R+V Versicherung AG Annual Report
R+V Versicherung AG Annual Report
R+V Versicherung AG Annual Report
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2002<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong><br />
<strong>Annual</strong> <strong>Report</strong><br />
Taunusstraße 1, 65193 Wiesbaden, Germany, Tel. +49 (0) 611 533-0<br />
Registered at the Magistrates’ Court Wiesbaden No. HRB 7934<br />
Presented to the Ordinary General Meeting on May 21, 2003
<strong>R+V</strong> Group<br />
Simplified presentation<br />
<strong>R+V</strong> Consolidated Group<br />
KRAV<strong>AG</strong>-<br />
LOGISTIC<br />
<strong>Versicherung</strong>s-<br />
<strong>AG</strong><br />
Domestic<br />
Companies<br />
<strong>R+V</strong> at a Glance<br />
KRAV<strong>AG</strong>-<br />
ALLGEMEINE<br />
<strong>Versicherung</strong>s-<br />
<strong>AG</strong><br />
<strong>R+V</strong><br />
Poistóvna<br />
a.s.,<br />
Slovakia<br />
International<br />
Companies<br />
2<br />
<strong>R+V</strong><br />
Komposit<br />
Holding<br />
GmbH<br />
<strong>R+V</strong><br />
Allgemeine<br />
<strong>Versicherung</strong><br />
<strong>AG</strong><br />
KU Filar<br />
S.A.,<br />
Poland<br />
<strong>R+V</strong><br />
Rechtsschutzversicherung<br />
<strong>AG</strong><br />
Assimoco<br />
S.p.A.,<br />
Italy<br />
Vereinigte<br />
Tierversicherung<br />
a. G.<br />
<strong>R+V</strong><br />
<strong>Versicherung</strong><br />
<strong>AG</strong><br />
<strong>R+V</strong><br />
Lebensversicherung<br />
<strong>AG</strong><br />
Assimoco Vita<br />
S.p.A.,<br />
Italy<br />
<strong>R+V</strong><br />
Pensionsversicherung<br />
a. G.<br />
<strong>R+V</strong><br />
Personen<br />
Holding<br />
GmbH<br />
<strong>R+V</strong><br />
Pensionsfonds<br />
<strong>AG</strong><br />
<strong>R+V</strong><br />
Luxembourg<br />
Lebensversicherung<br />
S.A.<br />
<strong>R+V</strong><br />
Lebensversicherung<br />
a. G.<br />
<strong>R+V</strong><br />
Krankenversicherung<br />
<strong>AG</strong><br />
<strong>R+V</strong> Consolidated Group <strong>R+V</strong> Group<br />
2002 2001 2002 2001<br />
Gross premiums written € million 6,700 6,332 6,893 6,523<br />
Premiums resulting from bonus<br />
and rebate provision € million 252 320 282 355<br />
€ million 6,952 6,652 7,175 6,878<br />
Gross claims incurred € million 4,999 4,503 5,108 4,608<br />
Current investment income € million 2,089 1,864 2,215 2,000<br />
Investments € million 33,494 31,372 35,697 33,594<br />
Number of policies million 15.6 15.2 16.2 15.9<br />
Number of employees as at 31. 12. 10,675 10,748 11,642 11,664
Content<br />
Management <strong>Report</strong> 4<br />
Proposal on the Appropriation of Profits 32<br />
<strong>Annual</strong> Financial Statements 2002<br />
Balance Sheet 34<br />
Income Statement 38<br />
Notes<br />
Accounting policies 41<br />
List of Shareholdings 44<br />
Notes to the Balance Sheet 46<br />
Notes to the Income Statement 50<br />
Other Information 51<br />
Auditors’ <strong>Report</strong> 54<br />
<strong>Report</strong> of the Supervisory Board 55<br />
3
Management <strong>Report</strong><br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> acts as both the<br />
parent company of the <strong>R+V</strong> Group and the<br />
reinsurer for the Group’s direct insurance<br />
companies. <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> also<br />
operates independently on the international<br />
reinsurance market. The reinsurance business<br />
is primarily run from the head office in<br />
Wiesbaden, Germany. The Group’s interests<br />
in Southeast Asia are managed by its<br />
Singapore branch, which was established<br />
in 1997.<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>’s 2002 annual<br />
financial statements include all reinsurance<br />
business assumed from the <strong>R+V</strong> Group<br />
companies in the 2002 calendar year. In<br />
contrast, reporting of the majority of business<br />
assumed from other domestic and<br />
foreign cedents is deferred by one year and<br />
therefore relates to calendar year 2001.<br />
Investment income as well as all other<br />
income and expenses relate to calendar<br />
year 2002.<br />
Development of the economy as a whole<br />
and the German insurance sector<br />
Developments in economic growth and<br />
employment, income and pensions gave<br />
little cause for optimism. The silver lining<br />
discernible on the economic horizon in<br />
early 2002 was soon replaced with a badweather<br />
front. With the increase in its real<br />
gross domestic product barely exceeding<br />
0.2% in 2002, Germany had the lowest<br />
growth rate in the whole of the EU. There is<br />
no turnaround in sight for the labor market,<br />
and the ability of the state to financial<br />
public social security systems is the subject<br />
of ongoing controversy. The national debt<br />
rose continuously last year, placing further<br />
restrictions on public services, especially<br />
in the social sector. Tax increases forced<br />
private households to cut back on consumption,<br />
while the investment climate<br />
for companies deteriorated.<br />
4<br />
The dramatic slump on the global capital<br />
markets further accelerated the economic<br />
downturn. The stock market boom of the<br />
1990s has definitely come to an end, and<br />
the bear market visibly impacted the results<br />
of the entire financial services sector.<br />
This less than encouraging economic situation<br />
was matched by the political climate.<br />
Terrorist attacks worldwide, such as those<br />
in Jerba and Bali, created an atmosphere<br />
of tension. The explosive situation in the<br />
Middle East and the threat of a military<br />
conflict between the US and Iraq created<br />
uncertainty and put a considerable damper<br />
on economic activity.<br />
As if all this weren’t enough, devastating<br />
natural disasters plagued people around the<br />
world in ever-shorter intervals. August’s<br />
flooding in the new federal German states<br />
robbed many people of their livelihood.<br />
The Aufbau Ost program to rebuild Eastern<br />
Germany, which had just been concluded,<br />
will have to start all over again in these<br />
regions.<br />
Sectoral growth of 4.1% despite<br />
numerous adversities<br />
The weak economy, the stock market<br />
slump and the results of the natural<br />
disasters are also mirrored in the development<br />
of the insurance sector during 2002.<br />
However, because insurance provides a<br />
sense of stability and security in times of<br />
turmoil, the industry was able to maintain<br />
its growth course despite all adversities and<br />
risks: the premium income collected by<br />
direct insurers grew by 4.1% to €141.0<br />
billion. As in the previous year, this positive<br />
growth was largely driven by life insurance.
However, the significant increase in private<br />
health insurance also made an encouraging<br />
contribution to the growth of the entire<br />
sector. This means that the insurance<br />
industry is still enjoying above-average<br />
growth rates, even though the potential for<br />
growth has steadily contracted in recent<br />
years.<br />
The premium income recorded in all insurance<br />
classes is offset by payments or<br />
claims expenses of €158.7 billion, an<br />
increase of 6.2%. At 10.2%, the increase<br />
in the number of property and casualty<br />
insurance claims was highest. Natural<br />
disasters and a concentration of large<br />
claims in the past year had a dramatic<br />
effect on property insurance in particular.<br />
The flood of the century in the new federal<br />
German states alone depressed earnings<br />
by €1.8 billion. In addition, the stock market<br />
slump has greatly reduced the possibility<br />
of offsetting technical losses with positive<br />
investment income.<br />
Encouraging developments in life and<br />
health insurance<br />
The following trends and prospects are<br />
emerging in the most important insurance<br />
classes: life insurance is demonstrating<br />
strong growth in new business, solid premium<br />
growth, a definite upward trend in total<br />
policies outstanding and increasing benefit<br />
payments. New business developed very<br />
positively, with around 10.2 million new<br />
policies sold in 2002, an increase of 20.4%.<br />
Pension insurance rocketed with growth<br />
of 125%, or 3.3 million new policies.<br />
5<br />
Life insurers saw their gross premium<br />
income increase by 4.3% to €65.1 billion.<br />
Their payments rose to a total of €85.7<br />
billion, of which €55.1 billion went directly<br />
to customers and €30.6 billion to benefit<br />
reserves. This extremely satisfactory result<br />
shows that modern, up-to-date versions of<br />
traditional life insurance are a “safe bet” for<br />
retirement provision in times of uncertain<br />
stock market development dominated by<br />
substantial price losses. On top of this, the<br />
new subsidization provided for by the<br />
Altersvermögensgesetz (German Retirement<br />
Savings Act) created an additional impetus,<br />
with over 2.9 million retirement pension<br />
policies being sold under this Act.<br />
Private health insurance, the second-largest<br />
type of personal insurance, also recorded<br />
above-average growth for the sector in<br />
2002 with an increase in premium income<br />
of 6.4% to €23.1 billion. Comprehensive<br />
and additional health insurance accounted<br />
for €21.1 billion, rising 6.8%, and compulsory<br />
long-term care insurance for €2.0<br />
billion, up 2.3%. The strong increase in<br />
premium income is principally due to the<br />
large number of new members, with<br />
approximately 221,000 people switching<br />
from public to private health insurance. In<br />
line with the general trend in the healthcare<br />
sector, expenses for benefits paid to<br />
holders of health and compulsory long-term<br />
care insurance policies also rose in the<br />
private health insurance sector by 5.5% to<br />
€15.2 billion.
