Hannover Re Group constituted a further important source of information for the Supervisory Board. We received an analysis of the 2009 results in non-life and life/health reinsurance as well as a presentation from the Executive Board covering the profit expectations for the 2010 financial year and the operational planning for the 2011 financial year. In addition, the
Chairman of the Supervisory Board was constantly advised by the Chairman of the Executive Board of major developments and impending decisions as well as of the risk situation within the company and the Group. All in all, we were involved in decisions taken by the Executive Board and assured ourselves of the lawfulness, regularity and efficiency of the company’s management as required by our statutory responsibilities and those placed upon us by the company’s Articles of Association. No audit measures pursuant to § 111 Para. 2 Sentence 1 German Stock Corporation Act were required in the 2010 financial year.
Act (Außensteuergesetz). This procedure concluded with the pleasing decision for the Hannover Re Group handed down on 13 October 2010 and the amendment of the affected tax assessments – which has either already been carried out or has been announced by the revenue authority. The core of the legal dispute, about which the Executive Board updated the
Supervisory Board on a regular and timely basis, revolved around the question of whether the investment income gener-
IFRS and the individual financial statement of the parent company Hannover Re drawn up in accordance with the German
Clarendon National Insurance Company and its subsidiaries and prepared the adoption of resolutions on these matters by the full Supervisory Board. The discussion of the quarterly financial statements for the parent company Hannover Re and the Hannover Re Group as well as the findings of the audits conducted by the Internal Auditing unit constituted further key areas of deliberation.
Board. The Standing Committee considered at length the personnel changes on the company’s Executive Board and recommended to the full Supervisory Board that Dr. Klaus Miller be appointed as a full member of the Executive Board. Furthermore, the Executive Board was authorised to conclude an exemption agreement with a member of the Executive Board regarding the exercise of an outside mandate. The Committee deliberated at length on the preparation of recommendations for the full Supervisory Board regarding the revision of the system of Executive Board remuneration and the adjustment of the contracts of employment with members of the Executive
Reporting Standards (IFRS), the auditors were required to subject the measurement of deferred acquisition costs and the fair value determination of investments with a special eye to the fair value hierarchy of IFRS 7.27 B to particular scrutiny.
The mandate for the review report by the independent auditors on the interim financial report as at 30 June 2010 was again also awarded. The special challenges associated with the international aspects of the audits were met without reservation. Since the audits did not give rise to any objections
The Supervisory Board once again devoted considerable attention to the issue of Corporate Governance. The Rules of
Procedure for the Supervisory Board were modified with an eye to the revised version of the German Corporate Governance Code (DCGK) as amended 26 May 2010. As far as the composition of the Supervisory Board is concerned, efforts are now being made to ensure that at least two members of the
The deductibles in the D&O cover as well as the system of
– in each case drawn up as at 31 December 2010 – and have no objections. Nor do we have any objections to the statement reproduced in the dependent company report. The Supervisory Board thus concurred with the opinions of the auditors and approved the annual financial statements and the consolidated financial statements; the annual financial statements are thereby adopted. We concur with the Executive Board’s proposal regarding the appropriation of the disposable profit for 2010.
Capital asset pricing model (CAPM): the CAPM is used to explain the materialisation of prices/returns on the capital market based on investor expectations regarding the future probability distribution of returns. Under this method, the opportunity cost rate for the shareholders’ equity consists of three components – a risk-averse interest rate, a market-specific risk loading and an enterprise-specific risk assessment, the beta coefficient. The cost of shareholders’ equity is therefore defined as follows: risk-averse interest rate + beta * enterprise -specific risk assessment.
Diversification: orientation of business policy towards vari ous revenue streams in order to minimise the effects of economic fluctuations and stabilise the result. Diversification is an instrument of growth policy and risk policy for a company.
Modified Coinsurance- (Modco) Treaty: type of reinsur ance treaty where the ceding company retains the assets supporting the reinsured reserves by withholding a fund, thereby creating an obligation to render payments to the reinsurer at a later date. Such payments include a proportional share of the gross premium plus a return on the assets.
Non-proportional reinsurance: reinsurance treaty under which the reinsurer assumes the loss expenditure in excess of a particular amount ( priority) (e.g. under an excess of loss treaty).
Other securities, held-to-maturity: investments in debt securities intended to be held to maturity. They are meas ured at amortised cost.
(Insurance) Pool: a risk-sharing partnership under civil law formed by legally and economically independent insurers and reinsurers in order to create a broader underwriting base for particularly large or unbalanced risks. The members undertake to write certain risks only within the scope of the insurance pool. They include such risks – while maintaining their commercial independence – in the insurance pool against a commission fee. Each insurer participates in the profit or loss of the insurance pool according to its proportionate interest.
Portfolio: a) all risks assumed by an insurer or reinsurer in a defined sub-segment (e.g. line of business, country) or in their entirety; b) group of investments defined accord ing to specific criteria.
Provision: liability item as at the balance sheet date to discharge obligations which exist but whose extent and/or due date is/are not known. Technical provisions, for example, are for claims which have already occurred but which have not yet been settled, or have only been partial ly settled (= provision for outstanding claims, abbreviated to: claims provision).
Retention: the part of the accepted risks which an insurer/reinsurer does not reinsure, i.e. shows as net (retention ratio: percentage share of the retention relative to the gross written premiums).
Instead, the insurer determines a maximum sum insured per risk up to which it is prepared to be liable. Risks that exceed the ceding company’s retention (surpluses) are borne by the reinsurer. The reinsurer’s lines thus vary according to the level of the retention and the sum insured of the reinsured contract. The reinsurer’s liability is gen erally limited to a multiple of the ceding company’s retention.
Surplus relief treaty: a portfolio reinsurance contract under which an admitted reinsurer assumes (part of) a ceding company ’s business to relieve stress on the cedant’s pol icyholders’
FASB ASC, US GAAP also includes, for example, standard accounting practices in specific industries.
Asbestos- and pollution-related claims, asbestos-related claims and pollution damage, asbestos and pollution risks
Catastrophy risk(s, business, losses, bond) 3 f, 8, 21 f, 25, 27,
Life and health reinsurance 3, 5 f, 8, 15, 19 f, 27, 36 ff, 49, 55 f, 198 ff
Property (insurance, business, line) 23 ff, 31, 33, 35, 95, 97,
We would also be pleased to provide you with the individual Annual Report of Hannover Rückversicherung AG in German or English. If you wish to receive paper copies of any of these versions, please contact