talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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Nature of risks Notes on the balance<br />
sheet – assets<br />
Notes on the balance<br />
sheet – liabilities<br />
Notes on the<br />
statem<strong>en</strong>t of income<br />
Other information List of shareholdings<br />
The focus of the Talanx Group’s business activities is on the sale and administration of insurance<br />
products in all standard lines of property/casualty and life insurance in both primary and reinsurance<br />
business.<br />
Risks from insurance contracts<br />
Risks from insurance contracts consist principally of insurance risks, default risks, liquidity risks and<br />
market risks. Insurance risks in property/casualty insurance are considered separately from those in<br />
life insurance because of the significant differ<strong>en</strong>ces betwe<strong>en</strong> them.<br />
Managem<strong>en</strong>t of technical risks in property/casualty insurance<br />
Insurance risks in non-life business (primary insurance and reinsurance) derive primarily from the<br />
premium/loss risk and the reserving risk.<br />
Insurance business is based upon taking on individual risks from policyholders (in primary insurance)<br />
or cedants (in reinsurance) and spreading these risks over the community of (re)insureds and<br />
over time. For the insurer, the fundam<strong>en</strong>tal risk lies in providing insurance b<strong>en</strong>efits, the amount<br />
and due date of which are unknown, from premiums that are calculated in advance and cannot be<br />
changed. The reserving risk refers to the possibility of the reserves set up on the balance sheet proving<br />
insuffici<strong>en</strong>t and having to be boosted to the detrim<strong>en</strong>t of the technical result.<br />
We counter the premium/loss risk by taking out appropriate reinsurance. The volume of reinsurance<br />
cover relative to the gross writt<strong>en</strong> premium is measured by the retained premium ratio;<br />
shown below brok<strong>en</strong> down by segm<strong>en</strong>ts; this indicates the proportion of writt<strong>en</strong> risks retained for<br />
our own account.<br />
Ret<strong>en</strong>tion by segm<strong>en</strong>ts <strong>2011</strong> 2010 2009<br />
In %<br />
Industrial Lines 44.1 46.1 43.7<br />
Retail Germany 92.9 91.6 85.6<br />
Retail International 88.7 92.4 86.9<br />
Non-Life Reinsurance 91.3 88.9 94.1<br />
Total non-life insurance 79.8 78.9 78.7<br />
The ret<strong>en</strong>tion ratios in non-life insurance at Group level remained roughly on a par with the previous<br />
year, at 79.8% compared to 78.9%. The ret<strong>en</strong>tion ratio in the Industrial Lines segm<strong>en</strong>t dropped,<br />
mainly because of the change to disclosure of the reinstatem<strong>en</strong>t premium among the reinsurance<br />
premiums.<br />
The net loss ratio in the segm<strong>en</strong>ts developed as follows in a year-on-year comparison:<br />
Loss ratio by segm<strong>en</strong>ts <strong>2011</strong> 2010 2009<br />
In %<br />
Industrial Lines 66.8 82.0 68.6<br />
Retail Germany 67.5 69.4 62.5<br />
Retail International 70.5 75.6 71.6<br />
Non-Life Reinsurance 78.8 72.0 72.8<br />
Total non-life insurance 74.5 73.6 70.5<br />
Talanx Group. Annual Report <strong>2011</strong><br />
187