Annual Report 2011 - R+V Versicherung

30
Forecast
Developments on the capital markets
Developments on the capital markets in 2012 will remain characterised
by the sovereign debt crisis in Europe. Closer cooperation
among the eurozone countries is assumed. Most likely
this consists of more reforms, more European fiscal policies
and more assistance from the ECB. It will be difficult to restore
the credibility lost among citizens and parties involved in the
capital markets in order to guarantee the sustained private
refinancing of sovereign debts.
However, due to experiences in recent crisis years, a worsening
of the crisis cannot be ruled out, especially as it meets with
a clear economic recession in Europe in the first six months of
the year. Interest rates and share prices at or slightly above
the current level are expected at the end of the year.
R+V is orienting its capital investment strategy towards security,
liquidity and yield. This also includes the explicit risk management
of individual issuers and countries including setting
issuer limits. The portfolios are widely diversified. Government
bonds from all euro crisis countries are weighted below average
with a portfolio share of approximately 3% in the R+V
Group and are strictly limited.
The high proportion of fixed interest securities with good
creditworthiness in the capital investment portfolio ensures
that technical obligations can be met at all times. The duration
should not be significantly extended or reduced. Opportunities
in the credit markets should be taken, whereby attention
should be paid to the high quality of securities and a wide
spread of credit risks. Equity commitments should be maintained,
but may be dependent on the market and can be
increased again if the company’s risk bearing capacity is
appropriate. Property commitments will be slightly increased
if attractive investments are available.
This long term investment strategy, which is oriented towards
security, combined with modern risk management, will also
determine the course in 2012. The requirements of Solvency II,
which are already known, will be taken into account as far as
possible.
If the capital market situation at the end of 2011 is extrapolated
to 31 December 2012 retaining the method applied to identify
long term value reductions used in 2011, the result from
capital investments will probably make a positive contribution
to the annual result at the level of the previous year.
Positive technical result before change to equalisation
provision expected
R+V Versicherung AG will also continue its profit and growth
oriented strategy in 2012. Business will be expanded where
risk appropriate premiums can be generated. The quality standards
for underwriting, pricing and loss management will be
continually monitored and the selective underwriting policy
adopted in previous years continued.
R+V Versicherung AG was again able to benefit from its good
AA-rating (Standard & Poor’s) and set positive impulses in the
context of the renewal for 2012 – the main renewal for the
company takes place on 1 January – even against the background
of the euro crisis.
The company is assuming moderate premium growth for 2012.
It is anticipating an ease of tension on the loss side and consequently
claims expenditure will fall. This expectation is subject
to the assumption that no large loss impacts occur outside
the value expected. A slight increase in costs is assumed in
connection with premium growth.