Munich Re Group Annual Report 2006 (PDF, 1.8

Munich Re Group Annual Report 2006 Management report_Munich Re Group
Munich Re Group
Structure of the Munich Re Group
The Munich Re Group is one of the world’s leading risk
carriers. Our business covers the whole value-added chain
in insurance and reinsurance, and we are also active in the
field of asset management.
The reinsurance companies in our Group operate globally.
Our primary insurers traditionally concentrate on
Germany and European markets with strong growth, but
are now looking to extend their activities to high-potential
markets such as India. We conduct our business from our
respective headquarters and also via a large number of
branches, subsidiaries and affiliated companies in such
countries as the USA, China, India, Australia, South Africa,
Korea, Canada, the UK, France, Spain, Italy, Poland and
Switzerland. Control and profit transfer agreements are in
place with many subsidiaries, especially those in the ERGO
Insurance Group. As a result of a Group directive of 2005
governing the distribution of responsibilities and competencies
between Group management and ERGO for key
decisions, there is “unified control” within the meaning of
the German Stock Companies Act.
With a view to maintaining clearly defined strategic
management of the equal-ranking business segments of
primary insurance and reinsurance – and to providing for
a clear assignment of responsibility – the structure of
Munich Re’s Board of Management was altered with effect
from 1 January 2006. The Parent Board of Management,
which for legal purposes continues to represent Munich
Reinsurance Company externally, has divided its responsibilities
between two Board committees: the Group Committee
and the Reinsurance Committee.
This management report summarises the activities of
our Group according to the business fields of reinsurance,
primary insurance, asset management and their respective
segments, rather than on the basis of the Group’s legal or
corporate structure. Such segmentation is determined by
how we manage our business internally.
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Munich Re Group
Reinsurance
Asset management
Primary insurance
Reinsurance group
Of the gross premiums totalling €22.2bn written in 2006,
around 65.5% came from property-casualty and 34.5%
from life and health business.
According to our own estimates, Munich Re’s share of
the world market in terms of 2006 premium amounted to
around one-seventh. The market we refer to here is the
global reinsurance market, since reinsurance has by nature
always been an international business. It should be noted
in this context, however, that the global premium income
of the reinsurance markets is difficult to quantify because
data is insufficient or simply not available, while the market
statistics of individual countries are of limited comparability
as they are based on different parameters. What is
more, premium volume alone is not an adequate indicator
for assessing reinsurance companies’ importance in
particular markets.
Since 1 January 2007, our reinsurance business has
been organised into six operative divisions. Until 31 December
2006, there were seven: six servicing our propertycasualty
business and special lines, and one dealing with
life and health reinsurance. Responsibility for the respective
client accounts continues to lie in one pair of hands.
The operative divisions are also responsible for our business
units abroad, including our subsidiaries.
The division Life and Health underwrites our life and
health reinsurance business worldwide and its structure
reflects that of many of our clients, which conduct these
two classes of business separately from property-casualty
insurance, often through independent entities.
In Europe 1, we until recently managed the propertycasualty
business from our clients in Germany, Switzerland
and Austria, eastern Europe, Greece, and Turkey. With
effect from 1 January 2007, the division has been divided
and incorporated into the new units “Europe and Latin
America” and “Germany, Asia Pacific and Africa”.