Munich Re’s market capitalisation at 31 December3 €bn 28.7 28.7 24.4 17.0 21.4
Munich Re acquires shares in a wind farm in the USA with an installed capacity of 287 megawatts. MEAG thus makes Munich Re’s first infrastructure investment in North America. Miami Wind Energy Center is located in northern Texas, in one of the windiest regions of the USA.
In the year under review, the price development of reinsurance company shares fell short of those for several primary insurance companies, despite the comparatively low incidence of major losses. Overcapacity and intense competition in the reinsurance market – combined with the entry of new market players, such as pension funds, and stagnating demand – led to significant pressure on margins. This was aggravated by lower income from investments. However, given the comfortable capital situation of reinsurers, distributions in the form of higher dividends, share buy-backs and special dividends were important investment criteria.
Munich Re’s rating by specialised sustainability rating agencies, e.g. Sustainalytics, oekom, MSCI, Vigeo and RobecoSAM, has been consistently excellent, and it is thus one of the best in the insurance sector. In 2014, Munich Re came in first compared with its peers in the same market capitalisation category of the Sustainalytics rating.
— Group’s business model covers the relevant sections of the insurance industry’s value chain
New, previously unknown risks pose a particular challenge. We want to be the first to identify and evaluate these, with a view to maintaining our competitive advantage. In so doing, we aim to expand the boundaries of insurability and, at the same time, calculate technically adequate prices. With new insurance solutions, we aim to clearly set ourselves apart from the competition, win our clients’ loyalty, and generate profitable growth overall. Essential prerequisites for this are our broad risk knowledge, our experience in all global markets and intensive dialogue with our clients.
Immediately after the Annual General Meeting, we held the constituent meeting of the newly elected Supervisory Board, at which we addressed in particular the election of the Chairman and first deputy of the Supervisory Board, and the election of members of the five Supervisory Board committees.
The Annual General Meeting elected Professor Ursula Gather and Gerd Häusler as new members of the Supervisory Board. Prior to the Annual General meeting, the following members of the Supervisory Board were elected by the relevant employee representative bodies on the basis of the co-determination agreement: Dr. Anne Horstmann, Ina Hosenfelder, Beate Mensch, Ulrich Plottke, Gabriele Sinz-Toporzysek, and Angelika Wirtz. The period of office of the new and re-elected members of the Supervisory Board began at the end of the Annual General Meeting.
Words of thanks to the Board of Management and employees The Supervisory Board wishes to thank all the members of the Board of Management and staff worldwide. With their work and commitment, they have once again contributed to another gratifying result for Munich Re.
Financial position 100 Financial strength 100 Analysis of our capital structure 100 Asset-liability management 102 Capital management 102 Information in accordance with Section 315 (4) of the German Commercial Code (HGB) and explanatory report of the Board of Management 103 Group solvency 106 Analysis of the consolidated cash flow statement 107
International D.A.S. Rechtsschutz Aktiengesellschaft, Vienna D.A.S. Société anonyme belge d’assurances de Protection Juridique, Brussels DAS Legal Expenses Insurance Company Limited, Bristol DAS Nederlandse Rechtsbijstand Verzekeringmaatschappij N.V., Amsterdam ERGO Assicurazioni S.p.A., Milan ERGO General Insurance Company S.A., Athens ERGO Insurance N.V., Brussels ERGO Insurance SE, Tallinn ERGO Life Insurance SE, Vilnius ERGO Previdenza S.p.A., Milan ERGO RUSS Versicherung AG, St. Petersburg ERGO SIGORTA A.S., Istanbul ERGO Versicherung Aktiengesellschaft, Vienna Sopockie Towarzystwo Ubezpieczen Ergo Hestia Spolka Akcyjna, Sopot Sopockie Towarzystwo Ubezpieczen na Zycie Ergo Hestia Spolka Akcyjna, Sopot 1 A detailed list of shareholdings can be found on page 292 ff. in the notes to the consolidated financial statements. 2 Only subsidiaries with premium volume exceeding €50m are listed.
