Our claim: “Somewhat different”
- Well diversified, global player, above-average profitability
- Quick, flexible and independent
- Lean structures, efficient organisation
Our business model
We transact reinsurance business in our business groups of Property & Casualty and Life & Health. As a reinsurance specialist, we transact primary insurance business as a complement to our core reinsurance activities in selected niche markets. For the benefit of our clients and shareholders we achieve a competitive advantage by transacting our business with a lower cost of capital and lower management expenses compared to our peers. In order to ensure our long-term financial strength, we steer our business towards maintaining a capital base in line with our long-term business opportunities.
Property & Casualty business group: We consider ourselves to be a reliable, flexible and innovative market player that is amongst the best in any given market.
Life & Health business group: We are recognised as one of the top three providers of life and health reinsurance and the number one provider of innovative solutions, measured by customer surveys.
1. We have ambitious profit and growth targets
Profit and value creation are the cornerstones of our sustainable development as an organisation. This is in the best interests of our clients, shareholders, employees and business partners. This means generating profitable growth. Our goal is to increase the earnings per share and the value of the company – including dividends – in line with our return on equity target.
Our Economic Capital Model is the foundation of our management strategy and, based on this model, we aim to achieve a profit in excess of the cost of capital. This profit, which we refer to as Intrinsic Value Creation (IVC), is the key ratio used to manage our business activities. We offer our shareholders the prospect of a sustained above average return on their capital. As such, we target an IFRS return on equity of at least 900 basis points above the risk-free interest rate (900 basis points above 5-year rolling average of 10-year German government bond rate (risk-free), after tax).
Property & Casualty business group: We transact property and casualty reinsurance with two goals: to be amongst the world’s most profitable companies in this industry and to steer the volatility of our business in line with our profit targets.
Life & Health business group: We aim to outperform the worldwide growth of the life and health business in areas with an expected net income exceeding our cost of capital over rolling three-year periods.
2. We are a preferred business partner
Our commercial success hinges on our status as a preferred business partner for our clients. This is dependent upon our ability to enhance our clients’ commercial success through the services that we provide as a reinsurer. The value proposition is the decisive factor here to make us the preferred business partner for our clients.
Property & Casualty business group: Our guiding principle is customer satisfaction. We have a comprehensive range of products which can be tailored to our customers’ needs.
Life & Health business group: Our clients appreciate our outstanding time to market as we are flexible and responsive. We have a client-centric approach as we are listening and open-minded.
3. We aim for successful employees
The success of our company depends directly on the successful work of our employees. We therefore pay particularly close attention to the qualifications, experience and commitment of our staff and foster these attributes through our excellent personnel development and leadership practices.
4. We strive for an optimal balance between stability and yield of our investments
The structure of our investment holdings is guided by the requirements of our technical liabilities and our capitalisation. It particularly reflects the maturities of our liabilities as well as the currency exposure, which we cover on a matching basis to the greatest possible extent. Furthermore, we secure the liquidity required for our business. With this in mind, we pursue an investment policy that emphasises the stability and predictability of the return that we intend to generate.
5. We manage risks actively
In order to accomplish our business objectives, we enter into a broad range of risks which – while offering opportunities for profit – can also have adverse implications for the company. Risk management therefore forms an integral component of our value-based enterprise management and hence of all underlying decision-making processes. The foundation of our quantitative risk management is our internal capital model.
6. We maintain an adequate level of capitalisation
Our required equity resources are determined by the requirements of our economic capital model, solvency regulations, the expectations of the rating agencies in relation to our target rating and the expectations of our clients and shareholders. In addition, we maintain a sufficient equity buffer to enable us to act on available business opportunities at all times.
7. We ensure low costs through an efficient organisational set-up
We believe that our low cost ratio – relative to our competitors – gives us a sustained competitive advantage.
8. We use Information Technology to achieve a competitive advantage
Information management has evolved into a crucial competitive factor. Our information and communication systems assure optimal support for our business processes. We support the acquisition of new technology provided that the cost / benefit considerations are favourable.
9. We are committed to sustainability, integrity and compliance
We organise all our activities such that they conform to all legal requirements. Furthermore, we satisfy all justifiable public requirements placed on our global operations in connection with our business activities.
10. We strive for Performance Excellence and continuous improvement
In order to ensure the execution of our strategy across all areas of our organisation, we apply our holistic management system of Performance Excellence.