Annual Report 1997/1998 - Munich Re

Munich Re Report of the Board of Management
Direct insurance
The Munich Re Group has for many years included a number of
well-known German direct insurance companies, whose operations
focus on the especially promising lines of life and health business.
These subsidiaries contribute significantly to the stable development of
premium income and results by balancing our reinsurance business,
which is susceptible to stronger fluctuations.
1997 was a successful year for our direct insurers: nearly all the
companies improved their results; ERGO Versicherungsgruppe AG,
in which we have merged our interests in VICTORIA, Hamburg-
Mannheimer, DKV and D. A. S., made a good start.
Large increase in premium income to DM 19.6bn after changes in
consolidated group
Our direct insurance companies contributed a total of DM 19.6bn
(12.9bn) to the premium income of the Group in the year under review;
this was 52.3% more than in the previous year. Around 93% of the
premium derived from Germany and 7% from the rest of Europe.
In life insurance the growth rate was 23.4%, in health 151.2% and in
property-casualty 48.1%.
Gross premiums 1997 Previous year
DM m % DM m %
Life 9,475 48.4 7,679 59.8
Health 5,946 30.4 2,367 18.4
Property-casualty 4,157 21.2 2,806 21.8
Total 19,578 100.0 12,852 100.0
Of the increase of DM 6.7bn in gross premiums, DM 6.5bn is due to
the changes in the group of consolidated companies:
DKV has been fully consolidated this time. It contributed DM 5.6bn
(2.2bn) to the premium income.
We have consolidated the premium of VICTORIA and D. A. S. for the
first time, on a pro rata basis. This has added DM 3.6bn.
By contrast, Hermes has ceased to be a consolidated company.
In the previous year we had included only DM 0.5bn of its gross
premium on a pro rata basis.
Without these changes, premium growth would have been
around 2%.
The consolidated net premiums increased by 54.4% to DM 18.8bn
(12.2bn).
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