A difficult year for property insurers<br />
For property and casualty insurers, 2002<br />
was principally marked by a sharp rise in<br />
claims expenses. Fierce spring storms, the<br />
flooding of the Elbe and its tributaries, the<br />
fall storm “Jeanette” and numerous large<br />
claims resulted in heavy losses and a<br />
combined ratio of over 100% in a number<br />
of insurance classes. In addition, the stiff<br />
competition in particular segments of<br />
property and casualty insurance prevented<br />
insurers from changing premiums that<br />
covered their costs. Given the current stock<br />
market environment, it is highly unlikely that<br />
the technical losses can be offset with<br />
investment income.<br />
On the whole, claims expenses in property<br />
and casualty insurance during the fiscal<br />
year rose by 10.2% to €44.3 billion.<br />
Premium income, however, improved by a<br />
mere 2.8% to €51.1 billion. As in the past,<br />
motor vehicle insurance – the largest<br />
branch of property insurance – accounted<br />
for this growth. With premium income of<br />
€21.9 billion, this 2.9% increase is nevertheless<br />
considerably lower than in the<br />
previous year (up 4.8% in 2001). This figure<br />
is offset by an expected technical loss of<br />
€0.5 billion, principally due to the large<br />
number of storms in the first half of the year<br />
and last summer’s flood disaster. Full cover<br />
insurance was the main contributor to this<br />
loss, which rose by €270 million to €400<br />
million. Partial cover insurance recorded a<br />
loss of over €50 million down from a positive<br />
€168 million in the previous year.<br />
Losses from motor vehicle liability insurance<br />
fell by €150 million to €476 million.<br />
6<br />
General property insurance recorded a<br />
slight increase of somewhat over 1%, with<br />
premium income of €9.4 billion. In contrast,<br />
claims expenses rose by close on 47.0% to<br />
€8.5 billion. Fierce premium competition in<br />
the commercial area and in comprehensive<br />
residential insurance in particular resulted in<br />
heavy losses. Industrial property insurance<br />
fared no better: the high combined ratio<br />
of 128% (due to an increase in claims<br />
expenses of 21.3% to €3.8 billion) offset<br />
the encouraging premium increase of<br />
12.3% to €3.4 billion. This higher premium<br />
income results from the systematic implementation<br />
of restructuring measures in<br />
this class, giving rise to hope of further<br />
improvements. The situation in the marine<br />
insurance sector also remains strained,<br />
with the combined ratio standing at 126%.<br />
Premium income improved by 3.0% to<br />
€1.8 billion. General liability insurance<br />
demonstrated a slight growth in premium<br />
income of 1% to €6.0 billion. The situation<br />
in private accident insurance is much<br />
healthier; here, premium income rose by<br />
1.5% to €5.6 billion, while claims expenses<br />
increased by a mere 0.5% to €2.5 billion.<br />
This puts the loss ratio at a positive 54.0%,<br />
almost unchanged on the previous year.<br />
Legal insurers also boosted their premium<br />
income by 1% in the past fiscal year to<br />
€2.7 billion, while claims expenses rose<br />
by 2.0% to around €2 billion.
Developments on the international<br />
reinsurance markets<br />
Business assumed from cedents outside<br />
the <strong>R+V</strong> Group was affected by developments<br />
on the international reinsurance markets.<br />
Because most property and casualty<br />
insurance business is deferred by one year,<br />
the following paragraphs primarily present<br />
the situation as it was in calendar year<br />
2001.<br />
Economic environment<br />
The contraction of the global economy in<br />
the middle of the year accelerated in the<br />
course of 2001, with the rate of expansion<br />
slowing substantially in almost all countries<br />
and regions. A major factor in this development<br />
was that the strong boom in the US,<br />
which had long functioned as the motor for<br />
the global economy, came to an abrupt<br />
end. The downturn quickly spread to the<br />
rest of the world via a crash in stock market<br />
prices, deterioration in sentiment among<br />
companies and finally a contraction in trading<br />
activity.<br />
This slowdown was triggered by two key<br />
factors. The preceding increase in crude oil<br />
prices curbed economies almost everywhere<br />
and fears of inflation took hold,<br />
resulting in a tightening of monetary policy<br />
in key countries. The slump was further<br />
accelerated by the downturn in the IT<br />
sector. Whereas massive investments in this<br />
area had accelerated growth in many parts<br />
of the world up to mid-2000, the slump in<br />
this sector accelerated the economy’s<br />
downturn. This extraordinary development<br />
was another reason why forecasts for<br />
numerous countries had to be revised<br />
downwards in the course of the year – even<br />
before the events of September 11.<br />
7<br />
However, in the early summer of 2001, the<br />
first indications emerged that the downturn<br />
would not continue in the same form as in<br />
the past and that a recession was therefore<br />
not in sight. The business climate brightened,<br />
both in the US and in the euro-zone,<br />
due to the improvement in underlying<br />
economic conditions and the fact that<br />
the global raw materials markets were<br />
showing signs of relaxation. At this time,<br />
the economy appeared to have bottomed<br />
out and it seemed that a recovery was on<br />
the cards for the last quarter of the year.<br />
These hopes were dashed by the events<br />
of September 11.<br />
International reinsurers had never been so<br />
affected by one single event in any previous<br />
year. The terrorist attacks in the US on<br />
September 11 resulted in the largest single<br />
insurance claim in insurance history – at<br />
least USD50 billion. The insurance claim<br />
from Hurricane Andrew, which had broken<br />
all records up to then, amounted to only<br />
half of the sum payable as a result of the<br />
terrorist attack on the World Trade Center.<br />
This puts the extent to which the insurance<br />
sector was affected in fiscal 2001 into perspective,<br />
but also highlights the enormous<br />
capacity of the direct insurance and reinsurance<br />
sector to cope with such a once-in-acentury<br />
event.<br />
This extraordinary event and the complexity<br />
of the related claims created uncertainty<br />
and led to a review of risk exposure in the<br />
entire insurance sector. The face of the<br />
insurance market changed dramatically as a<br />
result. Direct insurance policies increased<br />
almost across the board, reinsurance<br />
capacity declined and cover for terrorism<br />
risks in commercial and industrial sectors<br />
became almost impossible to come by.
Apart from the extraordinary burden of the<br />
terrorist attacks in the US, 2001 also saw<br />
a large number of large claims. These<br />
included the explosion at a fertilizer plant<br />
near Toulouse/France, the earthquake in<br />
El Salvador, tropical storm “Alison” in the<br />
southern US, typhoon “Nasi” in Taiwan and<br />
the total loss of the “Petrobras” oil platform<br />
off the coast of Brazil.<br />
Western Europe<br />
Growth in industrialized countries of<br />
Western Europe declined to an extent not<br />
seen since the beginning of the 1990s.<br />
While the Japanese economy once again<br />
slid into recession, the economy in the<br />
European Union continued to grow for a<br />
time; nevertheless these countries were<br />
increasingly caught up in the global economic<br />
downturn. Of the large countries, the<br />
UK was the only economy that remained<br />
robust. International trade declined, leading<br />
to a correspondingly pronounced downturn<br />
in industry. While private consumption<br />
remained robust in many cases, corporate<br />
investment generally declined. The labor<br />
market did not remain unscathed either,<br />
with the slight improvements previously<br />
seen tailing off again.<br />
Inflationary trends which had increased in<br />
2000 and were ultimately responsible for<br />
the central banks’ restrictive measures,<br />
weakened in 2001, partly thanks to the<br />
drop in oil prices. The core inflation rate<br />
remained persistently high, however.<br />
8<br />
Monetary policy was relaxed during the<br />
course of the year in reaction to the economic<br />
slump. Interest rates were lowered<br />
once again in a concerted effort following<br />
the terrorist attacks in the US. All in all, the<br />
central banks were on a clearly expansionary<br />
course, while financial policy was relatively<br />
restrained.<br />
In terms of exports, countries which had<br />
specialized in IT products suffered the<br />
greatest setbacks, losing global market<br />
share. Finland, which had reported export<br />
growth of up to 20% in the previous year,<br />
posted a decline in exports in the year<br />
under review. What was surprising was that<br />
trade within the European Union declined at<br />
times, even though domestic demand<br />
expanded in most member states.<br />
Exports and imports in the majority of<br />
countries and regions generally developed<br />
along the same lines, especially since economic<br />
development was surprisingly parallel,<br />
both in relation to the strong upswing<br />
until mid-2000 and to the downturn. Since<br />
exchange rates hardly fluctuated, the<br />
balance of trade and balance of payments<br />
for the individual countries changed very<br />
little overall.<br />
The European insurance markets bottomed<br />
out at the beginning of the year under<br />
review and direct insurance rates began to<br />
develop positively again in a number of<br />
markets. However, these increases were<br />
unable to offset claims losses, which<br />
remained unsatisfactory. The impact of<br />
large claims remained moderate in the first<br />
half of the year, with the main events being<br />
the sinking of the oil platform off the<br />
Brazilian coast and tropical storm “Alison”<br />
which led to severe flooding in the southwest<br />
of the US.
