ck v e rs ic h e ru n g sG
The objectives we have set ourselves for the next few years are considerable: – We plan to extend our market position as leading reinsurer worldwide and to be number one, or at least number two, in all important markets. The areas where we are planning the biggest growth in reinsurance are life, health and workers’ compensation business, alternative markets, financial reinsurance and innovative coverage concepts for new risks.
Germany Marine, Aviation and Space Corporate Communications (from 1st July 2000)
Further focal points of our meetings included developments in the area of asset management, the switch in accounting to International Accounting Standards, the effects of the German tax reform law on Munich Re and its German subsidiaries, and the package of measures to simplify Munich Re’s share structure.
For the members of the Supervisory Board to be elected by the shareholders, Dr. Eberhard von Kuenheim, Dr. Wolfgang Röller and Dr.-Ing. Dieter Soltmann were no longer available for re-election. We thank them for their valuable counsel and their dedication, with which they constantly contributed to the development of our company. The following were newly elected to the Supervisory Board: Professor Dr. Henning Kagermann, Co-Chairman of the Executive Board and Chief Executive Officer of SAP AG, Dr. jur. Dr.-Ing. Heinrich von Pierer, President and Chief Executive Officer of Siemens AG, and Dr. Alfons Titzrath, Chairman of the Supervisory Board of Dresdner Bank AG. The other shareholder representatives were re-elected.
At its constituent meeting following the AGM, the Supervisory Board re-elected Mr. Hartmann as its Chairman and Mr. Bach and Dr. Schulte-Noelle as its Deputy Chairmen.
Dr. jur. Dr.-Ing. E. h. Heinrich v. Pierer (from 22nd July 1999) President and Chief Executive Officer of Siemens AG
Wolfgang Stögbauer (from 22nd July 1999) Employee of the Munich Reinsurance Company
The Munich Re Group – value-oriented and with strong growth potential
The states undergoing economic transformation in Central and Eastern Europe were largely spared the crises of the preceding two years, and even the war in Kosovo resulted in economic setbacks here only in the directly adjoining countries. However, these states were affected to an unexpected degree by the weak demand from the European Union. In Turkey, which was hit by natural catastrophes in the summer, GDP fell by 4.3% in real terms.
Inflation remained low globally. Particularly in the industrialized countries, the greater competition resulting from market liberalization and enhanced market transparency put persistent pressure on prices (structural disinflation). The picture of the New Economy – progressive growth without the risk of inflation – came to the fore particularly in the USA.
In our most important market – Germany – premium volume grew by 5.3%, but development was very varied. The uncertainty regarding the possible taxation of private provision for old age and the continuing debate about pension reform helped produce an 11.6% increase in market premium in the life sector. Health insurance also expanded, in this case by 3.2%, whereas the property-casualty sector stagnated (minus 0.4%).
Keen competition and a large supply of reinsurance capacity are the characteristic features of this important market, in which we are well represented by an office, two branches and several subsidiaries, including Great Lakes UK.
In both markets we are endeavouring to sound out and develop business opportunities in health insurance through long-term-oriented partnerships with local insurers and managed-care companies.
Munich Reinsurance Company of Africa (MRoA), which serves all the sub-Saharan markets, succeeded in maintaining its premium level and improving its result.
To supplement and support existing distribution channels, ERGO recently entered into a partnership with Deutsche Telekom. Together, they plan to create a virtual market place for financial services on the Internet.
Gross premiums DM m 585 525 Net premiums DM m 523 464 Profit for the year DM m 9.4 4.1 Investments DM m 366 337 * Consolidated financial statements in accordance with IAS.
In addition to sales through travel agencies and tour operators, the Internet is gaining significantly in importance as a distribution channel. EUROPÄISCHE has developed a form of virtual travel insurance and already sells some of its products using e-commerce.
The main focus of our equity investment is in Europe, since we are increasingly banking on the development of a European share culture. We chiefly measure the performance of our European equity funds against the Dow Jones Euro STOXX 50 and invest almost exclusively in liquid and marketable stocks.
– Precise underwriting guidelines, which we regularly update and whose implementation we constantly monitor
Adherence to the strict investment guidelines for our portfolio managers is permanently monitored by an organizationally separate risk management team. In addition, we regularly check the investment guidelines and the organizational measures (e.g. functional separation of trading and administration, controls) and adjust these to take account of current developments where necessary.
– global risks attached to both insurance business and the capital markets are systematically managed,
When comparing the data, it should be borne in mind that the parent company changed its balance sheet date as at 31st December 1998 (previously 30th June 1998). The investment result and the other income and expenses of the parent company are therefore only included in the previous year’s figures insofar as they were apportionable to the second half-year 1998; the underwriting income and expenses were already included on a calendar-year basis before.
The ERGO Insurance Group acquired three companies in the year under review for a total price of €42m. Apart from this, there were no significant changes in the group of consolidated companies.
Securities available for sale are stated at market value. Unrealized gains or losses are excluded from the income statement; after deduction of deferred taxes and the amounts apportionable to policyholders by the life and health insurers on realization, they are reflected in shareholders’ equity. This item also includes registered bonds and promissory notes.
The acquisition costs in health insurance are amortized proportionally to premium income over the total average policy term. The amortization amount is determined on the basis of the assumptions used for calculating the provision for future policy benefits.
At each balance sheet date we review the carrying amount of the deferred tax assets. If it is no longer probable that the deferred tax asset will be realized in the future, the carrying amount is reduced.
In our opinion, the consolidated financial statements give a true and fair view of the net assets, financial position, results of operations and cash flows of the Group for the business year in accordance with IAS. Our audit, which also extends to the group management report for the business year from 1st January 1999 to 31st December 1999, has not led to any reservations.
American Re Corporation, Princeton 100.0000 2,483,107 –94,722 American Re-Insurance Company, Princeton 100.0000 2,663,796 –84,659 Great Lakes Reinsurance (UK) PLC, London 100.0000 113,495 419 Munich American Reassurance Company, Atlanta 100.0000 237,584 13,217 Munich Reinsurance Company of Canada, Toronto 100.0000 85,658 9,131 Munich Reinsurance Company of Africa Limited, Johannesburg 100.0000 38,324 8,675 Munich Mauritius Reinsurance Company Ltd., Port Louis 100.0000 2,198 –159 Munich Reinsurance Company of Australasia Limited, Sydney 100.0000 86,169 –20,453 Münchener Rück Italia S. p. A., Milan 100.0000 269,122 –1,739 New Reinsurance Company, Geneva 100.0000 324,067 –8,505 Temple Insurance Company, Toronto 100.0000 95,117 9,084
International Accounting Standards (IAS) Standards formulated by IASC with the intention of achieving internationally comparable preparation and presentation of financial statements.
GAAP) The principles of US accounting that are stipulated as compulsory for listed companies in the USA.
Natural catastrophes 44, 46ff., 63 New Reinsurance Company 51f. North America 53f.
Florian Geiß/Susanne Bransch, Hamburg, pp. 58/61 Michael S. Yamashita/ Picture Press/Corbis, pp. 68/71 Florian Geiß/Susanne Bransch, Hamburg, pp. 76/79 Jo Magrean/Susanne Bransch, Hamburg, pp. 84/87 Jo Magrean/Susanne Bransch, Hamburg, pp. 98/101 Oliver Spiess/Susanne Bransch, Hamburg, pp. 150/153