Profit target
The Talanx Group targets a long-term above-average profitability level. The measure for this is the Group’s return on equity in accordance with IFRS.
We compare ourselves with the 20 largest insurance companies in Europe. The minimum target of our Group, in relation to consolidated net profit after taxes and minority interests is the return on equity in accordance with IFRS, 750 basis points above the average risk-free interest rate. The average risk-free interest rate is defined as the average yield over the last five years for a 10-year German government bond.
Based on this profit target we set targets in order to steer the operating divisions.
We use “value-based controlling” as an instrument for achieving our objectives. An intrinsic value added is measured by the core controlling parameter IVC (Intrinsic Value Creation) which compares the economic result for the accounting period with the cost of capital. The minimum requirement for each division is to achieve its cost of capital which is derived from value-based controlling.
Talanx AG ensures that all the divisions’ individual income targets meet the Group’s defined minimum return on equity target.
We envisage distributing an attractive and competitive dividend to our shareholders. Thereby, a strengthening of the capital base will be taken into account – if necessary.
– We pursue long-term, above-average profitability –
> Capital management