However, the events of September 11<br />
brought the positive development of this<br />
segment to a sudden halt. The largest<br />
insurance claim of all time did not just result<br />
in technical losses at a number of major<br />
direct insurers and reinsurers, it also<br />
brought the capital markets down with it.<br />
The second half of 2001 suffered further<br />
blows in the form of numerous large industrial<br />
claims such as the explosion of a fertilizer<br />
plant near Toulouse/France and the<br />
explosion at a steelworks in Wales. In contrast,<br />
the number of claims arising from natural<br />
disasters in the year under review was<br />
low.<br />
Central and Eastern Europe<br />
The Central and Eastern European market<br />
is currently undergoing radical reform. The<br />
contraction of the global economy was<br />
scarcely felt in the Central European and<br />
Baltic states, due in particular to the efforts<br />
of those countries hoping to join the EU.<br />
The upward trend of the past year remained<br />
largely constant, driven by strong domestic<br />
demand. Poland was the exception, with<br />
the economy experiencing a considerable<br />
cooling-off on account of the restrictive<br />
rates set by its central bank. This led to<br />
stagnation, in contrast to the high growth<br />
rates of previous years.<br />
9<br />
Most countries in Central and Eastern<br />
Europe benefited from the rapid progress<br />
of the economic reforms and privatization<br />
measures, which have made them less<br />
susceptible to negative effects from abroad.<br />
In addition, the extremely high deficits in<br />
the balance of payments of some of these<br />
countries had little impact as they were still<br />
matched by a high inflow of foreign direct<br />
investors. The level of foreign debt was<br />
correspondingly low, and exchange rates<br />
generally stable.<br />
Russia did surprisingly well once more, with<br />
its growth rate increasing in the course of<br />
the year. The national budget situation<br />
eased and the foreign debt problem also<br />
declined as a result of the extremely high<br />
balance of payment surplus. Investment in<br />
the private sector also surged for the third<br />
year in a row.<br />
The other CIS states also presented<br />
astonishingly good results. After what<br />
was for some a prolonged lean period<br />
with sluggish growth or even slumps in<br />
production, real GDP (gross domestic<br />
product) increased throughout the region.<br />
The reinsurance market developed positively<br />
in the past fiscal year. In 2001, Russian<br />
insurance companies alone collected<br />
approximately 276 billion roubles (€10.4<br />
billion), 62% more in premiums than in the<br />
previous year. The market in general began<br />
to harden, pushing up rates substantially in<br />
certain sub classes, especially for disaster<br />
cover.
North America<br />
Growth by the US economy had weakened<br />
substantially by mid-2001, and the expected<br />
recovery now did not materialize. Rather,<br />
signs of improvement were quashed by<br />
the terrorist attacks on September 11.<br />
Manufacturing industry was affected particularly<br />
badly by the downturn. Production<br />
declined 6% as against mid-2000 and<br />
capacity fell to its lowest level in two<br />
decades. The IT sector in particular cut<br />
back heavily on production.<br />
Almost all demand components were<br />
affected by the decline. The downturn in<br />
corporate investment, which had rocketed<br />
during the investment boom, was particularly<br />
pronounced. From the beginning of the<br />
year onwards, double-digit decreases were<br />
recorded, due both to poorer sales<br />
prospects and to slashed profit margins.<br />
Companies’ inventories were also dramatically<br />
reduced. In contrast, private consumption<br />
continued to climb until the very<br />
end, even though it, too, lost momentum.<br />
Investment in housing also expanded,<br />
aided by the Federal Reserve’s interest rate<br />
cuts. The weak foreign economic climate<br />
reduced North American exports. However,<br />
since imports also dropped substantially<br />
and the terms of trade improved, the balance<br />
of payments deficit improved for the<br />
first time in ten years.<br />
The labor market now felt the full force of<br />
the economic downturn. Unemployment<br />
figures began to rise rapidly, peaking in<br />
October following the terrorist attacks on<br />
the World Trade Center on September 11.<br />
After the US insurance sector had suffered<br />
entirely unsatisfactory premium levels and<br />
high claims expenses in 1998 and 1999,<br />
direct insurers and reinsurers began raising<br />
rates again in 2000.<br />
10<br />
However, in the year under review, these<br />
price increases were insufficient to improve<br />
the earnings situation in the long term.<br />
A number of players on both the direct<br />
insurance and the reinsurance market either<br />
withdrew from the business due to unsatisfactory<br />
earnings or were forced to restructure<br />
their operations.<br />
The attack on the World Trade Center<br />
on September 11, 2001 left the insurance<br />
sector facing the single largest claim in its<br />
history – estimates put it at USD50 billion at<br />
least. However, even before the terrorist<br />
attacks, the combined ratio of many market<br />
players already exceeded 120%. Following<br />
the events of September 11, loss ratios<br />
shot up once more, resulting in a bleak year<br />
for the insurance sector.<br />
Latin America<br />
In 2000, Latin America had recovered from<br />
the preceding period of stagnation, with<br />
almost all countries achieving a substantial<br />
increase in real GDP. The downturn in the<br />
global economy hit the region hard, and<br />
overall economic output fell in many countries<br />
in 2001. Mexico was worst affected by<br />
the slump, as demand from the US – its<br />
most important trading partner – dropped<br />
sharply. Other countries were also impacted<br />
by the fall in crude oil prices, which resulted<br />
in a worsening of their terms of trade.<br />
These external shocks hit the countries<br />
before their foreign trade position had had<br />
time to become consolidated. As a consequence,<br />
their balance of payments deficits<br />
remained at a high level, and foreign debt<br />
rose. The problem was aggravated by<br />
capital outflows, as the political situation<br />
was also unstable in some countries, particularly<br />
in Argentina. Unresolved budgetary<br />
problems added to the difficulties and, last<br />
but not least, the currencies of several<br />
countries came under pressure.
As a result of the relatively poor capitalization<br />
of many direct insurers and Latin<br />
America’s high frequency of natural disasters,<br />
the fire insurance class together<br />
with its supplementary elemental risks are<br />
heavily reinsured. After a phase of immense<br />
pressure on reinsurance conditions and<br />
correspondingly poor results, claim events<br />
initiated a market turnaround. The high<br />
costs incurred in the previous year by the<br />
storms “Mitch” and “Georges”, as well as<br />
flooding in Venezuela and the earthquake<br />
in Columbia, led to an increase in original<br />
premiums and paved the way for improved<br />
reinsurance conditions. The growth of these<br />
markets was severely restricted by the economic<br />
recession, however.<br />
Asia<br />
Southeast Asia started to experience an<br />
economic downturn in mid-2000 which<br />
snowballed during 2001. Real gross domestic<br />
product even fell at times in many countries.<br />
Only in China did overall economic<br />
production continue to expand at more or<br />
less the same speed. Taking the official<br />
statistics as a yardstick, real GDP has now<br />
been increasing at between 7% and 8%<br />
per year for many years, regardless of the<br />
performance of the global economy. In the<br />
other countries, the weakness in the US,<br />
Japanese and EU economies became<br />
increasingly apparent, with the result that<br />
exports collapsed in numerous cases. The<br />
setback in the IT sector had an even more<br />
critical impact, however. Many countries<br />
had specialized very heavily in such<br />
products, and for years their exports had<br />
benefited from the global boom; by the end,<br />
IT products had made up around a quarter<br />
of their total goods exports on average.<br />
11<br />
Consequently, the region – and especially<br />
Singapore, Malaysia and Taiwan – was<br />
extremely hard hit by the downturn in the<br />
market. In other countries which had not<br />
concentrated quite so heavily on IT products,<br />
such as South Korea and Thailand,<br />
vigorous expansion in domestic demand<br />
helped offset the weak exports.<br />
While exports fell much more sharply than<br />
imports throughout practically the whole<br />
region, the majority of Southeast Asian<br />
countries still recorded a sizeable balance<br />
of payments surplus. This reduced the<br />
risk that external economic shocks would<br />
trigger a crisis as in 1998. Another point in<br />
their favor was that inflation was low in all<br />
countries except Indonesia, which meant<br />
that the central banks were able to react to<br />
the economic downturn by relaxing their<br />
monetary policy.<br />
Like the Japanese economy as a whole,<br />
the Japanese insurance sector experienced<br />
difficulties. Life insurers were faced with<br />
major challenges due to the strained situation<br />
on the capital markets. Property and<br />
casualty insurers were forced to adapt to<br />
the consequences of deregulation.<br />
After the direct insurance market in Taiwan<br />
had developed extremely satisfactorily in<br />
2000, the fiscal year under review was<br />
characterized by stiff competition. This led<br />
to declining original rates in key insurance<br />
classes.<br />
China joined the World Trade Organization<br />
(WTO) and issued clear guidelines for<br />
regulatory approval of foreign insurance<br />
companies.
