Strategic objectives of Talanx

Capital management

The capital management of the Talanx Group is geared to an optimized risk-adequate capital structure in order to reinforce the Group’s financial strength.

This is achieved in two ways: firstly, we optimize the capital structure by using appropriate equity substitutes and financing instruments; secondly, we align our equity resources such that they at least meet the requirements of Standard & Poor’s capital model for an “AA” rating. Equity resources in excess of this requirement are established to boost our earnings potential above and beyond the return on reinvested funds, e.g. through improved provision of risk capacity and protection or through greater independence from reinsurance and retrocession markets.

Capital resources are, as a general principle, allocated to those areas that promise the highest risk-adjusted post-tax profit over the medium term. In this context we make allowance for the desired portfolio diversification and the required risk capital as well as the general regulatory framework. Allocation is based on the expected intrinsic value creation (IVC), arrived at from coordinated business plans.

In recent years Talanx AG has opened up to the capital market in order to be able to boost its financial strength even before going public. The next logical step as part of this progressive capital market orientation is an initial public offering (IPO) with the aim of placing a maximum 49.9 percent of the voting equity of Talanx AG on the stock market. This stock market flotation will be implemented by way of a capital increase in order to maximize the strengthening of our asset base and the resulting strategic options.