talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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Overall assessm<strong>en</strong>t of<br />
the economic situation<br />
Non-financial<br />
performance indicators<br />
Corporate Governance Remuneration <strong>report</strong> Ev<strong>en</strong>ts of special<br />
significance<br />
According to experts, life insurers’ return on equity in the international<br />
insurance markets has remained on or around the 12%<br />
mark since the beginning of 2010. As such, profitability remains<br />
below the pre-crisis level of 2007 and there are no signs that the 15%<br />
mark will be reached in the foreseeable future.<br />
Global premium income from conv<strong>en</strong>tional life reinsurance business<br />
fell in the year under review, this slump resulting in the main<br />
from the industrialised markets. A rise in premium income is still<br />
being predicted for the growth regions in the year under review.<br />
Nevertheless, the t<strong>en</strong> biggest life reinsurers succeeded in increasing<br />
net premium income by around 7% in the first nine months of the<br />
year alone, this gratifying developm<strong>en</strong>t being achieved mainly by<br />
company acquisitions.<br />
German insurance industry<br />
Developm<strong>en</strong>t of gross premium income in<br />
the individual insurance lines in Germany <strong>2011</strong> 1) 2010<br />
In % compared to previous year<br />
Property and casualty insurance +2.5 +0.9<br />
Life insurance −5.7 +6.0<br />
Private health insurance +4.9 +5.7<br />
Total −1.2 +4.4<br />
1) Provisional figures Source: GDV<br />
<strong>2011</strong> saw the financial and debt crisis <strong>en</strong>ter its fourth consecutive<br />
year. Thanks to their broadly diversified, longterm investm<strong>en</strong>t policies<br />
and only minor exposure to governm<strong>en</strong>t bonds from the socalled<br />
GIIPS countries, German insurers were largely able to absorb<br />
the negative impact of the crisis on business and cli<strong>en</strong>ts. Despite the<br />
crisis and signs throughout the year that the recovery was stalling<br />
again, business developm<strong>en</strong>t was satisfactory in our opinion. The<br />
slight fall in premium income recorded by all lines of business was<br />
mainly attributable to a normalisation of single-premium business<br />
in life insurance, which had experi<strong>en</strong>ced significant volume<br />
increases in the two preceding years. With a total premium volume<br />
of EUR 176.7 billion, the GDV <strong>report</strong>ed its second-highest figures of<br />
all time in <strong>2011</strong> for the German insurance industry. B<strong>en</strong>efits paid<br />
by primary insurers increased in the year under review on the back<br />
of an increase in the number of routinely maturing life policies,<br />
coupled with rising claims exp<strong>en</strong>diture in the property and casualty<br />
line of business.<br />
Risk <strong>report</strong> Forecast and<br />
opportunities <strong>report</strong><br />
Property and casualty insurance<br />
At around 2.5%, premium growth in the property and casualty line<br />
of insurance in the year under review was the biggest since 2003,<br />
continuing the upward tr<strong>en</strong>d of the previous year. This was mainly<br />
thanks to growth in premiums in motor insurance, which increased<br />
markedly in <strong>2011</strong>. Tariff increases were pushed through for both new<br />
and in-force business in this sector.<br />
All other lines of insurance are expected to show positive growth<br />
as well, with marine and credit insurance faring particularly well.<br />
Although, the industry recorded only a small perc<strong>en</strong>tage rise in<br />
claims exp<strong>en</strong>diture in the year under review, <strong>2011</strong> delivered the second-highest<br />
burd<strong>en</strong> of losses in absolute terms the industry has had<br />
to cope with since the River Elbe floods of 2002. The situation was<br />
compounded by key loss ev<strong>en</strong>ts such as the l<strong>en</strong>gthy frost period at<br />
the start of the year and two extreme weather fronts that arrived on<br />
the sc<strong>en</strong>e in August and September. Although relatively localised,<br />
they gave rise to an extremely high claims burd<strong>en</strong>. All told, with the<br />
positive effects of the growth in premium income outweighing the<br />
rise in claims exp<strong>en</strong>diture, the underwriting profit of property and<br />
casualty insurers actually grew again in <strong>2011</strong> for the first time in two<br />
years. According to the GDV, these results are likely to be reflected in<br />
a 1 perc<strong>en</strong>tage-point rise in the combined ratio.<br />
Life insurance<br />
All in all, the life insurance line of business returned to normal in<br />
the year under review. Against the backdrop of the financial and<br />
economic crisis, 2009 and 2010 had be<strong>en</strong> marked by an extreme<br />
tr<strong>en</strong>d towards single-premium business. This expansive developm<strong>en</strong>t<br />
was not maintained in <strong>2011</strong> – indeed, as expected in our<br />
opinion, it actually fell perceptibly. In contrast to single-premium<br />
business, new business with regular premium paym<strong>en</strong>ts – much<br />
more important for sustaining future growth in this class of insurance<br />
– grew by 8.1% to EUR 6.1 billion in <strong>2011</strong> following declines in<br />
the two preceding years. Thus, in terms of aggregate premiums –<br />
the b<strong>en</strong>chmark by which policies with regular premium paym<strong>en</strong>ts<br />
are weighted with their respective terms – new business grew by<br />
5.5% in total during the year under review. In contrast, total gross<br />
premium income in life insurance contracted by 4.8% in the year<br />
under review as a result of the tr<strong>en</strong>d toward single-premium business.<br />
Once again, the number of lapsed policies fell slightly, this<br />
despite the ongoing financial crisis.<br />
Talanx Group. Annual Report <strong>2011</strong><br />
41