The main performance metrics at Group level are economic earnings and the return on risk-adjusted capital after tax (RORAC).
In applying the uniform Group performance measurement model of economic earnings in the individual business fields, we use conceptually consistent measurement approaches that are individually geared to the characteristics of each of the respective businesses and responsibilities. They include the value added by property-casualty reinsurance and Munich Health, and the excess return from our investment activity (asset-liability management). In life insurance and the bulk of our health primary insurance business, the “value added by new business” and the “change in value of in-force business” on the basis of Market Consistent Embedded Value (MCEV) are additionally applied. In the future, we will derive these target figures from the calculation of the economic balance sheet under Solvency II. The performance metric economic earnings is used directly for ERGO, as no adjustments for this field of business are necessary. Group corporate management is designed so that we are in a position to maximise value creation while observing subsidiary parameters.
Dr. rer. pol. Ludger Arnoldussen Germany, Asia Pacific and Africa Central Procurement (since 1 January 2015) Services
Hans Peter Claußen (Deputy Chairman until 30 April 2014) Member from 22 April 2009 until 30 April 2014, Employee of D.A.S. Deutscher Automobil Schutz Allgemeine Rechtsschutz-Versicherungs -AG (until 31 March 2014)
Frank Fassin Member since 22 April 2009, last re-elected 30 April 2014 Regional Section Head Financial Services, ver.di North Rhine-Westphalia
Group objective Business-field objectives Divisional objectives Personal objectives Overall performance 0–200% (fully achieved = 100%)
1 In the case of Board members with a combination between defined benefit plans and defined contribution plans, the amount corresponds to the value of the annual vested pension at 31 December 2008, in the case of Mr. Daschner, it corresponds to the defined benefit at 31 December of the year under review.
Multi-year variable remuneration Multi-year performance 2011–2013 1,838,970 1,152,480 Multi-year performance 2012–20142 1,618,822 1,163,579 Long-term Incentive Plan 20063 489,429 Long-term Incentive Plan 20073 416,176 Long-term Incentive Plan 20083 568,766 Long-term Incentive Plan 20093 586,057 577,584 428,300 1 At the time of preparation of this report, no Supervisory Board resolution had yet been passed on the amounts to be paid for the 2014 annual performance. The amount shown for the 2014 annual performance remuneration is based on estimates and the relevant provisions posted. 2 At the time of preparation of this report, no Supervisory Board resolution had yet been passed on the amounts to be paid for the 2012–2014 multi-year performance. The amount shown for the 2012–2014 multi-year performance remuneration is based on estimates and the relevant provisions posted. 3 Proceeds from the exercise of stock appreciation rights granted in 2006–2009.
— Global economic growth only moderate — Again significant fall in long-term interest rates — Marked increase in global premium income, particularly in life business — Prices in property-casualty reinsurance continue to fall
ERGO Life and Health Germany 20% (20%) ERGO Property-casualty Germany 6% (6%) ERGO International 8% (7%)
On 1 January 2015, via its subsidiary MR RENT-Investment GmbH, Munich, Munich Re acquired 100% of the voting shares in the solar park companies KS SPV 23 Limited, London, England, and Countryside Renewables (Forest Heath) Limited, London, England. The solar parks have a total installed capacity of 22.7 megawatts.
Premium income in Europe totalled €2.1bn (2.0bn), of which €1.0bn (0.9bn) was from our branch in the United Kingdom, and a further €377m (353m) from Germany. The technical result was satisfactory overall.
At our subsidiary Munich Reinsurance Company of Australasia Ltd., which writes our life reinsurance business in Australia and New Zealand, premium income increased to €727m (698m). For the aforementioned reasons, there was a significant strain on the technical result, which remained well below expectations.
Due to high levels of major losses in 2014, and the run-off of major losses from previous years, our combined ratio increased year on year to 97.5% (86.8%). This was in part compensated for by the positive run-off of provisions for basic losses.
