talanx group annual report 2011 en

Overall assessment of
the economic situation
Non-financial
performance indicators
Corporate Governance Remuneration report Events of special
significance
In the United Kingdom we are one of the leading reinsurers for longevity
covers and a preferred business partner for private annuities
taken out by individuals with a reduced life expectancy – so-called
“enhanced annuities”. We also assume pension payment commitments
from large pension funds under portfolio acquisitions which
are normally limited to the part on which benefits are already being
paid.
Market position strengthened
In the year under review our business volume in some major
emerging markets showed gratifying growth. We expanded at an
extraordinary pace on the Eastern European markets. In Russia, particularly,
we were able to improve our market position significantly.
In South Africa we continue to show excellent performance in the
field of personal life insurance and offer our clients comprehensive
service, including assistance in direct marketing of insurance products.
On the Indian market our cooperation with the local company
GIC Re enabled us to substantially increase our market penetration.
We have reinforced our local presence on the Asian markets
in recent years. Here we were able to boost our business volume
considerably in the year under review: particularly in the Greater
China region (People’s Republic of China, Hong Kong and Taiwan),
we again achieved above-average growth. In the year under review
we also our stepped up our business in the Islamic countries such as
Bahrain, Saudi Arabia and the United Arab Emirates. In this region
we write shariah-compliant insurance via our subsidiary Hannover
ReTakaful in Manama/Bahrain.
Gratifying premium growth
The gross premium income booked in the year under review totalled
EUR 5.3 billion, an increase of 4% compared to the previous year’s
figure of EUR 5.1 billion. At constant exchange rates, growth would
have been 1 percentage point higher in this segment, too. Our net
retention dropped slightly to 91.0 (91.7)% at a net earned premium
of EUR 4.8 (4.7) billion.
The core of our business is in the life and annuity lines, i.e. in taking
on mortality and longevity risks. In the year under review, this
accounted for 89% of the segment’s premium income. Providing
cover for the morbidity biometric risk brought in 9% of our global
written premiums in the year under review. At 2%, accident business
made the smallest contribution to our premium income.
Risk report Forecast and
opportunities report
Results fall slightly short of expectations
All in all, we were able to post a net investment income of
EUR 512 (508) million.
The operating profit (EBIT) for the year under review totalled
EUR 225 (276) million. Financial solutions and bancassurance again
delivered an excellent performance, but despite the positive course
taken by insurance business overall, the result – and thus the EBIT
margin – in the segment as a whole fell slightly short of our expectations
because of the difficult situation on the international capital
markets.
Corporate Operations
The Corporate Operations segment comprises, in addition to
Talanx AG, the in-house service providers Talanx Service AG and
Talanx Systeme AG, the Talanx investment companies Talanx Asset
Management GmbH, AmpegaGerling Investment GmbH and Talanx
Immobilien Management GmbH, and the in-house reinsurance
broker Talanx Reinsurance Broker AG.
Investment specialists within the Talanx-Group
Talanx Asset Management GmbH – in cooperation with its subsidiary
AmpegaGerling Investment GmbH – is chiefly responsible for
handling the management and administration of the Group companies’
securities portfolios and provides related services such as
investment accounting and reporting. Following introduction of a
new Group fee model, the operating profit of all Talanx investment
companies dropped to EUR 33 (43) million.
As an investment company, AmpegaGerling Investment GmbH
administers public and special funds and performs financial portfolio
management tasks for institutional clients. The emphasis is on
portfolio management and the administration of investments for
clients outside the Group. The turnover situation in the investment
sector in 2011 was strongly influenced by the spreading financial
market crisis, which again intensified significantly due to the
unresolved debt crises in the US and Europe. As a result, according
to statistics by the German investment and asset management umbrella
organisation BVI, the funds under management experienced
outflows totalling EUR 13.4 billion, with the negative trend accelerating
towards the end of the year.
Talanx Group. Annual Report 2011
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