Asia remained affected by the financial<br />
crises of the 1990s. Brisk competition<br />
among market players kept direct insurance<br />
premiums at a low level. Only in Malaysia<br />
and Thailand were rates in the motor insurance<br />
class adjusted upwards after declining<br />
for many years.<br />
Australia/New Zealand<br />
In Australia, the situation on the most<br />
important sales markets showed no signs<br />
of recovery. At 1.7% of GDP, the balance of<br />
payments deficit reached its lowest point<br />
since 1980. Only the construction industry<br />
contributed more than average to economic<br />
growth thanks to generous government<br />
subsidies.<br />
The insolvency of the insurance group<br />
HIH was the most important event on the<br />
Australian insurance market in the past<br />
fiscal year. However, this also spurred a<br />
recovery in rates and conditions in a number<br />
of insurance classes and speeded up<br />
market consolidation. At the end of the year<br />
under review, certain types of liability cover,<br />
e.g. medical liability, were taken over by the<br />
government, since physicians were unable<br />
to meet the premium increases demanded.<br />
The bush fires which raged in the vicinity<br />
of Sydney from Christmas until around<br />
January 8, 2002 were the largest claim<br />
event for the insurance sector, although this<br />
did not affect us to any significant extent.<br />
New Zealand’s economy was strongly<br />
driven by domestic demand and the real<br />
estate boom. Private consumer spending<br />
rose 1.4% in the last quarter of the year,<br />
corresponding to annual growth of 3.5%.<br />
Demand developed particularly well in the<br />
motor vehicle and real estate sectors.<br />
12<br />
Africa<br />
In African countries economic growth<br />
continued almost unchanged during the<br />
year under review, even though the external<br />
economic shocks took their toll on this<br />
continent too. Africa also felt the effect of<br />
the weak global economy. The declining<br />
raw materials prices had a serious impact<br />
on most countries’ economies. This<br />
development was partly cyclical, as on<br />
the metals market, but in some cases the<br />
changes were much more drastic; coffee<br />
and tobacco prices both collapsed, for<br />
example. As this pushed down exports, the<br />
balance of payments deficit remained high<br />
in most cases. Only oil-producing countries<br />
such as Algeria recorded high surpluses.<br />
Despite the negative development in the<br />
terms of trade and the negative effects this<br />
had on the economy, domestic demand<br />
remained robust. Economic policy progressed<br />
in terms of macroeconomic stability<br />
in almost all countries, with private<br />
investment rising. Countries experiencing<br />
political turbulence were the exception;<br />
output in Zimbabwe, for example, took a<br />
nosedive and inflation skyrocketed.<br />
Africa’s insurance markets were still characterized<br />
by fierce competitive pressure and<br />
political instability in many regions. This<br />
general competitive pressure led to the<br />
merger of a number of direct insurers, principally<br />
in South Africa, which meant that the<br />
number of market players fell. The reinsurance<br />
market followed suit, a trend which<br />
resulted in greater growth opportunities for<br />
the remaining companies.
Business development and position of<br />
the Company<br />
Premium income<br />
Retention increases within the <strong>R+V</strong> Group<br />
reduced the premium volume.<br />
Foreign business records additional growth<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>’s gross premium<br />
income fell by 6.9% in the fiscal year to<br />
€957.9 million. 5.2 percentage points of<br />
this decrease were attributable to exchange<br />
rate effects. After adjusting for this, the<br />
Company recorded a decrease in premiums<br />
of €18.4 million.<br />
Increases in the retentions of direct insurers<br />
within the <strong>R+V</strong> Group resulted in domestic<br />
premiums being reduced in the life, motor<br />
vehicle liability, motor vehicle and bond/<br />
construction guarantee insurance classes.<br />
Premiums written 2002 2001 Change 2002 2001 Change<br />
Gross €m Gross €m Gross % Net €m Net €m Net %<br />
Life 321.7 361.0 –10.9 124.7 170.4 –26.8<br />
Accident 39.3 36.5 7.6 38.1 34.8 9.6<br />
Liability 44.9 50.0 –10.4 32.9 35.1 –6.1<br />
Motor 106.1 211.6 –49.9 103.4 128.2 –19.3<br />
Fire 163.8 123.7 32.5 125.3 92.3 35.8<br />
Other property 98.4 102.5 –4.0 73.7 67.1 9.9<br />
Marine and aviation 82.5 62.0 33.0 66.5 48.9 36.0<br />
Others 101.2 81.2 24.6 58.3 35.9 62.2<br />
Total 957.9 1,028.5 –6.9 622.9 612.7 1.7<br />
In contrast, premiums increased in the<br />
general accident, credit (provision for<br />
doubtful debts) and fidelity insurance<br />
classes due to new underwritings and<br />
portfolio growth. The premium volume<br />
generated by business assumed from<br />
domestic cedents outside the <strong>R+V</strong> Group<br />
fell by €11.7 million or 7.4%. Overall,<br />
domestic business saw a 17.9% decrease<br />
in premiums.<br />
13<br />
Premium income from foreign business rose<br />
by €34.6 million or 7.9%. This meant that<br />
foreign business accounted for 49.6%<br />
(previous year: 42.8%) of the total premium<br />
volume. The main contributors to the premium<br />
volume were the traditional reinsurance<br />
markets of North America, Italy, the UK,<br />
Spain and France, along with the Singapore<br />
branch. Despite negative exchange rate<br />
movements, the expansion of foreign<br />
business activities led to moderate premium<br />
growth.<br />
The total net premium volume increased<br />
year-on-year by €10.1 million, or 1.7%, to<br />
€622.9 million. Retention increased to<br />
65.0% (previous year: 59.6%).<br />
The following table shows the Company’s<br />
premium income broken down according to<br />
its key insurance classes:
Premiums written in € million<br />
1000<br />
Technical result<br />
Increased claims volume impact results<br />
Global concentration processes continued<br />
in the year under review. The improved<br />
capital resources of the market’s remaining<br />
direct insurers tended to lessen the need<br />
for reinsurance. In addition, new market<br />
participants and different sales channels led<br />
to increased competitive pressure on many<br />
markets. International reinsurers were<br />
affected by a single event as never before.<br />
The terrorist attacks which took place in the<br />
US on September 11, 2001 went down as<br />
the single largest insurance claim in insurance<br />
history – at least USD50 billion.<br />
14<br />
900<br />
800<br />
700<br />
600<br />
500<br />
400<br />
300<br />
200<br />
100<br />
733<br />
336<br />
809<br />
428<br />
869<br />
484<br />
1029<br />
613<br />
1998 1999 2000 2001<br />
Gross premiums written<br />
Net premiums written<br />
958<br />
623<br />
2002<br />
Apart from the extraordinary expenses<br />
resulting from the terrorist attacks, 2001<br />
was also characterized by a large number<br />
of large claims affecting the Company’s<br />
earnings. These included the explosion of<br />
a fertilizer plant close to Toulouse/France,<br />
the total loss of the “Petrobras” oil platform<br />
off the coast of Brazil, the earthquake in<br />
El Salvador, tropical storm “Alison” in the<br />
southern US and typhoon “Nari” in Taiwan.<br />
The year under review also saw a high<br />
number of basic claims. A departure was<br />
made from the usual accounting practice<br />
of deferral by one year in order to set up<br />
provisions for the flood damage which<br />
devastated parts of Germany, Austria and<br />
the Czech Republic in August 2002, and<br />
for the results of the storm “Jeanette” on<br />
October 26/27, 2002.<br />
Together, these circumstances led once<br />
again to high gross claims expenses of<br />
81.0% (previous year: 77.6%) in the non-life<br />
classes. Not even retrocessions could<br />
provide relief, and the net loss ratio for the<br />
fiscal year totaled 87.0% (previous year:<br />
77.1%). At 29.5% (previous year: 29.6%),<br />
the gross expense ratio remained almost<br />
unchanged, while the net expense ratio<br />
improved from 31.3% to 30.6%.<br />
Total Non-life business 2000 2001 2002<br />
Gross loss ratio % 73.6 77.6 81.0<br />
Gross expense ratio % 31.9 29.6 29.5<br />
Gross combined ratio % 105.5 107.2 110.5<br />
The deterioration in the earnings situation in<br />
the motor vehicle class in the previous year<br />
continued during the year under review,<br />
principally due to developments in motor<br />
vehicle liability insurance. Provision<br />
reserves for the flood damage in Europe in<br />
August 2002 caused earnings from motor<br />
vehicle insurance, which had started to<br />
recover in the previous year, to decline<br />
again in the fiscal year. Only motor vehicle<br />
accident insurance recorded a slight profit<br />
in the fiscal year.
