talanx group annual report 2011 en

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210 Financial statements Notes General information Talanx Group. Annual Report 2011 Accounting principles and policies The CGUs of the Group are therefore as follows: Industrial Lines business segment Retail Germany business segment Non-Life Reinsurance business segment Life/Health Reinsurance business segment Segment reporting Consolidation, business combinations The CGUs of the Retail International segment are as follows: Brazil Poland Chile Argentina/Uruguay Non-current assets held for sale and disposal groups EUR 93 million of the goodwill resulting from the acquisition of Nassau Verzekering Maatschappij N. V., Rotterdam, was allocated to the “Industrial Lines” CGU, while EUR 11 million of this goodwill was allocated to the “Retail Germany” CGU. In the Retail International segment, the goodwill resulting from the acquisition of the Saint Honoré Iberia SL holding, Madrid, and its subsidiaries (EUR 5 million) was allocated to the “Argentina/Uruguay” CGU. The goodwill resulting from the purchase of shares in Integra Insurance Solutions Ltd., Bradford, was allocated in full to the “Non-Life Reinsurance” CGU. The disposal of EUR 5 million resulted from the sale of HDI-Gerling Rechtsschutz Versicherung AG, Hannover, which is part of the “Retail Germany” CGU (please see our remarks in the section “Consolidation”, subsection “Acquisitions and disposals of fully consolidated subsidiaries as well as further corporate changes”). The goodwill is allocated as follows to the segments subject to mandatory reporting: Industrial Lines Retail Germany Retail International Non-life Reinsurance Total Figures in EUR million Balance at 31.12.2009 60 397 128 8 593 Currency translation at 1.1.2010 Balance after currency translation — — 13 — 13 at 1.1.2010 60 397 141 8 606 Impairments — — 17 — 17 Balance at 31.12.2010 60 397 124 8 589 Currency translation at 1.1.2011 Balance after currency translation — — –11 — –11 at 1.1.2011 60 397 113 8 578 Change in consolidated group 93 11 5 7 116 Disposals — –5 — — –5 Impairments — — — — — Currency exchange rate differences — — — 1 1 Balance at 31.12.2011 153 403 118 16 690
Nature of risks Notes on the balance sheet – assets Notes on the balance sheet – liabilities Notes on the statement of income Other information List of shareholdings The Group runs the impairment test on goodwill in the fourth quarter of each year based on data gathered up to and including 30 September of that year. In order to establish whether an impairment expense needs to be recognised, the carrying value of the CGU including its allocated goodwill is compared with its recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and the value in use. For all CGUs with the exception of the two reinsurance segments, the recoverable amount is established on the basis of the value in use – which is calculated by the Group using a recognised measurement method, namely the discounted cash flow method. Insofar as CGUs are composed of more than one Group company, a sum-of-the-parts approach is used. When it comes to measuring the value of the property/casualty insurers in the CGUs of Industrial Lines, Retail Germany and Retail International, the point of departure for establishing the present value of future cash flows consists of planned income statements approved by the management of the companies concerned. The planning calculations are drawn up on a stand-alone basis assuming that the entity will continue with a generally unchanged concept; they record the post-tax net income of the five subsequent years as well as an extrapolation of the sixth year as a perpetuity factor. Entity-specific approximations are made in the detailed planning (at the time of the planning). In particular, the possibilities for growth in the market environment as well as profitability according to the claims and cost trend are estimated in the context of planned measures on the company level. Investment income is projected in relation to the specific asset portfolio. The discount factor (capitalisation rate) for the Group companies consists of a risk-free basic interest rate, countryspecific yield curves, a market risk premium and an individual company beta factor (calculated on the basis of the Capital Asset Pricing Model). What is more, in order to extrapolate the cash flows beyond the period of the detailed planning we also use – on the basis of conservative assumptions – constant growth rates. The figures are arrived at from past experience and future expectations, and do not exceed the longterm average growth rates for the various markets in which the entities operate. Present values determined in local currency are translated at the exchange rate on the balance sheet date. The current capitalisation rate and the longterm growth rate are listed below for the property/ casualty insurers of the CGUs: CGU Capitalisation rate Longterm growth rate In % In % Industrial Lines German-speaking countries 8.5 – 9.0 0.0 – 0.5 Other countries (EU only) 8.5 – 10.0 0.0 – 0.5 Retail Germany 8.5 – 11.5 1) 0.0 – 0.5 Retail International Brazil 15.0 1.0 Poland 10.3 1.0 Chile 11.25 0.5 Argentina/Uruguay 19.0 (ARS); 10.0 (UYU) 1.0 1) Capitalisation rate 11.5% for the period after the end of the current bancassurance cooperation Talanx Group. Annual Report 2011 211
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Group Annual Report 2011 Straightfo
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.� ,� �.� �,� Non-Life
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OuR VISION Talanx is the leading gl
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Our brands HDI-Gerling focuses part
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By contrast with the technical acco
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Dr. Heinz-Peter Roß Torsten Leue D
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Supervisory Board Committees Compos
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A further focus of our deliberation
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The annual financial statements are
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You can stand and work better on a
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Re-launch with a modern and efficie
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Forward together with a goal-orient
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under its own power and through acq
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Our targets: ambitious, but achieva
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Our premium volume has risen steadi
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Our target: to be fit for the futur
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Group management report. Detailed i
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Overall assessment of the economic
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Nature of risks Notes on the consol
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Nature of risks Notes on the balanc
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Our Locations Argentina L’UNION d
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Italy Hannover Re Services Italy S.
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Glossary. A-C Accumulation risk Und
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L-P Lapse rate for life insurance p
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Index of key terms Acquisitions Cen
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ie Ireland. Hannover Life Re (Irela
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talanx group annual report 2011 en

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