talanx group annual report 2011 en

Overall assessment of
the economic situation
Non-financial
performance indicators
Corporate Governance Remuneration report Events of special
significance
The somewhat inferior assessment of Talanx AG relative to the Financial
Strength Ratings can be attributed to the methodology used
by the rating agencies, under which a rating markdown is applied to
holding companies. In other words, in accordance with the general
analytical criteria used by the rating agencies, companies that exercise
a purely holding function with no operational activities of their
own are rated lower relative to the Financial Strength Rating that
would be awarded to a comparable insurance undertaking.
Hannover Re is rated AA– (“Very Strong”) by S&P, equivalent to the
second-best rating category. The outlook for this rating is stable.
A. M. Best has awarded Hannover Re an Issuer CreditRating of a+
(“Strong”) corresponding to the third-best rating category on the ICR
rating scale used by A. M. Best. The outlook for Hannover Re’s ICR is –
in keeping with its Financial Strength Rating – positive.
Various ratings also exist for the subordinated liabilities issued by
Group companies (issue ratings). These ratings are set out in the
explanatory notes on the consolidated balance sheet in item 17
“Subordinated liabilities” of the Notes.
Risk report Forecast and
opportunities report
Overall assessment of
the economic situation
The Management of Talanx AG assesses the development of business
in 2011 – in light of the business environment – as satisfactory
overall. The Group was able to significantly improve return
on equity, operating profit (EBIT) and particularly net income
compared to the – admittedly weak – previous year. However, the
technical result could not completely meet expectations as it was
burdened by natural catastrophes to an extent that exceeded all expectations.
Nonetheless there was an improvement that can be attributed
to, among other things, the increase in new business from
primary insurance in Germany and the Industrial Lines segment
despite the decline in the single-premium business in life insurance.
Against the background of the turbulence on the international
capital markets the steady investment income of the Group
is especially gratifying. The result is good also from a structural
perspective: The Group’s financial strength continues to be high; in
particular its solvency ratio is significantly higher than required by
law. At the time when the management report was being prepared
the Group’s economic situation continued to be favourable.
Talanx Group. Annual Report 2011
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