Liability business developed negatively,<br />
generating a loss in the fiscal year after<br />
a profit in the previous year.<br />
Accident insurance was unable to match<br />
the prior year’s satisfactory level of earnings,<br />
closing the year under review with<br />
a loss.<br />
Fire insurance recorded the highest loss of<br />
the property insurance classes. In addition<br />
to the costs of the large claim for the World<br />
Trade Center, earnings in this insurance<br />
class were impacted by a series of other<br />
major claim events from natural disasters<br />
and large industrial claims. In addition,<br />
a departure was made from the usual<br />
accounting practice of deferral by one year<br />
in order to set up provisions for the flood<br />
damage in August 2002 and the damage<br />
from storm “Jeanette” on October 26/27,<br />
2002; this had a negative impact on the<br />
result for the year under review.<br />
Engineering insurance continued its<br />
negative development of recent years.<br />
A significant drop in the loss recorded in<br />
the previous year was offset by a corresponding<br />
increase during the year under<br />
review.<br />
After the loss recorded in the previous year<br />
due to the provisions set up for the events<br />
of September 11, 2001 in New York, the<br />
loss generated by aviation insurance was<br />
substantially reduced in the fiscal year.<br />
The situation in marine insurance remained<br />
unsatisfactory. Insufficient rate levels and<br />
increased net loss ratios led to another<br />
technical loss in the year under review.<br />
The overall loss recorded by the remaining<br />
insurance classes in the year under review<br />
was considerably higher than in the previous<br />
year. This development is due to a<br />
deterioration in the credit, bonds, livestock<br />
and health insurance classes. Following a<br />
substantial loss in the previous year, the<br />
hail/crop insurance class recorded a profit<br />
in the year under review.<br />
15<br />
In contrast, life insurance recorded a technical<br />
surplus that exceeded the prior-year<br />
profit. After a slight surplus in the previous<br />
year, health insurance closed the year with<br />
a loss.<br />
Overall, reinsurance business ended the<br />
fiscal year with a loss of €81.6 million<br />
(previous year: €–33.3 million) before<br />
withdrawals from the equalization provision<br />
and similar provisions.<br />
As a result of improved net loss ratios in the<br />
year under review, allocations were made to<br />
the equalization provision in burglary and<br />
theft, aviation/aerospace and legal insurance.<br />
Allocations were also made in general<br />
accident, storm and tempest and construction<br />
services despite the deterioration of<br />
the net loss ratios in these classes, whereas<br />
the earnings situation in the other classes<br />
led to withdrawals. All in all, withdrawals of<br />
€17.4 million (previous year: allocations of<br />
€10.9 million) were made from the equalization<br />
provision and similar provisions.<br />
After withdrawals from the equalization provision<br />
and similar provisions, the technical<br />
loss amounted to €64.2 million (previous<br />
year: €–44.2 million).<br />
Investment portfolio<br />
The development of the Company’s investments<br />
in the past fiscal year was dominated<br />
by the reorganization of the <strong>R+V</strong> Group’s<br />
shareholdings (for more information see<br />
page 25). The restructuring and the revaluations<br />
related to this in some cases played<br />
a major role in the substantial increase in<br />
the investment portfolio of €776.1 million,<br />
or 56.7%, to €2,145.3 million. Shares in<br />
affiliated companies still accounted for<br />
a majority of holdings, increasing from<br />
56.1% to 67.6% as a consequence of the<br />
restructuring measures.
16<br />
Development of investments in € million<br />
2500<br />
2000<br />
1500<br />
1000<br />
500<br />
1150<br />
1125<br />
1998 1999<br />
1219<br />
1369<br />
2000 2001<br />
2002<br />
As a result of the implementation of the<br />
new Group structure, the direct interests<br />
held in <strong>R+V</strong> Lebensversicherung <strong>AG</strong> and<br />
<strong>R+V</strong> Pensionsfonds <strong>AG</strong>, which was established<br />
in fiscal 2002, are now held by <strong>R+V</strong><br />
Personen Holding GmbH, while the interests<br />
in <strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong><br />
are held by <strong>R+V</strong> KOMPOSIT Holding<br />
GmbH.<br />
During the past year, <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong><br />
participated in capital increases at its Italian<br />
subsidiaries.<br />
The interests in KRAV<strong>AG</strong>-LEBEN <strong>Versicherung</strong>s-<strong>AG</strong><br />
acquired by KRAV<strong>AG</strong>-SACH<br />
<strong>Versicherung</strong> des Deutschen Kraftverkehrs<br />
VaG and KRAV<strong>AG</strong>-HOLDING <strong>AG</strong> were sold<br />
to <strong>R+V</strong> Lebensversicherung <strong>AG</strong>.<br />
With respect to new operational investments,<br />
the focus was on fixed-income<br />
securities.<br />
2145<br />
The valuation reserves in the investments<br />
carried at cost increased by €599.3 million<br />
to €1,723.9 million. The reserve ratio for the<br />
entire investment portfolio thus amounts to<br />
80.4% (previous year: 82.1%).<br />
Investment result<br />
Current investment income (excluding interest<br />
on deposits) increased substantially by<br />
€216.1 million to €321.1 million during the<br />
year under review. This was primarily due to<br />
income from the profit transfer agreements<br />
signed with <strong>R+V</strong> Personen Holding GmbH<br />
and <strong>R+V</strong> KOMPOSIT Holding GmbH.<br />
Taking into account current expenses<br />
of €5.4 million, an ordinary result of<br />
€315.7 million was generated.<br />
As part of the measures taken to restructure<br />
the Group, capital gains of €455.5<br />
million were recorded in respect of shares<br />
in affiliated companies. Of the total hidden<br />
reserves realized by <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong><br />
and its subsidiaries, a special dividend of<br />
€639.5 million will be distributed to shareholders<br />
and reallocated to the equity of<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> reported on the face<br />
of the balance sheet within the framework<br />
of a pay-out take-back procedure. Apart<br />
from increasing transparency, this conversion<br />
will strengthen the earnings power of<br />
the union of cooperative banks without<br />
affecting the assets of <strong>R+V</strong> <strong>Versicherung</strong><br />
<strong>AG</strong>.<br />
Overall, the net investment result rose substantially<br />
to €784.3 million from €101.8 million<br />
in the previous year on account of the<br />
special factors described. In contrast, the<br />
crisis on the stock markets played only a<br />
minor role in the Group’s earnings due to<br />
the low proportion of the portfolio accounted<br />
for by listed shares.
Including interest on deposits and after<br />
deduction of the allocated investment<br />
return, the Company recorded an investment<br />
result of €786.6 million, compared<br />
with €103.5 million in the previous year.<br />
Other income and expenses<br />
A large proportion of other income,<br />
which totaled €19.8 million (previous year:<br />
€14.6 million), resulted from services performed<br />
for other companies within the <strong>R+V</strong><br />
Group. However, this increase was offset by<br />
equally high expenses. Other expenses also<br />
contained interest expenses of €15.9 million<br />
(previous year €14.0 million).<br />
Overall result<br />
Including the technical result (€–64.2 million),<br />
the investment result (€+786.6 million),<br />
other income (€20.0<br />
million) and other<br />
expenses (€39.7<br />
million), <strong>R+V</strong><br />
<strong>Versicherung</strong> <strong>AG</strong><br />
generated earnings<br />
before tax of €702.5<br />
million in 2001,<br />
compared with<br />
€44.4 million in the<br />
previous year. This<br />
improvement in<br />
earnings is principally<br />
due to the capital<br />
gains and the<br />
high investment<br />
income from the<br />
subsidiaries.<br />
A proposal will be made to the General<br />
Meeting to distribute €30.5 million of the<br />
net retained profits to shareholders via<br />
payment of a dividend of €3.50 and to<br />
distribute a special dividend of €73.50 per<br />
no-par value share. It is planned to offset<br />
the capital decrease caused by the special<br />
dividend by way of a capital increase within<br />
the framework of a pay-out, take-back procedure.<br />
Guarantee funds<br />
Based on the net premiums written, the<br />
guarantee ratio increased substantially yearon-year,<br />
remaining at a very high level<br />
(422.5%, up from 286.6% the previous<br />
year). Of this, the equity ratio totals 230.1%<br />
(previous year: 124.4%), and the reserve<br />
ratio amounts to 192.4% (previous year:<br />
162.2%).<br />
After deduction of Guarantee funds 2,631.9 1,756.3<br />
taxes on income<br />
and other taxes, net income for the year<br />
totaled €701.4 million (previous year: €36.6<br />
million). Following the release of €1.6 million<br />
from the reserve for own shares and an<br />
allocation of €33.0 million from net income<br />
to other revenue reserves, net retained profits<br />
of €670.0 million were disclosed for the<br />
year under review.<br />
17<br />
Guarantee funds 2002 2001<br />
€m €m<br />
Share capital 226.0 226.0<br />
Capital reserves 429.6 429.6<br />
Revenue reserves 76.1 70.0<br />
Net retained profits 701.4 36.6<br />
Shareholders’ equity 1,433.1 762.2<br />
Unearned premiums 88.2 62.6<br />
Aggregate reserve 491.0 400.6<br />
Reserve for loss and loss adjustment expenses 526.1 422.8<br />
Policyholders’ reserves 0.3 0.1<br />
Equalization provision and similar 87.7 105.0<br />
Other insurance reserves 5.4 3.0<br />
Total insurance reserves 1,198.7 994.1
Business developments in the individual<br />
insurance classes<br />
Life<br />
Currency developments impacted the gross<br />
premium volume<br />
18<br />
Life<br />
Gross premiums in € million<br />
400<br />
300<br />
200<br />
100<br />
338.5<br />
361,0<br />
2000 2001<br />
321,7<br />
2002<br />
The development of the life insurance markets<br />
was affected worldwide by the slump<br />
in share prices and low interest rates. As a<br />
result, customers moved away from fundand<br />
index-linked products, concentrating<br />
instead on guaranteed life insurance policies<br />
and traditional endowment insurance<br />
policies.<br />
Developments on the capital market meant<br />
that the German life insurance sector was<br />
faced with dwindling hidden reserves, the<br />
application of the amendments to section<br />
341b of the HGB (less strict lower of<br />
cost or market principle) and a reduction in<br />
profit-sharing, among other things. German<br />
life insurers also started selling Riester<br />
pension products, sales of which did not<br />
meet expectations.<br />
On the international life reinsurance markets,<br />
there was sustained demand for<br />
proportional and non-proportional risk<br />
transfer. Prices for nonproportional cumulative<br />
cover rose substantially following the<br />
events of September 11, 2001. However,<br />
the currently high level of rates are unlikely<br />
to be maintained in the long term. Demand<br />
for balance sheet protection solutions and<br />
traditional reinsurance financing is expected<br />
to increase in the future.<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>’s life insurance<br />
portfolio grew by €388.8 million to a total<br />
insured sum of €19.7 billion, an increase of<br />
2.0%. The net portfolio rose 2.2% to a total<br />
insured sum of €15.8 billion.<br />
Premiums from domestic business fell<br />
by 0.3% to €211.8 million in the year under<br />
review, while retained premiums grew by<br />
7.0% to €107.5 million.<br />
Gross premium income from foreign<br />
business, which was also impacted by<br />
exchange rate movements, fell. The volume<br />
of gross premiums increased by €38.7<br />
million, or 26.0%, while the volume of net<br />
premiums decreased by €52.8 million, or<br />
75.4%.<br />
Overall, gross premiums fell by €39.3<br />
million, or 10.9%, and net premiums by<br />
€45.8 million, or 26.8%.<br />
Life insurance recorded a profit of €5.1<br />
million at the end of the fiscal year (previous<br />
year: €3.2 million).
