Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006
Profitably exploiting the value chain
In our international health market strategy, we have set
ourselves significant profit and growth targets. Our integrated
Group-wide approach is geared to covering the
profitable elements of the health segment’s value chain,
as well as possible, in selected regions. We aim to link the
different competences in our Group and respond to individual
market situations with specifically tailored business
models. Just over a year ago, we decided to coordinate all
our international health market activities Group-wide. In
this comparatively short time, we have launched a range of
initiatives, of which the following are a few examples: the
formation of Apollo DKV Insurance with a view to entering
the Indian health insurance market via a joint venture; the
application for a primary insurance licence in South Korea
in order to set up a local health insurer there; and the
development of a public health insurance system in Abu
Dhabi, thereby generating reinsurance business as well
as fixed management fees. With these and comparable
projects, we are implementing our health market strategy
and can report that we are making good progress.
All the initiatives mentioned here are based on our
“cardinal virtues”: excellent operative management at all
executive levels and outstanding administration processes
at both Group and business-field level. These virtues
require persistent striving to optimise and improve our
systems.
Clear management responsibility
At the beginning of 2006, we systematically divided responsibilities
on the parent company’s Board of Management
between Group issues and reinsurance business. This has
proved its worth: the “virtual holding company” that we
created in this way enables us to clearly distinguish between
the tasks of the Group Committee and responsibility
for the individual fields of business and to focus resources
on the respective core issues.
With our management and information systems, we
want to set standards and achieve a clear competitive
advantage. This means anchoring value-based management
even more firmly in all business fields and segments,
further refining integrated risk management and active
capital management, and supporting our operative business
with effective administration and underwriting systems.
We took a major step in this direction last year with
the launch of Gloria, our global reinsurance core administration
system. Starting with our Munich location, this new
standard software provides for a high degree of process
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Munich Re Group in 2006_Strategy
efficiency and flexibility, and will leverage Group-wide
synergies.
Knowledge counts
Even more important for our success than excellent
processes is outstanding knowledge and its practical
application in competing for business. Maintaining and
constantly expanding our staff’s knowledge is the crucial
challenge for the future. This applies not only to the knowhow
available in our organisation with regard to risks,
underwriting and clients, but also to leadership skills and
management expertise. We therefore devote great attention
to promoting, consolidating and expanding knowledge
both in our staff development activities and through
the design of our organisational structures. We ensure that
expertise is suitably pooled and concentrated at those
places in the Group where it can best be deployed to create
value.
In 2007, we will continue to pursue our strategic objectives
with perseverance and determination. Our “cardinal
virtues” – risk as our core business, risk diversification and
operative excellence – will guide our actions. We are impatient
when it comes to innovation, but we will not let ourselves
be rushed into taking unconsidered steps. By combining
the above qualities, we aim to achieve ambitious
results on a sustained basis and to continually build on
them, thus satisfying our shareholders’ interest in the
long-term appreciation of the Munich Re Group’s value.