talanx group annual report 2011 en

70
The Talanx Group Strategy Enterprise
management
Analysis of the capital structure
Currency effects
Currency-related interdependencies inevitably exist between the
assets and financial position in view of the international orientation
of the insurers brought together in the Talanx Group.
Talanx Group. Annual Report 2011
Research and
development
In principle, however, the internationally operating insurers normally
receive payments and pay claims in their respective national
currencies. This means that assets to cover liabilities are also held in
foreign currencies. Matching currency coverage is required for this
purpose. At this point, we would refer the reader to our remarks in
the risk report. For the purposes of the consolidated financial statement,
the relevant national currencies are presented as explained
in the Notes under “Summary of the major accounting policies –
Currency translation”.
Development of major items
In the financial year just ended, the shareholders’ equity increased
by EUR 726 million – or 9% – to EUR 8,706 (7,980) million. The equity
without minority interests amounted to EUR 5,421 (4,945) million.
The volume of subordinated liabilities dropped slightly by
EUR 176 mil lion to EUR 2.6 billion as a result of the exercise of a cancellation
option and full repayment of a bond issued by Hannover
Finance (Luxembourg) S. A. in the first quarter of 2011 (EUR 138 million).
The features of the bonds are described in item 17 of the Notes
“Subordinated liabilities.”
Markets and
general conditions
Business
development
Assets and
financial position
Capital structure over a multi-year period 2011 2010 1) 2009 1)
In EUR million In % In EUR million In % In EUR million In %
Shareholders’ equity 8,706 8 7,980 7 7,153 7
Subordinated liabilities 2,615 2 2,791 3 2,003 2
Technical provisions – gross 83,100 72 77,510 70 73,210 72
Technical provisions in the area of life insurance insofar
as the investment risk is borne by policyholders 6,067 5 6,414 6 4,975 5
Other provisions 2,589 2 2,751 2 2,644 3
Liabilities 10,212 9 10,829 10 9,750 10
Provisions for deferred taxes 1,488 1 1,444 1 1,478 1
Liabilities of disposal groups classified as held for sale 491 1 1,381 1 — —
Total liabilities 115,268 100 111,100 100 101,213 100
1) Adjusted on the basis of IAS 8
In addition, a line of credit with a volume of nominally EUR 1.5 billion
is available to Talanx AG, of which – as in the previous year – an
amount of EUR 550 million was utilised. The available floatingrate
loan matures at the latest on 31 July 2012. Furthermore, on
13 July 2011 and 21 December 2011 Talanx AG concluded agreements
on two syndicated variable-interest credit lines in the amounts of
EUR 500 million and EUR 650 million, respectively, each with a term
of five years. These are follow-on funding agreements that come
into effect only when the existing credit line matures or is cancelled
or when the new credit line is paid out.
With respect to further loan agreements and letters of credit, please
see the presentation of off-balance sheet financial instruments
and the explanatory remarks in the Notes on pages 208 and 283,
respectively.
Composition of the provisions
connected with the insurance business
(after consolidation) 2011 2010 1) 2009 1)
Figures in EUR billion
Unearned premium reserve 4.7 4.3 3.8
Benefit reserve 45.7 43.6 41.0
Loss and loss adjustment expense reserve 31.4 28.5 27.3
Provision for premium refunds 1.0 0.8 0.9
Other technical provisions 0.3 0.3 0.2
Total 83.1 77.5 73.2
1) Adjusted on the basis of IAS 8