In terms of sums insured, the portfolio<br />
developed as follows:<br />
19<br />
2002 2001<br />
€m €m<br />
Reinsurance business assumed<br />
Sum insured Capital 14,404.3 14,419.5<br />
Annuity 5,261.4 4,857.5<br />
Business ceded<br />
Sum insured Capital 2,696.3 2,507.8<br />
Annuity 1,132.4 1,277.7<br />
Retained for own account<br />
Sum insured Capital 11,708.0 11,911.7<br />
Annuity 4,129.0 3,579.8<br />
Accident<br />
Growth in premium volume in domestic<br />
and foreign business<br />
Accident<br />
Gross premiums in € million<br />
40<br />
30<br />
20<br />
10<br />
33,5<br />
2000<br />
36,5<br />
2001<br />
39,3<br />
2002<br />
2000 2001 2002<br />
Gross loss ratio % 41,3 49,8 49,0<br />
Gross expense ratio % 52,5 48,8 52,3<br />
Gross combined ratio % 93,9 98,6 101,3<br />
Accident insurance saw an increase in both<br />
the gross and the net premium volume from<br />
domestic business. While gross premium<br />
income rose by €1.6 million, or 7.0%,<br />
from €22.4 million to €24.0 million, retained<br />
premiums increased by €1.7 million, or<br />
7.5%, from €22.3 million to €24.0 million.<br />
Foreign business developed along similar<br />
lines. Gross premium income improved<br />
by €1.2 million, or 8.5%, to €15.3 million,<br />
with net premium income declining by<br />
€1.6 million, or 13.3%, to €14.1 million.<br />
Overall, gross premium income grew by<br />
7.6% to €39.3 million, while net premium<br />
income rose 9.6% to €38.1 million.<br />
General accident ended the year with a net<br />
loss of €0.7 million (previous year: a profit<br />
of €10.4 million). Despite an increased loss<br />
ratio in the year under review, an allocation<br />
was made in accordance with the calculation<br />
criteria for the equalization provision.<br />
As a result, this class recorded a loss of<br />
€1.2 million (previous year: a profit of<br />
€8.6 million).<br />
The premium volume from motor vehicle<br />
accident insurance was due almost exclusively<br />
to domestic business. As a result of<br />
the higher retentions by primary insurers in<br />
the <strong>R+V</strong> Group in previous years, reduced<br />
belated premiums led to a premium volume<br />
that was 60.8% lower in gross terms and<br />
61.7% lower in net terms than the belated<br />
prior-year level. This insurance class<br />
closed the year with a profit of €0.1 million<br />
(previous year: a profit of €0.3 million).<br />
Liability<br />
Rising loss ratios depress earnings<br />
Restructuring measures in Germany and<br />
abroad pushed down premium income.<br />
While the gross premium volume from<br />
domestic business fell by 8.6% to €28.2<br />
million, the figure for foreign business<br />
declined by 13.3% to €16.6 million. The<br />
retention premium in domestic business<br />
fell by 17.0% to €22.0 million and rose in<br />
foreign business by 27.4% to €10.9 million.
On the whole, gross premium income<br />
decreased by €5.2 million, or 10.4%, to<br />
€44.9 million and net premium income by<br />
€2.2 million to €32.9 million.<br />
Expenses for large claims such as “Lipobay”<br />
or “Sulzer” increased loss ratios in the<br />
year under review. The reported net loss<br />
ratio jumped by 18.3% to 79.0% and the<br />
net expense ratio by 6.4% to 30.9%. These<br />
factors led to a loss of €3.3 million (previous<br />
year: a profit of €5.2 million) in the<br />
balance on technical account, producing a<br />
loss of €3.6 million (previous year: €–2.7<br />
million) after allocation to the equalization<br />
provision.<br />
Motor<br />
Decline in premium volume – unsatisfactory<br />
earnings development<br />
20<br />
Liability<br />
Gross premiums in € million<br />
50<br />
40<br />
30<br />
20<br />
10<br />
40,3<br />
2000<br />
50,0<br />
2001<br />
44,9<br />
2002<br />
2000 2001 2002<br />
Gross loss ratio % 49,3 33,7 72,2<br />
Gross expense ratio % 39,9 30,5 31,6<br />
Gross combined ratio % 89,2 64,2 103,7<br />
Motor<br />
Gross premiums in € million<br />
250<br />
200<br />
150<br />
100<br />
50<br />
125,3<br />
2000<br />
211,6<br />
2001<br />
106,1<br />
2002<br />
2000 2001 2002<br />
Gross loss ratio % 76,0 79,4 92,8<br />
Gross expense ratio % 21,1 20,0 19,1<br />
Gross combined ratio % 97,1 99,4 111,9<br />
After a decline in rates over many years,<br />
the premiums on the German motor vehicle<br />
insurance market in particular climbed significantly<br />
once more. Nevertheless, retention<br />
increases by <strong>R+V</strong> Allgemeine <strong>Versicherung</strong><br />
<strong>AG</strong> plus restructuring effects caused a<br />
decline in gross premium income from<br />
domestic business. The premium volume<br />
fell by €104.0 million, or 66.7%, to €51.9<br />
million. The retention premium also fell as a<br />
result, by €24.9 million, or 32.3%, to €52.3<br />
million. Trends in foreign business were less<br />
pronounced. The gross premium volume<br />
dropped slightly by €1.5 million, or 2.7%,<br />
to €54.2 million, while the net premium<br />
remained almost constant at €51.1 million<br />
(previous year: €51.0 million).