The division’s combined ratio amounted to 85.0%, improving even on the very good result of 88.5% from the previous year. We benefited from much improved major-loss experience, and the loss reserve releases for prior years were above last year’s level.
The Global Clients and North America Division writes the international business of defined global clients (about 20%), worldwide Lloyd’s business (about 20%) and property-casualty business in the USA and Canada (about 60%).
The division’s premium volume increased to €6,702m (6,471m). We saw slight growth in liability insurance and were able to selectively write profitable business, particularly in the USA. As pressure on reinsurance prices for natural catastrophes grew, we made a deliberate decision to reduce our property reinsurance business.
In our unit Corporate Insurance Partner, we offer our clients in industrial and major- project business a wide range of insurance products. These customised solutions and services are based on our recognised industry- and risk-related knowledge. In addition to traditional business with a focus on natural hazards covers, New Re has specialised above all in structured, made-to-measure reinsurance solutions.
Life Germany encompasses German life insurance with the exception of direct insurance business.
1 Total premium income includes not only gross premiums written but also savings premiums for unit-linked life insurance and capitalisation products in accordance with the applicable statutory accounting guidelines.
Key figures 2014 Prev. year Change % Gross premiums written €m 3,115 3,172 –1.8 Share of gross premiums written by ERGO % 18.6 19.0 Loss ratio % 63.1 64.0 Expense ratio % 32.2 32.7 Combined ratio % 95.3 96.7 Operating result €m 304 291 4.5
The technical result in the ERGO International segment improved to €136m (123m). In the past financial year, the investment result totalled €662m (551m). This significant improvement was largely attributable to a higher balance from write-ups and writedowns, mainly due to write-ups of interest-rate derivatives. The increased investment result was one of the main reasons for the enhanced operating result of €278m (210m). The consolidated result amounted to –€276m (94m). The decrease is due to the impairment of goodwill of –€445m.
As a result of the reduced interest position in reinsurance, the compensatory effect between the reinsurance and primary-insurance interest positions at Group level decreased. Together with the changed duration position in primary insurance, at Group level this leads to a year-on-year increased exposure to falling interest rates.
Our primary insurance and reinsurance operations have a significant influence on our balance sheet: as we have consistently geared our Group toward value creation in its core business, investments on the assets side of the balance sheet serve to cover technical provisions (75% of the balance sheet total). Equity (11% of the balance sheet total) and bonds classified as strategic debt (2% of the balance sheet total) are the most important sources of funds.
More details on ALM as a tool of corporate management are available on page 41 f.
Munich Re Group Annual Report 2014 impair our strategic flexibility or overall capital strength. Furthermore, in addition to dividend payments, we still generally consider share buy-backs an important instrument of active capital management. In March 2014, we announced another buy-back programme for up to €1bn by the 2015 Annual General Meeting. By 25 February 2015, we had repurchased shares with a value of €866m. Including dividend payouts and the share buy-backs from 2006 to 2014, we have been able to return over €17.4bn to our shareholders since 2006.
Munich Re’s eligible capital around 3.1 times higher than the legal requirement
ERGO relies on feedback from consumers in order to constantly optimise its products. Listening to their opinions is an integral part of the process of developing new products. The ERGO Customer Advisory Board and ERGO’s Customer Workshop on the internet are also a way of maintaining ongoing dialogue with its customers. In April 2014, responsibility for the most important client processes was pooled in the new customer and sales division.
The efforts of our staff are crucial to the success of Munich Re. Their professional expertise, commitment and readiness to embrace innovation are the factors that drive our business forward. We create the necessary conditions for nurturing and enhancing their personal development and performance in all areas. Developing and keeping this high-level expertise and broad experience for the benefit of the Group is one of our most important objectives.
Our largest shareholder at the end of the year was still Warren E. Buffett, who holds a stake of around 11.6% in Munich Reinsurance Company via several companies in his group (Berkshire Hathaway Inc., OBH Inc., and National Indemnity Co.). Asset manager BlackRock is our second-largest shareholder with around 5.5%.
