Strategy
The corporate policy background
The Talanx Group is an internationally operating German insurance conglomerate and a leading player in Europe. It comprises both primary insurance and reinsurance companies and operates in both property/casualty and in life insurance business.
At the Talanx Group, we optimize the interplay of insurance and reinsurance as an integral component of our business model with the aim of consistently enhancing our opportunity/risk profile and improving our capital efficiency. The composition of the Group portfolio ensures that even in difficult market phases Talanx has sufficient independent risk capacities at its disposal to support its clients reliably over the long term, to tap into interesting markets and, in doing so, to safeguard our independence and enhance the ongoing success of the Group for investors, clients, staff and other stakeholders.
The principle on which the Talanx Group is organized centralizes the Group steering functions and concentrates the Group service functions while delegating responsibility for operating results to the local divisions.
Strategic objectives of Talanx
Our corporate policy and its paramount strategic objectives focus on reliable continuity, financial strength and sustainable profitable growth and are thus geared towards creating and increasing value in the long term. This guiding principle is the basis from which all other Group goals are derived.
Our business model concentrates especially on developing our markets together with our professional partners.
Profit target
Measured in terms of our return on equity under IFRS, we seek to achieve above-average profitability in a comparison with the 20 largest insurance companies in Europe.
Our target is an IFRS return on equity at least 750 basis points in excess of the average risk-free interest rate.
Capital management
The Group's equity resources are intended to meet at least the requirements of Standard & Poor’s capital model for an AA rating.
We optimize our capital structure by using equity, appropriate equity substitutes and financing instruments.
Risk management
Talanx AG monitors and controls the risk situation within the Group and the Group companies in detail. It pursues the dual aim of avoiding developments that could jeopardize the Group's survival while at the same time taking advantage of opportunities as they arise. Our paramount objective is to stick to our defined risk situation on the basis of risk budgets. The criteria for this are: parameters:
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a probability of 90% for earning a positive IFRS result for the year .
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our economic capital base must be able to withstand at least an aggregate 3000-year shock (probability of ruin).
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investment risks in the Group should be limited to below 50% of the overall risk capital requirement.
Growth target
In the Talanx Group we strive for sustainable profitable growth.
We are focusing on above-average growth especially in Industrial and international Retail insurance (target regions in Retail: Latin America and Central and Eastern Europe). We aim to achieve this through organic growth and acquisitions.
Our aim in the long term is for the proportion of gross premium from primary insurance (Industrial lines and Retail) generated outside Germany to account for half of the total gross premium volume in primary insurance.
In German Retail-business we want to improve our profitability and achieve focused growth.
As a long-standing shareholder in Hannover Re, we aim to strengthen and selectively expand its position as a global player.
Human resources policy
Strategic development and advancement of our staff is of crucial importance to achieving our Group's objectives.
Personnel management aims to promote a high sense of responsibility and entrepreneurial thinking and acting, accompanied by a risk-focused performance culture.
Management vacancies are preferably filled with in-house staff who have gone through tailored qualification programmes.