talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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64<br />
The Talanx Group Strategy Enterprise<br />
managem<strong>en</strong>t<br />
Talanx Group. Annual Report <strong>2011</strong><br />
Research and<br />
developm<strong>en</strong>t<br />
The amortisation to be tak<strong>en</strong> on acquired insurance portfolios<br />
produces a charge to net income, to the ext<strong>en</strong>t that it is attributable<br />
to the shareholders’ portion, of EUR 58 (152) million. The recognised<br />
insurance-related assets – in relation to the policyholders’ share –<br />
are opposed by corresponding provisions for premium refunds.<br />
The balance sheet item “Technical provisions in the area of life<br />
insurance insofar as the investm<strong>en</strong>t risk is borne by policyholders”<br />
fell by EUR 347 million in step with the decrease in the item “Investm<strong>en</strong>ts<br />
for the account and risk of holders of life insurance policies”,<br />
which is comprised of the investm<strong>en</strong>ts relating to unit-linked insurance<br />
products. In the case of these life insurance products, under<br />
which policyholders themselves carry the investm<strong>en</strong>t risk, the technical<br />
liabilities reflect the fair values of the corresponding assets.<br />
In addition to the sale of the insurance portfolios of PB P<strong>en</strong>sionskasse<br />
AG, Hild<strong>en</strong>, (Retail Germany segm<strong>en</strong>t) and HDI Seguros S. A.<br />
de C. V., León, (Mexico) (Retail International segm<strong>en</strong>t), the sale of<br />
PARTNER OFFICE AG (Retail Germany segm<strong>en</strong>t) and the scheduled<br />
sale of ASPECTA Assurance International AG, Vaduz (Liecht<strong>en</strong>stein)<br />
(Retail International segm<strong>en</strong>t) are also recognised under the item<br />
“Non-curr<strong>en</strong>t assets and assets of disposal <strong>group</strong>s classified as held<br />
for sale”. It is highly likely that all of the above sales transactions<br />
will be concluded within one year. In the previous year, the sale of<br />
the operating companies of Clar<strong>en</strong>don Insurance Group, Inc. (CIGI),<br />
Wilmington (Non-Life Reinsurance segm<strong>en</strong>t) scheduled for the year<br />
under review was recognised under this item. An overall pres<strong>en</strong>tation<br />
of these procedures and of the assets classified as held for sale<br />
during the year and disposal <strong>group</strong>s can be found in the subsection<br />
of the Notes <strong>en</strong>titled “Non-curr<strong>en</strong>t assets held for sale and disposal<br />
<strong>group</strong>s.<br />
Asset managem<strong>en</strong>t and objectives<br />
Group assets are managed according to the fundam<strong>en</strong>tal principle<br />
of perpetual growth and performance. A systematic and disciplined<br />
investm<strong>en</strong>t process <strong>en</strong>sures consist<strong>en</strong>cy and sustainability of results.<br />
In this context, strategic and tactical asset allocation is a main focus<br />
of our efforts. In addition to regulations governing Group risk, and<br />
the g<strong>en</strong>eral legal framework, asset allocation also takes full account<br />
of the requirem<strong>en</strong>ts of the respective business models. Mapping<br />
of the liabilities side of the balance sheet in the form of a cashflowand<br />
curr<strong>en</strong>cy structure, duration matching, and the fulfillm<strong>en</strong>t of<br />
specific requirem<strong>en</strong>ts with regard to cash holding are all factors<br />
which exert a key influ<strong>en</strong>ce on asset allocation and, thus, also on the<br />
risk-weighted return of our portfolios.<br />
Markets and<br />
g<strong>en</strong>eral conditions<br />
Business<br />
developm<strong>en</strong>t<br />
Assets and<br />
financial position<br />
Moreover, the forthcoming <strong>en</strong>actm<strong>en</strong>t of Solv<strong>en</strong>cy II is exerting an<br />
ever greater influ<strong>en</strong>ce on the way in which the Group manages its<br />
assets. Thus, derivative financial instrum<strong>en</strong>ts are increasingly being<br />
used in connection with e.g. life insurance companies in the Retail<br />
Germany segm<strong>en</strong>t in order to secure satisfactory returns in the<br />
future, and to make a positive contribution to meeting Solv<strong>en</strong>cy II<br />
criteria. In addition, durations have be<strong>en</strong> increased successively<br />
in order to harmonise the Group’s liability/asset profile. The high<br />
ratings quality of the invested assets in the respective portfolios has<br />
always be<strong>en</strong> maintained.<br />
Although numerous rating downgrades left their mark on <strong>2011</strong>,<br />
more than 86% of instrum<strong>en</strong>ts in the asset category of fixedincome<br />
securities are rated “A” or better. A broad-based system<br />
designed to limit accumulation risks results in a balanced mix of<br />
assets, the risk-reducing aspects of which have prov<strong>en</strong> their worth<br />
during the Eurozone crisis, too.<br />
Asset risk managem<strong>en</strong>t is embedded in the Group system of limits<br />
and thresholds, which itself is derived from the Group’s holistic risk<br />
managem<strong>en</strong>t concept. The goal here is to deploy asset allocation in<br />
order to achieve the best possible returns without jeopardising the<br />
risk budget which must be adhered to at all times.<br />
Numerous instrum<strong>en</strong>ts are deployed in order to measure and<br />
monitor key risks compreh<strong>en</strong>sively and continuously. They include<br />
stress tests, value-at-risk calculations, and the daily monitoring of<br />
limits, e.g. in respect of accumulation risks. With the aid of instrum<strong>en</strong>ts<br />
such as these, it has be<strong>en</strong> possible ev<strong>en</strong> in times of crisis to<br />
manage the corresponding risks and to tailor portfolios accordingly.<br />
It would be accurate to say that the Talanx Group pursues a conservative<br />
investm<strong>en</strong>t policy.<br />
Talanx Asset Managem<strong>en</strong>t GmbH functions as a c<strong>en</strong>tral interface<br />
for risk measurem<strong>en</strong>t and risk controlling in relation to the<br />
Group’s investm<strong>en</strong>ts. In this way, Group units acquired or newly<br />
established in the context of the strategic corporate objectives are<br />
also promptly integrated into the systems of Talanx Asset Manage-