talanx group annual report 2011 en

L–P
Lapse rate for life insurance products
Sum of cancelled policies and other premature
withdrawals in relation to the average
business in force (GDV index).
Letter of credit – LoC
Bank guarantee. In the united States, for
example, a common way of furnishing collateral
in reinsurance business.
Life/health insurance
Lines of business concerned with the insurance
of persons, i.e. life, annuity, health and
personal accident.
Life insurance
Collective term covering those types of
insurance which are concerned in a broader
sense with risks associated with the
uncertainties of life expectancy and life
planning. These include death and disability,
retirement provision as well as marriage and
education.
Loss ratio
Net loss ratio shown in the balance sheet:
percentage ratio of claims expenditure (net)
including other technical income (net), but
excluding any consolidation differences for
technical items – including amortisation of
the shareholders' portion of the PVFP – to net
premium earned. > Present value of future
profits
Loss ratio for property/casualty insurance
products
a) gross: sum of the (gross) losses and loss
adjustment expenses and the (gross) other
technical result as a proportion of gross
premiums earned.
b) net: sum of the (net) losses and loss
adjustment expenses and the (net) other
technical result as a proportion of net premiums
earned.
Major claim (also: major loss)
Claim that reaches an exceptional amount
compared to the average claim for the risk
group in question and exceeds a defined
claims amount.
Matching currency cover
Coverage of technical liabilities in foreign
currencies by means of corresponding
investments in the same currency in order
to avoid exchange-rate risks.
Modified coinsurance (ModCo) treaty
Type of reinsurance treaty where the ceding
company retains the assets supporting the
reinsured reserves by withholding a fund,
thereby creating an obligation to render
payments to the reinsurer at a later date.
Morbidity
Incidence rate of disease relative to a given
population group.
Mortality
Proportion of the total population dying
within a given time interval.
Net
In insurance: used primarily to mean after
deduction of reinsurance.
Net return on investments
Investment earnings, not including interest
income on funds withheld and contract
deposits, in relation to the average investments
under own management.
Non-proportional reinsurance
Reinsurance treaty under which the reinsurer
assumes the loss expenditure or sum
insured in excess of a defined amount.
Operating profit (EBIT)
Sum of the result of non-underwriting business
and the underwriting result before the
change (allocation or withdrawal) in the
(claims) equalisation reserve.
OTC
Over the counter. In the case of securities:
not traded on a stock exchange.
Passive reinsurance
Existing reinsurance programmes of primary
insurers for their own protection against
underwriting risks.
Personal lines
> Life/health insurance
Policyholders’ surplus
Total amount of shareholders’ equity excluding
non-controlling interests, which is
comprised of the common shares, additional
paid-in capital, retained earnings and cumulative
other comprehensive income, as well
as the non-controlling interests in shareholders’
equity and so-called hybrid capital, as
equity-replacing debt capital that encompasses
the subordinated liabilities.
Portfolio
a) All risks assumed by a primary insurer
or reinsurer as a totality or in a defined
segment.
b) Group of investments categorised
according to specific criteria.
Talanx Group. Annual Report 2011
Premiums
Agreed compensation for the risks accepted
by the insurer.
Present value of future profits – PVFP
Intangible asset primarily arising in particular
from the purchase of life and health
insurance companies or individual portfolios.
The present value of expected future
profits from the portfolio assumed is capitalised
and amortised according to schedule.
Impairments are taken on the basis of annual
impairment tests.
Primary (also: direct) insurer
Company which accepts risks in exchange
for an insurance premium and which has
a direct contractual relationship with the
policyholder (private individual, company,
organisation).
Private equity
Investment capital raised by private investors
in contrast to public equity, i.e. capital
raised on the stock exchange.
Projected benefit obligation
The present value of the earned portion of
commitments from a defined benefit obligation.
Property/casualty insurance
All insurance lines with the exception of life
insurance and health insurance: all lines in
which the insured event does not trigger
payment of an agreed fixed amount, but
rather the incurred loss is reimbursed.
Provision
Liability item as at the balance sheet date
to discharge obligations which exist but
whose extent and/or due date is/are not
known. Technical provisions, for example,
are for claims which have already occurred
but which have not yet been settled, or have
only been partially settled (= provision for
outstanding claims, abbreviated to: loss
reserve)
Purchase cost, amortised
Cost of acquiring an asset item including all
ancillary and incidental purchasing costs;
in the case of wasting assets less scheduled
and/or special amortisation.
PVFP
> Present value of future profits
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