in 2012. As the resources of both fiscal and monetary policy appear<br />
to be approaching exhaustion, it may well prove more difficult in<br />
future to revive the economy by means of stimulus packages or<br />
lowering interest rates. The labour markets in the countries on the<br />
Eurozone periphery are likely to remain under pressure due to austerity<br />
measures. Whether the USA manages to extricate itself from<br />
this tr<strong>en</strong>d, against the background of a slowdown in growth in the<br />
emerging countries, remains to be se<strong>en</strong>.<br />
Giv<strong>en</strong> the global cool-down, we do not see prices coming under<br />
pressure despite ongoing monetary-policy interv<strong>en</strong>tions. All in all,<br />
the wors<strong>en</strong>ing European sovereign debt and banking crisis (including<br />
the <strong>en</strong>suing recapitalisation requirem<strong>en</strong>ts) and the debate<br />
about the disintegration of the Eurozone are likely to remain the<br />
major risk factors in 2012. Whether the emerging countries can<br />
continue to have the same stabilising effect as in the past appears<br />
doubtful.