Above all, the foundations of our efficient environmental management are clearly defined processes and responsibilities, and the organisation, data quality and degree of coverage of environmental data in the Group, in order to allow for comparability and evaluation of the changes. By the end of 2014, more than 75% of Munich Re (Group) employees were included in the Group-wide capture of environmental data. The vast majority of our staff work at locations that are already carbon-neutral. Seventeen of our locations have already been certified to international standard ISO 14001 and it has been demonstrated that we meet environmental management standards.
Successful projects undertaken during the past financial year include the following: A multi-year cooperation with the Geo Hazards International (GHI) organisation to prevent losses in the north-east Indian town of Aizawl, which is strongly prone to earthquakes and landslides. The loss susceptibility of buildings and infrastructure was checked. The results enabled us to derive some specific preventive measures that were passed on to the population and political decision-makers and are now being implemented in a sustainable way.
Risk governance Our risk governance maintains and fosters an effective risk and control culture, which encompasses all significant risk categories. It is supported by various committees at Group and field-of-business level.
The Group Investment Committee is responsible for important issues affecting the investments made by the Group and the fields of business, including the assumption and management of specific investment risks. The Committee is made up of members of the Group Committee, representatives from the fields of business and MEAG with responsibility for investments, and the Group CRO.
We explain the results produced by our internal risk model on page 126 ff.
Property-casualty Losses with a potential cost exceeding €10m within a field of business are classified as large losses. Accumulation losses are losses affecting more than one risk (or more than one line of business). We classify all other losses as basic losses. For basic losses, we calculate the risk of subsequent reserving being required for existing risks within a year (reserve risk) and the risk of under-rating (premium risk). To achieve this, we use explicit analytical methods (in our reinsurance field of business) and simulation-based approaches (in our ERGO field of business) that are based on standard reserving procedures, but take into account the one-year time horizon The calibration for these methodologies is based on our own historical loss and run-off data. Appropriate homogeneous segments of our property-casualty portfolio are used for the calculation of the reserve and premium risks. To aggregate the risk to whole-portfolio level, we apply correlations that take account of our own historical loss experience.
A detailed presentation regarding MCEV is available on Munich Re’s website at www.munichre.com/
In addition to the eurozone sovereign debt crisis, international crises such as that in Ukraine continue to create uncertainty, and any consequences will primarily affect our investments. To ensure that we initiate appropriate action to counter such risks as effectively as possible, the macroeconomic evaluations, the capital-market assessments, risk management and the investment process are closely coordinated.
Munich Re’s business model combines primary insurance and reinsurance under one roof. We are convinced of the future viability of traditional reinsurance. With the primary insurance activities we operate out of the reinsurance field of business and with our business fields ERGO and Munich Health, we have tapped further profitable growth opportunities. We assume risks from many different areas of private and economic life, and provide financial protection and risk management. However, surprising and unforeseen developments can never be ruled out entirely. To protect ourselves against resultant risks, we have established a sophisticated risk management system, which is described in detail in our risk report. Overall, we are well prepared to seize arising opportunities for the benefit of our Group.
The business field of reinsurance offers many development opportunities, despite a still highly competitive environment. Given the ever more stringent regulatory requirements, many insurers face the significant challenge of sustainably managing their capital relief and optimisation programmes and diversifying as best they can. Thanks to our strong capital base and expertise, we are positioned to be a long-term strategic partner for our clients, with a wide range of products and services from overarching consultancy to tailor-made reinsurance and capital market solutions.
A major impact on our business also derives from severe natural catastrophes. We expect climate change to lead to an increase in weather-related natural catastrophes in the long term, with the impact from weather extremes such as floods or seasonal water shortages varying from one region to another. We adapt our risk management and risk models to the latest findings.
The consolidated result of €2.9bn for 2014 was significantly above the target corridor of €2.3–2.5bn.
In ERGO Life and Health Germany, our total premium income is expected to be around €10.5bn, with gross premiums written ranging between €9bn and €9.5bn.
