talanx group annual report 2011 en

Glossary. A–C
Accumulation risk
Underwriting risk that a single trigger
event (e.g. an earthquake or hurricane)
can lead to an accumulation of claims
within a > portfolio.
Acquisition costs
Costs incurred by an insurance company
when insurance policies are taken out or
renewed (e.g. new business commission,
costs of proposal assessment or underwriting).
Acquisition costs (life) as a percentage of
premium income from new business
(Net) cost of acquiring new business in proportion
to the premium income obtained
from that business.
Acquisition cost ratio
gross: cost (gross) of acquiring new business
in proportion to the premiums earned, including
savings elements under unit-linked life/
annuity insurance.
a) net: cost (net) of acquiring new business
in proportion to the premiums earned, not
including savings elements under unitlinked
life/annuity insurance.
Administrative expenses
Costs of current administration connected
with the production of insurance coverage.
Administrative expense ratio
a) gross: cost (gross) of running in-force
business in proportion to the premiums
earned, including savings elements under
unit-linked life/annuity insurance.
b) net: cost (net) of running in-force busi ness
in proportion to the premiums earned, not
including savings elements under unitlinked
life/annuity insurance.
Annual Premium Equivalent – APE
Industry standard for measuring new
business income in life insurance.
Asset management
Supervision and management of investments
according to risk and return considerations.
Associated company
Company included in the consolidated
financial statement not through full or proportionate
consolidation but normally using
the > equity method and over whose business
or company policy a company included
in the consolidated financial statement
exerts a significant influence.
Bancassurance
Partnership between a bank/postal service
partner and an insurance company for
the purpose of selling insurance products
through the banking/postal service partner’s
branches. The linkage between insurer and
bank often takes the form of a capital participation
or a longterm strategic cooperation
between the two partners.
Benefit reserve
Value arrived at using mathematical
methods for future liabilities (present value
of future liabilities minus present value of
future incoming premiums), especially in life
and health insurance.
Cash flow statement
Statement on the origin and utilisation
of cash and cash equivalents during the
accounting period. It shows the changes in
liquid funds separated into cash flows from
operating, investing and financing activities.
Catastrophe bond (also: cat bond)
Instrument used to transfer catastrophe
risks of a (re)insurer to the capital market.
Cedant (also: ceding company)
Primary insurer or reinsurer that passes
on (cedes) shares of its insured risks to a
reinsurer in exchange for a premium.
Claims equalisation reserve
> equalisation reserve
Talanx Group. Annual Report 2011
Coinsurance funds withheld treaty
Type of coinsurance contract where the
ceding company retains a portion of the
original premium at least equal to the
ceded reserves.
Combined ratio
Sum of the > loss ratio and > expense ratio
(net) after allowance for interest income on
funds withheld and contract deposits, as a
proportion of net premiums earned. In the
calculation of the adjusted combined ratio,
the interest income on funds withheld and
contract deposits is offset against the losses
and loss adjustment expenses. This ratio is
used by both property/casualty insurers and
non-life reinsurers.
Commission
Remuneration paid by a primary insurer to
agents, brokers and other professional intermediaries.
Compliance
Statutory regulations and undertakingspecific
rules governing the responsible and
lawful actions of an undertaking and its
employees.
Consolidation
In accounting practice: combining of the
individual financial statements of several
companies belonging to one group into
a consolidated financial statement. In so
doing, internal transactions within the
group are eliminated.
Corporate Governance
System that serves to ensure responsible
management and supervision of enterprises
and is intended to foster the trust of investors,
clients, employees and the general
public in companies.
Credit status
Also creditworthiness. Ability of a debtor to
meet its payment commit ments.
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