talanx group annual report 2011 en

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