We are adhering to our long-term objective of a 15% return on our risk-adjusted capital (RORAC) after tax across the cycle of the insurance and interest-rate markets. In the long term, we want our income to grow using innovative business. However, in the current environment of very low interest rates on low-risk investments, this target will be difficult to achieve.
other changes 23 2 i. items where income and expenses recognised directly in equity are reallocated to the consolidated income statement 4,122 –3,285 Remeasurements of defined benefit plans –521 184 other changes – – ii. items where income and expenses recognised directly in equity are not reallocated to the consolidated income statement –521 184 Income and expense recognised directly in equity (I + II) 3,601 –3,101 Total recognised income and expense 6,772 232 thereof: Attributable to Munich Reinsurance Company equity holders 6,732 224 Attributable to non-controlling interests 40 8
Changes 31.12.2013 due to as originally adjustments recognised in 2013 31.12.2013 €m a) b) c) Assets B. IV. Other securities 3. At fair value through profit or loss 2,887 – – –587 2,300 B. VI. Other investments 3,824 – – –21 3,803 C. Insurance-related investments 6,699 – – 608 7,307 E. II. Other receivables 11,357 – 18 – 11,375 H. Deferred tax assets 6,989 – 6 – 6,995 Equity and liabilities A. II. Retained earnings 12,875 – –34 – 12,841 A. III. Other reserves 2,369 – 5 – 2,374 A. IV. Consolidated result attributable to Munich Reinsurance Company equity holders 3,313 – –9 – 3,304 E. Other accrued liabilities 4,169 –427 – – 3,742
Munich Reinsurance Company directly or indirectly holds all the voting rights in most of the entities included in the consolidated group. In a few cases when assessing whether control exists, there are some non-Group shareholders, but Munich Reinsurance Company directly or indirectly holds a clear majority of the voting rights. In these cases, no significant judgements or assumptions were made as to whether the entities are to be included.
No contingent liabilities or material separate transactions within the meaning of IFRS 3 were identified.
In order to protect its own portfolio, Munich Re uses alternative risk transfer in addition to traditional retrocession. Under this process, underwriting risks are transferred to the capital markets with the assistance of securitisation vehicles. The sole purpose of these vehicles is to securitise underwriting risks, mostly in the area of natural catastrophes, and to issue catastrophe bonds. Depending on the design of the risk transfer agreement with the securitisation vehicle, the transaction is classified as a derivative or as an insurance contract. Derivatives are designated as at fair value through profit or loss under “other securities” or “other liabilities”. The agreements designated as insurance contracts are not recognised in the balance sheet until a loss has occurred, and they are shown under “ceded share of technical provisions”.
Munich Re also invests in the area of catastrophe risks. Munich Re invests in various securities whose repayment and interest is generally linked to the occurrence of natural catastrophes. The securities are issued by securitisation vehicles which as a matter of general policy are not set up by Munich Re. If the risk transfer agreement is not an insurance contract, the bond component of the catastrophe bond is recognised under “securities available for sale”, and the derivative portion is recognised under “other securities at fair value through profit or loss” or under “other liabilities”. If there is an insurance contract, recognition is made under “deposits retained on assumed reinsurance” or “technical provisions”.
Other assets are generally carried at amortised cost. The owner-occupied property recognised under other assets is accounted for as outlined under Assets – B Investments – Land and buildings. Plant and equipment is amortised mainly on a straight-line basis, the underlying useful lives ranging between 1 and 50 years. Where required, impairment losses are recognised or reversed for the Group’s owner-occupied property. These impairment losses or impairment losses reversed are distributed between the functional areas.
Non-controlling interests are accounted for in the balance sheet as part of equity. These are the shares of third parties in the equity of subsidiaries that are not wholly owned directly or indirectly by Munich Reinsurance Company. Direct minority interests in investment funds and in partnerships are recognised under “other liabilities”. The portion of the result attributable to non-controlling interests is shown in the consolidated result.
