Notes on the consolidated balance sheet – assets

(2) Other intangible assets

 

Insurance-related intangible assets

Software

 

Purchased

Created Other 2010 2009 1)

Figures in EUR million

      

Gross book value at 31.12. of the previous year

2,785

357

110

42

3,294

3,162

Adjustment of values carried forward from prior years 2)

–89

5

–3

–87

Gross book value at 01.01. of the year under review

2,785

268

115

39

3,207

3,162

Change in consolidated group

4

Additions

29

8

33

70

193

Disposals

5

1

18

24

66

Reclassification

11

11

Other changes

6

6

1

Currency exchange rate differences

1

2

2

5

Gross book value at 31.12. of the year under review

2,792

305

122

56

3,275

3,294

       

Accumulated depreciation and accumulated impairment losses at 31.12. of the previous year

806

262

57

15

1,140

845

Adjustment of values carried forward from prior years 2)

–89

5

–3

–87

Accumulated depreciation and accumulated impairment losses at 01.01. of the year under review

806

173

62

12

1,053

845

Change in consolidated group

1

Additions

3

Disposals

3

2

5

33

Depreciation/amortization

      

Scheduled

318

34

9

5

366

245

Unscheduled

78

Reclassification

8

8

2

Other changes

1

Currency exchange rate differences

1

1

2

–2

Accumulated depreciation and accumulated impairment losses at 31.12. of the year under review

1,124

213

71

16

1,424

1,140

       

Balance at 31.12. of the previous year 1)

1,979

95

53

27

2,154

2,317

Balance at 31.12. of the year under review

1,668

92

51

40

1,851

2,154


1) Adjusted on the basis of IAS 8
2) The values carried forward were adjusted in connection with implementation of a new IT system; there were no implications for the carrying value

The “insurance-related intangible assets” derived principally from the insurance portfolios of the former Gerling Group acquired in 2006 (carrying value 2010: EUR 1.1 billion) and the portfolios of BHW Lebensversicherung AG (carrying value 2010: EUR 280 million) and PB Lebensversicherung AG (carrying value 2010: EUR 56 million) purchased in 2007 as well as from Neue Leben Lebensversicherung AG (carrying value 2010: EUR 100 million).

The addition of EUR 193 million recognized in the gross book value of the previous year relates – in an amount of EUR 104 million – to the present value of future profits (PVFP) carried in connection with Hannover Re’s acquisition of the ING life reinsurance portfolio. Scheduled amortization is taken on this insurance-related intangible asset over the term of the underlying reinsurance treaties in proportion to the future premium income. The period of amortization is 30 years.

Particularly due to scheduled depreciation and amortization, the insurance-related intangible assets decreased by EUR 311 million in the reporting period to EUR 1,668 million. Insofar as PVFPs are involved in the case of life insurance enterprises, these are capitalized and amortized across the period of the contracts (see also our remarks in the section “Accounting policies”, subsection “Summary of major accounting policies”).

The gross PVFP recognized is composed of a shareholders’ portion – on which deferred taxes are established – and a policyholders’ portion. It is capitalized in order to spread the charge to Group shareholders’ equity under IFRS upon acquisition of an insurance portfolio equally across future periods in step with the amortization. Only the amortization of the shareholders’ portion results in a charge to future earnings. The PVFP in favor of policyholders is recognized by life insurance companies that are obliged to enable their policyholders to participate in all results through the establishment of a provision for deferred premium refunds.

The breakdown of the PVFPs for the life insurance companies is shown in the table below:

PVFPs for life insurance companies

31.12.2010

31.12.2009 1)

Figures in EUR million

   

Shareholders’ portion

720

861

Policyholders’ portion

850

1,016

Balance

1,570

1,877


1) Adjusted on the basis of IAS 8

Of the depreciation/amortization on insurance-related intangible assets totaling EUR 318 million, an amount of EUR 152 million was attributable to the shareholders’ portion and EUR 166 million to the policyholders’ portion. The amortization on the shareholders’ portion is recognized in the statement of income in the item “Other technical expenses”.