Capital asset pricing model (CAPM)

The Capital asset pricing model (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.

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.


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

Type of coinsurance contract where the ceding company retains a portion of the original premium at least equal to the ceded reserves. Similar to a ModCo contract the interest payment to the reinsurer reflects the investment return on an underlying asset portfolio.

Combined ratio

Sum of loss ratio and expense ratio.

Confidence level (also: probability level)

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

Contribution margin accounting level 5 (DB 5)

This level of contribution margin accounting constitutes the clear profit after earning the discounted claims expenditure plus all external and internal costs including the cost of capital.

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.

Credit status (also: creditworthiness)

Ability of a debtor to meet its payment commitments.

Critical illness coverages

cf. dread disease coverages