Overall, gross premium income declined by<br />
€105.5 million, or 49.9%, from €211.6 million<br />
to €106.1 million. Net income after<br />
retrocessions amounted to €103.4 million,<br />
compared with €128.2 million in the previous<br />
year (–19.3%).<br />
Among the individual classes of motor<br />
insurance, domestic business performed<br />
almost in parallel. In the case of motor vehicle<br />
liability insurance, the gross premium<br />
volume fell by €74.4 million, or 68.4%, from<br />
€108.8 million to €34.4 million, while the net<br />
amount was down €18.8 million, or 35.0%,<br />
from €53.7 million to €34.9 million.<br />
Developments in the motor vehicle class<br />
were similar, with gross premium volumes<br />
of €47.0 million in the previous year down<br />
to €17.5 million in the fiscal year (–62.9%).<br />
Retained premiums amounted to €17.4 million<br />
after €23.5 million in the previous year<br />
(–26.1%).<br />
Foreign business performed differently<br />
across the various classes. Premiums in<br />
the motor vehicle liability insurance class<br />
declined by €6.9 million, or 13.5%, to €44.1<br />
million (gross) and €5.0 million, or 10.6%, to<br />
€42.1 (net). In contrast, gross premiums in<br />
the motor vehicle class increased by €5.3<br />
million from €4.8 million to €10,1 million<br />
(122.4%) while net premiums rose by<br />
€5.1 million, or 131.3%, from €3.9 million<br />
to €9.0 million.<br />
Motor vehicle liability insurance recorded a<br />
loss in both domestic and foreign business;<br />
the figure of €18.1 million exceeded the<br />
prior-year loss by €8.8 million. After withdrawals<br />
from the equalization provision, the<br />
loss fell to €10.3 million (previous year:<br />
€–14.9 million).<br />
21<br />
Motor vehicle cover also generated losses,<br />
in both domestic and foreign business.<br />
Provisions for the devastating effects of the<br />
flood damage to many regions of Germany,<br />
Austria and the Czech Republic in August<br />
2002 impacted results. At €2.3 million, the<br />
loss incurred in the fiscal year was much<br />
greater than that recorded in the previous<br />
year (€–1.0 million). Following withdrawals<br />
from the equalization provision, a slight<br />
profit of €0.1 million was generated (previous<br />
year: €–0.9 million).<br />
The overall balance on technical account in<br />
the motor insurance class was once again<br />
negative at €–20.4 million (previous year:<br />
€–10.3 million). After the withdrawal from<br />
the equalization provision, the loss fell to<br />
€10.2 million (previous year: €–15.8 million).<br />
Fire<br />
Strong growth in foreign business –<br />
Increased claims expenses impacted result<br />
for the fiscal year<br />
Gross premium income from fire insurance<br />
experienced strong growth during the fiscal<br />
year. The premium volume improved by<br />
€40.1 million, or 32.5%, from €123.7 million<br />
to €163.8 million. This development was<br />
principally attributable to foreign business.<br />
While domestic business rose by €2.5 million,<br />
or 9.2%, from €27.6 million to €30.1<br />
million, foreign business experienced<br />
above-average growth with premium<br />
increases of €37.6 million, or 39.2%, to<br />
€133.7 million. After retrocessions, retained<br />
premiums from domestic business rose by<br />
€2.1 million, or 12.0%, to €19.3 million,<br />
while a premium volume of €106.0 million<br />
was retained from foreign business. This<br />
corresponded to a growth rate of 41.2%.<br />
The share of premium income attributable<br />
to foreign business increased to 81.6%, up<br />
from 77.7% the previous year.
The technical result in the fire insurance<br />
class suffered under the effects of the<br />
events of September 11, 2001, as well as<br />
additional large claims and an increased<br />
number of basic claims. Provisions were<br />
also set up for the flood damage of August<br />
2002 and storm “Jeanette” in October<br />
2002, which also impacted earnings. Taken<br />
together, these factors led to a net loss of<br />
€33.0 million (previous year: €–24.3 million).<br />
After withdrawal from the equalization provision,<br />
the loss fell to €26.7 million (previous<br />
year: €–14.9 million).<br />
Marine and aviation<br />
Gross premiums up 33.0% – unsatisfactory<br />
earnings situation<br />
In the past fiscal year, the marine insurance<br />
class again achieved a considerable<br />
increase in premiums. Premium income<br />
rose in both gross and net terms.<br />
22<br />
Fire<br />
Gross premiums in € million<br />
150<br />
100<br />
50<br />
127,5<br />
2000<br />
123,7<br />
2001<br />
163,8<br />
2002<br />
2000 2001 2002<br />
Gross loss ratio % 83,4 103,1 90,5<br />
Gross expense ratio % 33,8 35,4 29,6<br />
Gross combined ratio % 117,2 138,5 120,1<br />
Marine and aviation<br />
Gross premiums in € million<br />
90<br />
80<br />
70<br />
60<br />
50<br />
40<br />
30<br />
20<br />
10<br />
38,0<br />
2000<br />
62,0<br />
2001<br />
82,5<br />
2002<br />
2000 2001 2002<br />
Gross loss ratio % 94,6 124,5 93,0<br />
Gross expense ratio % 26,3 25,2 23,8<br />
Gross combined ratio % 120,9 149,7 116,8<br />
While gross premium growth of €15.3 million<br />
(30.2%) to €66.1 million was recorded,<br />
net premiums rose by €13.2 million, or<br />
34.2%, to €51.8 million.<br />
Gross domestic premiums fell slightly by<br />
€0.2 million, or 1.0%, from €22.5 million to<br />
€22.3 million. In contrast, the gross premium<br />
volume from foreign business grew by<br />
€15.6 million (55.1%) from €28.2 million to<br />
€43.8 million.<br />
The retention premium for domestic business<br />
rose by € 1.1 million, or 8.6%, from<br />
€13.0 million to €14.1 million; the increase<br />
for foreign business was €12.1 million<br />
(47.2%) from €25.6 million to €37.7 million.
Major claim events such as ”Petrobras“ or<br />
the explosion in a chemicals factory in<br />
Toulouse impacted the earnings situation,<br />
so that this class closed the year with a<br />
loss from both domestic and foreign business.<br />
The net technical loss totaled €13.3<br />
million (prior year: €–14.0 million). As there<br />
was no change in the calculation of the<br />
equalization provision during the year under<br />
report, the technical loss remained at €13.3<br />
million (previous year: €–14.0 million).<br />
Aviation business during the year under<br />
review was dominated by the events in the<br />
US on September 11, 2001 and a general<br />
economic downturn. Following September<br />
11, market players renewed their previously<br />
half-hearted restructuring efforts.<br />
The strategy of concentrating on target<br />
customers in an improving market environment<br />
was used to broaden the premium<br />
base at improved conditions. The gross<br />
premium volume in aviation and aerospace<br />
insurance improved by €5.2 million, or<br />
46.1%, to €16.4 million. The retention<br />
premium rose by €4.4 million, or 42.7%, to<br />
€14.7 million, in parallel to the development<br />
of gross premium income.<br />
This growth was mainly due to foreign<br />
business. In this segment, gross premium<br />
volume climbed by €4.5 million, or 56.3%,<br />
to €12.4 million, while net premium volume<br />
rose €4.0 million, or 50.5%, to €11.8 million.<br />
Gross domestic business grew by €0.7 million,<br />
or 21.3%, to €4.0 million; the net figure<br />
was up €0.4 million, or 18.0%, to €2.9 million.<br />
This insurance class posted a loss of €0.4<br />
million at the end of the fiscal year, lower<br />
than the previous year’s loss of €1.4 million.<br />
This figure increased to €1.3 million (previous<br />
year: €–0.6 million) following the allocation<br />
to the equalization provision.<br />
23<br />
Other insurance classes<br />
Growth in premium volume – increased net<br />
loss ratios<br />
Other classes<br />
Gross premiums in € million<br />
200<br />
150<br />
100<br />
50<br />
166,3<br />
2000<br />
183,7<br />
2001<br />
199,6<br />
2002<br />
2000 2001 2002<br />
Gross loss ratio % 71,3 61,0 70,4<br />
Gross expense ratio % 34,0 34,0 32,5<br />
Gross combined ratio % 105,3 95,0 102,9<br />
The trend towards an increase in the premium<br />
volume last year continued in the fiscal<br />
year under review. Premium income rose in<br />
gross terms by €15.9 million, or 8.7%, to<br />
€199.6 million and by €28.9 million, or<br />
28.1%, to €131.9 million net.<br />
While premium income from domestic business<br />
fell by €2.6 million, or 23%, to €110.2<br />
million, the net volume increased by €10.1<br />
million, or 23.6%, to €53.1 million. Foreign<br />
business developed positively in both gross<br />
and net terms. The gross premium volume<br />
grew by €18.5 million, or 26.1%, rising from<br />
€70.9 million to €89.4 million, while the<br />
retention premium improved by €18.8 million<br />
(31.3%), from €60.0 million to €78.8<br />
million.
Key contributions to the premium volume<br />
came from the credit and bonds, storm,<br />
livestock, health, hail/crop, legal, comprehensive<br />
home contents and fidelity insurance.<br />
Loss ratios developed differently to the<br />
previous year. While improvements were<br />
made in the net loss ratios disclosed on<br />
the balance sheet for burglary and theft,<br />
water damage, hail/crop, credit and legal<br />
insurance, the opposite was true for the<br />
comprehensive home contents, comprehensive<br />
homeowners, storm, engineering,<br />
livestock, bonds, fidelity and health insurance<br />
classes.<br />
Profits were generated in the burglary and<br />
theft, water damage, hail/crop and legal<br />
insurance classes, while technical losses<br />
were recorded in the credit and bonds,<br />
livestock, engineering, storm, health, comprehensive<br />
home contents, comprehensive<br />
homeowners and fidelity insurance classes.<br />
Overall, the other insurance classes generated<br />
a net loss of €15.7 million in the year<br />
under review (prior year: €–2.4 million).<br />
Following withdrawals from the equalization<br />
provision, the loss fell to €13.1 million (prior<br />
year: €–8.2 million).<br />
Staff development<br />
As of December 31, 2002, the number of<br />
people employed in comparison to the previous<br />
year was as follows:<br />
24<br />
2002 2001<br />
Total number of employees 232 225<br />
of whom:<br />
Full-time 204 193<br />
Part-time 23 26<br />
Employees with<br />
fixed-term contracts 5 6<br />
223 people were employed at the head<br />
office in Wiesbaden (previous year: 216)<br />
and nine people were employed at the<br />
branch office in Singapore, as in the previous<br />
year.<br />
Contractual relations within the<br />
<strong>R+V</strong> Group<br />
Members of the Boards of Management<br />
of a number of <strong>R+V</strong> Group companies also<br />
hold similar positions at other <strong>R+V</strong> Group<br />
companies.<br />
<strong>R+V</strong> companies have concluded service<br />
agreements within the Group. In line with<br />
these agreements, cross-enterprise services<br />
are performed by one of the following companies<br />
– <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>, <strong>R+V</strong> Allgemeine<br />
<strong>Versicherung</strong> <strong>AG</strong>, <strong>R+V</strong> Lebensversicherung<br />
<strong>AG</strong> or Rhein-Main Assistance<br />
GmbH. The services performed for the<br />
other companies primarily extend to the<br />
following areas: sales, investments, asset<br />
management, accounting, premium collection,<br />
financial control, legal, auditing, communications,<br />
personnel management, general<br />
administration and IT. The companies<br />
receiving these services are charged after<br />
these have been provided; they have rights<br />
of instruction and control over the outsourced<br />
areas.<br />
In addition, the companies of the <strong>R+V</strong><br />
Group have concluded an agreement on<br />
central cash management and a central<br />
financial clearing system.
