talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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32<br />
The Talanx Group Strategy Enterprise<br />
managem<strong>en</strong>t<br />
Strategy<br />
Talanx Group. Annual Report <strong>2011</strong><br />
Research and<br />
developm<strong>en</strong>t<br />
The Talanx Group is internationally active in primary insurance<br />
and reinsurance and in both property/casualty and life business.<br />
In the more than 100 years of our history we have evolved from<br />
a single-line liability insurer for industry into a global insurance<br />
<strong>group</strong> with a focus on the industrial and retail lines and reinsurance<br />
business. We attach particular importance to successful cooperation<br />
with professional partners. In the Talanx Group, we optimise the<br />
interplay of insurance and reinsurance as an integral compon<strong>en</strong>t<br />
of our business model with the aim of consist<strong>en</strong>tly <strong>en</strong>hancing<br />
our opportunity/risk profile and improving capital effici<strong>en</strong>cy. The<br />
composition of the Group’s portfolio <strong>en</strong>sures that, ev<strong>en</strong> in difficult<br />
market phases, our Group has suffici<strong>en</strong>t indep<strong>en</strong>d<strong>en</strong>t risk capacities<br />
at its disposal to support its cli<strong>en</strong>ts reliably and over the long<br />
term and to tap into promising markets. Through this approach<br />
we safeguard our indep<strong>en</strong>d<strong>en</strong>ce and can sustainably <strong>en</strong>hance the<br />
success of the Group to the b<strong>en</strong>efit of our investors, cli<strong>en</strong>ts, staff and<br />
other stakeholders.<br />
The Group is headed by Talanx AG as a financial and managem<strong>en</strong>t<br />
holding company. Its remit is to make sure that we achieve our<br />
primary objective: sustainable, profitable growth. This is also the<br />
guiding principle for all divisional strategies deriving from the<br />
Group strategy. The Talanx Group’s organisation is geared towards<br />
c<strong>en</strong>tralising the Group steering and service functions while delegating<br />
responsibility for profit to the divisions. This organisational<br />
structure, which accords the individual divisions a high level of<br />
<strong>en</strong>trepr<strong>en</strong>eurial freedom and responsibility, is key to the success<br />
<strong>en</strong>joyed by the Talanx Group, as it <strong>en</strong>ables the various units to take<br />
maximum advantage of their growth and profit opportunities.<br />
While the Talanx brand is ori<strong>en</strong>ted primarily towards the capital<br />
market, on the operating side our sound international product<br />
expertise, our forward-looking underwriting policy and our strong<br />
distribution resources are reflected in a multi-brand strategy. This<br />
<strong>en</strong>ables us to optimally align ourselves to the needs of differ<strong>en</strong>t<br />
cli<strong>en</strong>t <strong>group</strong>s, regions and cooperation partners. Moreover, it facilitates<br />
the effici<strong>en</strong>t integration of new companies and/or business<br />
sectors into the Group. This structure also promotes highly developed<br />
cooperation skills which can be harmonised with a diverse<br />
range of partners and business models.<br />
Lean, effici<strong>en</strong>t and standardised business processes combined with<br />
a state-of-the-art and uniform IT structure are further key success<br />
factors in the context of Group strategy.<br />
Markets and<br />
g<strong>en</strong>eral conditions<br />
Business<br />
developm<strong>en</strong>t<br />
Strategic objectives of Talanx<br />
Assets and<br />
financial position<br />
The Group’s policies and primary strategic objectives are focused<br />
on reliable continuity, financial str<strong>en</strong>gth and sustainable profitable<br />
growth and are thus geared towards longterm value creation.<br />
This guiding principle is the basis for all other corporate goals. An<br />
ess<strong>en</strong>tial prerequisite for achieving these aims is a soundly capitalised<br />
Talanx Group which provides its cli<strong>en</strong>ts with effective cover<br />
for their risks. By giving that assurance we serve the interests of our<br />
shareholders, cli<strong>en</strong>ts, staff and other stakeholders and create the<br />
greatest possible b<strong>en</strong>efit for all concerned.<br />
Our strategy for human resources managem<strong>en</strong>t is described at<br />
l<strong>en</strong>gth in the section “Non-financial performance indicators," pages<br />
82 et seqq., while our risk managem<strong>en</strong>t approach is described in the<br />
“Risk <strong>report</strong>,” pages 100 et seqq. These two aspects are therefore not<br />
discussed further at this point.<br />
Profit target<br />
The Talanx Group strives for longterm, above-average profitability,<br />
measured in terms of our return on equity under IFRS and in a comparison<br />
with Europe’s 20 largest insurance <strong>group</strong>s. Our minimum<br />
target for Group net profit after tax and minorities is an IFRS return<br />
on equity 750 basis points in excess of the average risk-free interest<br />
rate. This is defined as the average market rate over the past five<br />
years for 10-year German governm<strong>en</strong>t bonds.<br />
From this profit target we derive the b<strong>en</strong>chmarks we use to steer<br />
the operative divisions. Talanx AG makes sure that the sum of the<br />
profit targets of the individual divisions is at least equal to the<br />
Group’s defined return on equity.<br />
Capital managem<strong>en</strong>t<br />
Capital managem<strong>en</strong>t at the Talanx Group aims to <strong>en</strong>sure an optimised<br />
risk-comm<strong>en</strong>surate capital structure in order to reinforce the<br />
Group’s financial str<strong>en</strong>gth.<br />
This is achieved in two ways: firstly, we optimise our capital<br />
structure by using appropriate equity substitutes and financing<br />
instrum<strong>en</strong>ts; secondly, we align our equity resources such that they<br />
meet at least the requirem<strong>en</strong>ts of Standard & Poor’s capital model<br />
for an AA rating. Equity resources in excess of this requirem<strong>en</strong>t are<br />
established only if they <strong>en</strong>able us to boost our earnings pot<strong>en</strong>tial<br />
above and beyond the return we would gain from reinvested funds,<br />
e.g. through providing additional risk capacity and cover or through<br />
achieving greater indep<strong>en</strong>d<strong>en</strong>ce from the reinsurance and retrocession<br />
markets.