This item includes provisions for post-employment benefits and similar obligations. Munich Re companies generally give commitments to their staff in the form of defined contribution plans or defined benefit plans. The type and amount of the pension obligations are determined by the conditions of the respective pension plan. In general, they are based on the staff member’s length of service and salary. Under defined contribution plans, the companies pay fixed contributions to an insurer or a pension fund. This fully covers the companies’ obligations. Under defined benefit plans, the
Amount of impairment losses recognised in profit or loss during the period In the 2014 financial year, our impairment testing of goodwill identified impairments totalling –€445m. These have been recognised in the item “impairment losses of goodwill” in the income statement and are attributable in particular to the following: The goodwill totalling €440m from the acquisition of shares in the ERGO Insurance Group and proportionately allocated to the segment ERGO International was written off in full in the fourth quarter 2014. The recoverable amount for the segment ERGO International is €2,117m. The impairment is mainly also attributable to the low-interestrate environment. The impairment was identified as a result of the calculation of the recoverable amount on the basis of the fair value less costs to sell. To be able to take account of the different business activities and maturity of the companies in the segment
Disposals Loss of control – – – – – – Other – –1 –19 – – –
Reclassification 15 –10 Carrying amount at 31 Dec. financial year 3,732 3,762 Accumulated depreciation and accumulated impairment losses at 31 Dec. financial year –1,197 –1,130 Gross carrying amount at 31 Dec. financial year 4,929 4,892
Insurance-linked derivatives (excluding variable annuities) are allocated to Level 3 of the fair value hierarchy. The valuation of the derivative components of catastrophe bonds is based on the values supplied by brokers for the underlying bonds, which is why it is not possible to quantify the inputs used that were not based on observable market data. If no observable inputs are available for customised insurance-linked derivatives, valuation is made using the present-value method on the basis of current interest-rate curves and historical event data. Due to the low volume, the effects of alternative inputs and assumptions are immaterial.
Investments not measured at fair value Loans – 68,178 673 68,851 Other securities held to maturity – – – –
Munich Re Group Annual Report 2014 5 Investments in affiliated companies, associates and joint ventures
The fair value of investments in associates and joint ventures accounted for using the equity method amounted to €1,796m (1,721m) at the balance sheet date. In the financial year, shares of losses of associates amounting to – (€2m) were not recognised in the balance sheet. Altogether, the losses not recognised in the balance sheet totalled – (€4m).
Aggregated financial information on shares in associates and joint ventures: €m 31.12.2014 Prev. year Overall result for the year after tax from continued operations 109 131 Result after tax from discontinued operations – – Income and expenses recognised directly in equity –12 2 Total recognised income and expenses 97 133
Expiring in up to three years – – – – – – Expiring in over three years and up to ten years – 72 72 – 18 18 Expiring in over ten years – – – – – – Not expiring – – – – – –
The impairment losses reversed are distributed between the following different Group segments: in reinsurance, €2m (1m) is apportionable to life and €2m (1m) to propertycasualty; in the ERGO field of business, €2m (5m) is apportionable to Life and Health Germany, and €1m (–) is allocable to Munich Health.
In the year under review, a total of €1,254m was distributed to Munich Reinsurance Company’s equity holders for the financial year 2013 in the form of a dividend of €7.25 per dividend-bearing share.
Unrealised gains and losses €m 31.12.2014 Prev. year Unconsolidated affiliated companies, associates and joint ventures not accounted for using the equity method 168 158 Associates and joint ventures accounted for using the equity method 113 100 Other securities available for sale
Allocation of liabilities to levels of the fair value hierarchy €m Level 1 Level 2 Level 3 Total Liabilities measured at fair value Other liabilities
The provision for annuity claims involves periodic payments for disability cases and is usually due long term. A major part of this provision is established in the life reinsurance and life primary insurance segment for future annuity payments; a small part refers to provisions for annuities in personal accident, liability and workers’ compensation insurance. The biometric actuarial assumptions are selected using appropriate actuarial principles. Provisions for annuity claims are calculated as the present value of the expected future payments. The discount rates used are presented in the Disclosures on risks from insurance contracts and financial instruments (39) Risks from life and health insurance business and (40) Risks from property-casualty insurance business.
