Development of the Group segments

Corporate Operations

  2010 2009 2008 1) 2007 1) 2006 1)

Figures in EUR million

         

Net investment income

–97

–56

–96

–67

–49

EBIT

–315

–26

–16

60

55


1)
The years prior to 2009 are of only limited comparability due to changes in segment allocation

Along with Talanx AG, this Group segment essentially consists of the AmpegaGerling companies, the reinsurance broker Protection Reinsurance Intermediaries AG (Protection Re) and the Group’s internal service companies, namely Talanx Service AG and the IT service provider – which will commence operational business in 2011. As a result of the restructuring within the Talanx Group the tasks assigned to the former HDI-Gerling Sach Serviceholding were reconfigured. As Talanx Service AG, it now brings together the domestic central functions that do not relate directly to the insurance business, such as accounting, purchasing, facility management and human resources.

AmpegaGerling – the investment specialist

The “AmpegaGerling” brand encompasses both the asset management of the Talanx Group itself as well as asset management and funds provider activities aimed at institutional and private clients. The Asset Management GmbH, Investment GmbH and Immobilien Management GmbH are grouped together under this brand. In the course of the year, as part of the restructuring measures, AmpegaGerling Asset Management is to be renamed Talanx Asset Management and AmpegaGerling Immobilien Management will begin trading as Talanx Immobilien Management. AmpegaGerling Investment GmbH remains unaffected by the rebranding and its products will continue to bear this name on the market going forward.

AmpegaGerling Asset Management GmbH – in cooperation with the subsidiary AmpegaGerling Investment GmbH – is chiefly responsible for handling the management and administration of Group companies’ securities portfolios and performs associated services such as investment bookkeeping and reporting. The company had assets under management of EUR 67.2 billion as at 31 December 2010, compared with a volume of EUR 59.9 billion at year-end 2009.

As an investment company, AmpegaGerling Investment GmbH administers public and special funds and performs financial portfolio management tasks for institutional clients. The emphasis is on portfolio management and the administration of investments for clients outside the Group. The company’s retail business fared highly successfully in 2010 thanks to significant cash inflows of EUR 738 million. The volume of public funds grew by EUR 0.9 billion year-on-year to EUR 3.5 billion. The company was thus able to purposefully enlarge this strategic subsegment. While the industry as a whole posted growth of 12% in the volume of public funds in 2010, AmpegaGerling generated a disproportionately vigorous increase of 33%. Looking at the sales trend in terms of distribution channels and customer segments, administrative business with label funds for external fund initiators proved to be the most crucial success factor. Another key sales area is the Group’s own unit-linked business based on insurance policies of this type. In addition to retail business, the company engages in institutional business with third-party clients and – on the basis of its available know-how profile – positions itself as an outsourcing partner for non-Group insurers. Existing mandates were enlarged by EUR 140 million in 2010.

The total volume of assets under management grew to EUR 14.7 billion, an increase of 11% relative to the level at the beginning of the year (EUR 13.3 billion). Of this total volume, more than half – specifically EUR 8.0 (7.7) billion – was administered on behalf of Group companies through special funds and direct investment mandates. The remaining portion was attributable to institutional third-party clients in an amount of EUR 3.4 (3.3) billion and retail business in an amount of EUR 3.3 (2.3) billion. The latter is offered both through the Group’s own sales channels and products such as unit-linked life insurance as well as through external asset managers and banks.

Assets of EUR 1.2 (2.4) billion were attributable to AmpegaGerling Immobilien Management GmbH as at 31. December 2010. The contraction in assets resulted from the transfer of mortgage portfolios to HDI-Gerling Lebensversicherung AG.

All in all, the volume of assets under management by all AmpegaGerling companies grew from EUR 75.5 billion to EUR 83.1 billion as at year-end 2010, of which EUR 74.5 billion was apportionable to Group companies and EUR 8.6 billion to business with third-party clients.

Protection Re – intermediary for reinsurance cessions

Protection Reinsurance Intermediaries AG (Protection Re), which is wholly owned by Talanx AG, is allocated to the Corporate Operations segment within the Talanx Group. In the course of the year Protection Re was also renamed and is now trading as Talanx Reinsurance Broker. The company serves as the professional reinsurance advisor and broker for reinsurance cessions (non-life business) of the Talanx Group. Its core business consists of providing primary insurers with comprehensive advice on all aspects of outward composite reinsurance. Protection Re handles the complete spectrum of the reinsurance business process for each Group cedant to the extent necessary in each particular case. From portfolio analysis and advising on the structuring of reinsurance programs to administration and run-off of the placed reinsurance arrangements, specialized teams develop and support viable solutions that help Group cedants to achieve their business objectives on a lasting basis.

The reinsurance capacities required for all Group cedants served by Protection Re were again successfully obtained for 2011 on the world market. The operating profit (EBIT) for 2010 totaled EUR 8 (12) million. The branch of Protection Re that was established in 2009 in London specifically for the purpose of placing the business of German cedants with reinsurance companies outside the European Union fulfilled the requirements placed on it in 2010 and contributed to the company’s good result.

Segment result driven by Talanx AG

The investment income and expenses in this segment encompass principally personnel and social expenditures for administration of the Group’s own investments and third-party portfolios. The amount recognized is therefore frequently negative, but this has no implications for the Group’s investment income. The latter is described below
in the subsections entitled “Assets and shareholders’ equity” and “Financial position”. The operating result (EBIT) of –EUR 315 (–26) million for the segment is overshadowed this year by the deficit posted by Talanx AG, which arose out of various contributions and provisions associated with indemnity commitments given to the segments Talanx Deutschland and Talanx International. They are for the most part connected with the merger of Aspecta Lebensversicherung into HDI-Gerling Lebensversicherung as well as the cessation of Aspecta’s new business activities in Luxembourg and Liechtenstein.