CSM (net)

The Contractual Service Margin (net) is a balance sheet item, that represents the net unearned profit embedded in reinsurance contracts and therefore indicates the future profits of the business underwritten in the past. The CSM (net) represents the (risk-adjusted) difference between the present value of the expected future cash inflows from these contracts (e.g. premiums) and the present value of the expected cash outflows (e.g. claims and expenses). The "net" aspect accounts for any expected future recoveries or expenses that may offset or contribute to the profit. The Contractual Service Margin (net) is recognized as revenue over time as the reinsurer provides services and assumes risks over the contract's duration.

Capital asset pricing model (CAPM)

Model 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.

Capital adequacy ratio

The adequacy ratio is derived from the ratio of the available capital (or own funds) to the required capital – the solvency capital requirement (SCR).

Capital allocation

Risk-appropriate allocation of the economic capital to the business segments of property & casualty reinsurance and life & health reinsurance as well as the investments on the basis of the respective economic risk content. Our internal capital model supplies key parameters such as the volatility of the covered business / investments and the contribution to diversification.

Capital, reserves and technical provisions

An insurer's capital and reserves, also including the provisions committed to technical business and the equalisation reserve. Total maximum funds available to offset liabilities.

Carbon Disclosure Project (CDP)

The Carbon Disclosure Project (CDP) is a London-based non-profit organisation, which once a year collects data on behalf of investors regarding companies' CO2 emissions and climate risks as well as their risk reduction targets and strategies with a view to creating greater transparency as to harmful greenhouse gas emissions.

Cash flow statement

Statement on the origin and utilisation of cash and cash equivalents during the accounting period. It shows the changes in liquid funds separated into cash flows from operating, investing and financing activities.

Cat bonds

Securitised (re)insurance risks in respect of which the payment of interest and / or repayment of capital is dependent on the occurrence and severity of a predefined insured event. Purchasers of a catastrophe bond assume the risk carried by the (re)insurer upon occurrence of the catastrophic event. Catastrophe bonds are part of the insurance-linked securities market. Cf. securitisation Instruments.


Direct insurer or reinsurer, which passes on (also: cedes) shares of its insured or reinsured risks to a reinsurer in exchange for premium.


Transfer of a risk from the direct insurer to the reinsurer.

Claims and claims expenses

Sum total of paid claims and provisions for loss events that occurred in the business year; this item also includes the result of the run-off of the provisions for loss events from previous years, in each case, after the deduction of own reinsurance cessions.

Coinsurance Funds Withheld- (CFW) Treaty

Reinsurance treaty under which the ceding company retains a portion of the original premium at least equal to the ceded reserves.

Combined ratio

Sum of loss ratio and expense ratio.


Compliance by an enterprise with legal requirements.

Confidence level (also: probability level)

The confidence level defines the probability with which the defined amount of risk will not be exceeded.

Corporate Governance

Serves to ensure responsible management and supervision of enterprises and is intended to foster the trust of investors, clients, employees and the general public in companies.

Corporate Social Responsibility

The voluntary contribution made by a company to sustainable development.

Credit spread

Mark-up between a risky and a risk-free interest-bearing security with the same maturity, as a risk premium for the credit risk entered into by the investor.

Credit status (also: creditworthiness)

Ability of a debtor to meet its payment commitments.

Critical illness cover

Personal rider on the basis of which typically a lump-sum cash payment is made in the event of previously defined severe illnesses.