Capital management
Capital management at the Talanx Group is directed towards an optimized, risk-adequate capital structure and towards the preservation of our financial strength.
A strong capital base strengthens the resilience against short-term developments of insurance and capital markets. The assignment of the capital management is to optimize capital efficiency at the Group companies and to fulfil the liquidity and capital requirements of the Group and Talanx AG.
To meet this goal, we use equity capital, equity capital substitutes and finance instruments to optimize the capital structure. We structure the capital in such a way that it meets the minimum requirements of Standard & Poor’s capital model for an “AA” rating.
Additional capital is retained only if the earnings potential is increased by more than the yield on the additionally retained capital, e.g. by improving risk taking capacity and risk cover or by a higher level of independence from the reinsurance/retrocession markets.
Divisions with the highest expected risk-adjusted income after tax are prioritized in the capital allocation process. The intended portfolio diversification and the required risk capital are taken into account. The allocation is carried out based on the expected Intrinsic Value Creation (IVC).
– We continuously optimize our capital structure –
– We deploy our resources in order to best target our objectives –
> Opportunity and risk management
