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 />
m<strong>en</strong>t GmbH in order to <strong>en</strong>sure consist<strong>en</strong>t limit controlling across<br />
the Group. Overshoots and undershoots are flagged on a same-day<br />
basis, thereby facilitating the definition of measures to rectify limit<br />
violations without delay. In addition, thresholds are specified for<br />
key indicators, upon attainm<strong>en</strong>t of which steps can be tak<strong>en</strong> in a<br />
timely manner in order to prev<strong>en</strong>t a possible overstep of limits or<br />
jeopardising of targets at an early stage.<br />
Movem<strong>en</strong>ts in investm<strong>en</strong>ts<br />
Breakdown of the investm<strong>en</strong>t portfolio<br />
Figures in EUR million<br />
Funds held by ceding companies<br />
Assets under own managem<strong>en</strong>t<br />
1) Adjusted on the basis of IAS 8<br />
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The investm<strong>en</strong>t portfolio continued to grow in <strong>2011</strong>, on balance<br />
posting a rise of almost 5% to close the year at EUR 87.5 billion.<br />
This developm<strong>en</strong>t was the result of an increase in the funds held<br />
by ceding companies to EUR 11.7 billion (+6.9%), together with<br />
growth of 4.5% in the volume of assets under own managem<strong>en</strong>t<br />
to EUR 75.8 billion. Besides the company acquisitions made in the<br />
<strong>report</strong>ing period, the expansion of the portfolio of assets under<br />
own managem<strong>en</strong>t was largely due to cash inflows from underwriting<br />
business which were reinvested in accordance with corporate<br />
guidelines.<br />
Market developm<strong>en</strong>ts also resulted in changes in the portfolio. The<br />
second half of <strong>2011</strong>, in particular, saw interest rates fall significantly<br />
across all maturities and this was reflected in a corresponding<br />
increase in the fair values of our fixed-income investm<strong>en</strong>ts. With<br />
interest rates already low, two-year German governm<strong>en</strong>t bonds<br />
lost around 75 basis points, closing the year at 0.1%. The cut in the<br />
interest rate for t<strong>en</strong>-year maturities amounted to around 100 basis<br />
points, with the interest rate slumping to 1.8% by the turn of the<br />
year.<br />
Risk <strong>report</strong> Forecast and<br />
opportunities <strong>report</strong><br />
In addition to these influ<strong>en</strong>cing factors, the movem<strong>en</strong>t in the USD<br />
exchange rate had a direct effect on our invested assets, too. The<br />
USD stood at 1.34 to the euro on 31 December 2010 and rose in the<br />
first six months of <strong>2011</strong> to over 1.45 to the euro, before the tr<strong>en</strong>d<br />
reversed completely in the second half of the year. Slumping to 1.29<br />
to the euro on 31 December <strong>2011</strong>, the USD was therefore worth less<br />
than it had be<strong>en</strong> at the same period in the preceding year. Exchange<br />
rate fluctuations alone resulted in an increase in value of almost<br />
4% in our USD holdings after translation into the Group <strong>report</strong>ing<br />
curr<strong>en</strong>cy (euros). At the <strong>en</strong>d of the year, our portfolio of USD holdings<br />
was worth EUR 11.4 billion, 15% of the total assets under own<br />
managem<strong>en</strong>t.<br />
In rec<strong>en</strong>t years, fixed-income investm<strong>en</strong>ts have always be<strong>en</strong> the<br />
most significant category of asset, but in <strong>2011</strong> they became ev<strong>en</strong><br />
more important. The proportion of the total investm<strong>en</strong>t portfolio<br />
attributable to fixed-income securities was 78%, a rise of 2 perc<strong>en</strong>tage<br />
points on the preceding year. The contribution made by this<br />
category of asset to earnings amounted to EUR 2.7 billion, and this<br />
sum was reinvested in the year under review. The Group actively<br />
reduced its equity exposure to a minimum in the course of <strong>2011</strong>, the<br />
equity ratio amounting to 1.0% by the <strong>en</strong>d of the year. Although the<br />
proportion of the total investm<strong>en</strong>t portfolio attributable to alternative<br />
investm<strong>en</strong>ts and real estate remained low, these investm<strong>en</strong>ts<br />
did help to diversify and thus stabilise the various portfolios.<br />
In compliance with all legal requirem<strong>en</strong>ts and internal Group<br />
guidelines, the diversification of the investm<strong>en</strong>t portfolio as at<br />
31 December <strong>2011</strong> compared to year-<strong>en</strong>d 2010 was as follows:<br />
Breakdown of the investm<strong>en</strong>t portfolio<br />
In %<br />
9<br />
2<br />
12 2<br />
75<br />
7<br />
2<br />
13 2<br />
76<br />
2009 2010 <strong>2011</strong><br />
Other<br />
Real estate<br />
Funds held by ceding companies<br />
Equities and other variable-yield investm<strong>en</strong>ts<br />
Fixed-income securities<br />
6<br />
2<br />
13 1<br />
78<br />
Talanx Group. Annual Report <strong>2011</strong><br />
65