Development of the claims reserve in the property-casualty segment1 2014 Prev. year Ceded Ceded €m Gross share Net Gross share Net Status at 31 Dec. previous year 43,494 –2,121 41,373 44,493 –2,317 42,176 Currency translation differences 2,682 –143 2,539 –1,604 55 –1,549 Change in consolidated group – – – –25 1 –24 Claims expenses
Breakdown of expenses booked in the financial year €m 2014 Prev. year Net interest income or expense –59 –60 Service cost –125 –140
Salary obligations and other remuneration for desk and field staff 120 99 –94 –3 –3 119
The miscellaneous liabilities contain liabilities of €500m (230m) resulting from reinsurance contracts without significant risk transfer, derivative financial instruments with a negative fair value of €1,228m (528m), and negative fair values totalling €675m (427m) for insurance-linked derivatives and hedging derivatives of variable annuities. The miscellaneous liabilities also include €28m (17m) for social security and €190m (199m) for interest and rent.
Change in unearned premiums – Gross –16 –4 5 6 –85 –75
Munich Re Group Annual Report 2014 35 Insurance-related investment result 36 Other operating result
Other non-operating expenses –680 –781 –289 –271 –158 –112 Impairment losses of goodwill – – – – –445 –29 Net finance costs –29 –30 –15 –17 –28 –27
Reinsurance Life Property-casualty €m 2014 Prev. year 2014 Prev. year Other non-operating income 540 596 1,361 1,226 Other non-operating expenses –599 –644 –1,477 –1,562 Impairment losses of goodwill – – – – Net finance costs –36 –61 –119 –118
Information on the Group’s strategic debt can be found in the management report on page 101 and in the Notes to the consolidated balance sheet – Equity and Liabilities (20) Subordinated liabilities and (27) Bonds and notes issued.
In reinsurance, we use the following discount rates for the provision for future policy benefits and the provision for outstanding claims: Discount rates used for provisions – Reinsurance (gross)
Provisions for asbestos and environmental claims 31.12.2014 Prev. year €m1 Gross Net Gross Net
Decrease of 10% –0.341 –0.708 –1.268 –0.391 –0.641 –1.248 Decrease of 30% –1.650 –1.499 –3.806 –1.728 –1.370 –3.743 Market values 14.410 12.021 1 Gross before tax and policyholder participation in surplus.
In addition, we are subject to supervisory requirements that may restrict dividend payments or other capital distributions, loans and advance payments within the Group.
Due dates €m 31.12.2014 Prev. year Not later than one year 182 186 Later than one year and not later than five years 433 477 Later than five years 230 248
On 1 January 2015, via its subsidiary MR RENT-Investment GmbH, Munich, Munich Re acquired 100% of the voting shares in the solar park companies KS SPV 23 Limited, London, England, and Countryside Renewables (Forest Heath) Limited, London, England, von BayWa r.e. 205. Projektgesellschaft mbH, Gräfelfing, Germany and BayWa r.e. 149. Projektgesellschaft mbH, Gräfelfing, Germany. The solar parks have a total installed capacity of 22.7 megawatts.
Due dates 31.12.2014 Prev. year Gross Interest Net Gross Interest Net €m investment element investment investment element investment Minimum lease payments not later than one year – – – – – – Minimum lease payments later than one year and not later than five years 2 – 2 2 – 2 Minimum lease payments later than five years 73 57 16 74 57 17
The following disclosures relate to companies in which our directly and indirectly held shareholdings (as defined in Section 16 (2) and (4) of the German Stock Cor por ation Act – AktG) add up to 20% or more of the share capital, and large comp anies (as defined in Section 267 (3) of the German Commercial Code – HGB) in which our directly and in directly held shareholdings add up to more than 5% of the voting rights.
Companies included on a pro-rata basis (joint operation pursuant to IFRS 11) “Pensionsfonds” of MetallRente pension system, Allianz Pensionsfonds AG, Stuttgart 17.5000
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