Shareholder structure<br />
As of the balance sheet date, shares in<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> were held indirectly<br />
or directly by the following shareholders<br />
belonging to the union of cooperative<br />
banks:<br />
– DZ BANK <strong>AG</strong> Deutsche Zentral-<br />
Genossenschaftsbank, Frankfurt/Main<br />
– WGZ-Bank Westdeutsche<br />
Genossenschafts-Zentralbank eG,<br />
Düsseldorf<br />
– Projekt 7 GmbH, Berlin<br />
– Bayerische Raiffeisen Beteiligungs-<strong>AG</strong>,<br />
Munich<br />
– Beteiligungs-<strong>AG</strong> der Bayerischen<br />
Volksbanken, Munich<br />
– Genossenschaftliche<br />
Beteiligungsgesellschaft Kurhessen <strong>AG</strong>,<br />
Kassel<br />
– Norddeutsche Genossenschaftliche<br />
Beteiligungs-<strong>AG</strong>, Hanover<br />
– 791 branches of Volksbank and<br />
Raiffeisenbank throughout Germany<br />
Related parties<br />
In the report prepared in accordance with<br />
section 312 of the Aktiengesetz (AktG –<br />
German Public Companies Act) on related<br />
parties, the Board of Management declared<br />
that, according to the circumstances known<br />
to it at the time the transactions mentioned<br />
in the report were performed, the Company<br />
received adequate consideration for each<br />
transaction, and that it did not take or fail to<br />
take any other measures subject to disclosure.<br />
25<br />
New Group structure<br />
In August 2002, the Executive bodies of<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>, <strong>R+V</strong> Lebensversicherung<br />
<strong>AG</strong> and <strong>R+V</strong> Allgemeine <strong>Versicherung</strong><br />
<strong>AG</strong> approved a new Group<br />
structure.<br />
The new Group structure will bundle the<br />
operating insurance companies under the<br />
umbrella of two new holding companies. All<br />
interests in the holding companies will be<br />
held by <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>. <strong>R+V</strong> KOM-<br />
POSIT Holding GmbH holds the interests in<br />
companies in the property and casualty<br />
insurance classes, i.e. <strong>R+V</strong> Allgemeine<br />
<strong>Versicherung</strong> <strong>AG</strong>, <strong>R+V</strong> Rechtsschutzversicherung<br />
<strong>AG</strong>, KRAV<strong>AG</strong>-LOGISTIC<br />
<strong>Versicherung</strong>s-<strong>AG</strong> and KRAV<strong>AG</strong>-ALLGE-<br />
MEINE <strong>Versicherung</strong>s-<strong>AG</strong>. <strong>R+V</strong> Personen<br />
Holding GmbH comprises the business of<br />
<strong>R+V</strong> Lebensversicherung <strong>AG</strong>, <strong>R+V</strong>-Pensionsfonds<br />
<strong>AG</strong> and Krankenversicherung<br />
<strong>AG</strong>. This gives the <strong>R+V</strong> Group a forwardlooking<br />
structure that will pave the way for<br />
strategic activities in the future. Grouping<br />
togerther the operating insurance companies<br />
on a single level under the new holding<br />
companies enables the Group to assign<br />
clear management and performance<br />
responsibility.
Risks of future development<br />
Risk management process<br />
The Gesetz zur Kontrolle und Transparenz<br />
im Unternehmensbereich (KonTraG –<br />
German Act on Control and Transparency in<br />
Business) that took effect on May 1, 1998<br />
details the duties of the Board of Management<br />
to report on the risks of future development<br />
and to provide appropriate risk<br />
management. In this context, risk management<br />
covers all systematic measures<br />
involved in recognizing, evaluating and<br />
controlling risks.<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> is integrated in the<br />
<strong>R+V</strong> Group’s risk management process.<br />
The organization of the latter – including the<br />
relevant risk officers – and the risk principles<br />
are documented in a risk management<br />
manual. Risks are managed and analyzed<br />
with the aid of an IT application.<br />
The <strong>R+V</strong> Group has a number of systems at<br />
its disposal to manage and control risks.<br />
These systems are further developed on an<br />
ongoing basis and supplemented by a topdown<br />
approach to these instruments as<br />
part of a permanent early warning system.<br />
The regular risk conferences and central<br />
risk reporting to the Board of Management<br />
guarantee that risks to future development<br />
that could impact the Company as a going<br />
concern are identified, analyzed and controlled<br />
in a timely manner. The risks monitored<br />
are technical risks, investment risks<br />
relating to receivables from the insurance<br />
business, default risks, operating risks, and<br />
global and strategic risks. The latter relate<br />
to risks from changes in the market and<br />
relationships with sales partners, as well as<br />
risks involved in the core activities of planning<br />
and control.<br />
26<br />
Technical risks:<br />
The main technical risks for a reinsurer lie<br />
in an unbalanced portfolio, inappropriate<br />
liability for catastrophic loss and fundamental<br />
changes in the basic trends on the main<br />
markets.<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> counters these risks<br />
by continuously tracking the markets.<br />
Particular importance is attached to maintaining<br />
a balanced portfolio – both in terms<br />
of diversification on a global scale and<br />
across different classes of insurance.<br />
Risks are assumed within prescribed underwriting<br />
boundaries that limit liability for both<br />
individual and cumulative losses. The level<br />
and frequency of possible impacts from<br />
catastrophic losses are analyzed and<br />
tracked on an ongoing basis using established<br />
industry software, supplemented<br />
by additional verification by the Company<br />
itself. Liabilities assumed, particularly in the<br />
area of cumulative losses, are reinsured on<br />
national and international reinsurance markets<br />
with companies with first-class credit<br />
ratings. Technical provisions are maintained<br />
at appropriate levels. Based on net premiums<br />
written, the Company has a high guarantee<br />
funds ratio and a high equity ratio.<br />
Default risks relating to receivables from<br />
the insurance business:<br />
The default risk relating to the billed reinsurance<br />
receivables from cedents and retrocessionaries<br />
is limited by monitoring the<br />
Standard & Poor’s ratings on a regular<br />
basis.
Investment risks:<br />
In order to create „insurance coverage“<br />
products, insurance companies expose<br />
themselves to risks such as changes in<br />
market prices, credit ratings and liquidity<br />
as part of their investment activities. <strong>R+V</strong><br />
<strong>Versicherung</strong> <strong>AG</strong> counters these risks by<br />
observing the basic principle of achieving<br />
the greatest possible security and profitability<br />
while maintaining the liquidity of the<br />
insurance company at all times. In particular,<br />
investment policy aims to minimize risks<br />
by maintaining an appropriate mix and<br />
diversification of investments. Derivative<br />
financial instruments, structured products<br />
or asset backed securities are only used in<br />
accordance with supervisory law provisions<br />
set out in BAV (Federal Insurance Supervisory<br />
Office) circulars R 3/2000, R 3/99<br />
and R 1/2002. Their use is explicitly regulated<br />
by internal directives. Extensive, timely<br />
reporting ensures that the different risks are<br />
regularly monitored and presented transparently.<br />
Extrapolating the capital market situation<br />
at the end of 2002 to December 31,<br />
2003 and continuing the methods adopted<br />
in 2002 to calculate lasting impairments,<br />
the Company expects investment income<br />
to make a positive contribution to the net<br />
income for the year.<br />
At an organizational level, <strong>R+V</strong> <strong>Versicherung</strong><br />
<strong>AG</strong> counters investment risks by ensuring<br />
the strict functional separation of trading,<br />
settlement and financial control.<br />
Currency risks:<br />
As far as possible, liabilities in foreign currencies<br />
arising from reinsurance business<br />
are matched with investments in these foreign<br />
currencies. This allows exchange rate<br />
gains and losses to be largely offset by the<br />
correlative effect.<br />
27<br />
Operating risks:<br />
Operating risks are risks from general business<br />
activities. They arise as a result of<br />
human behavior, technical faults, weaknesses<br />
in process or project management<br />
or external influences.<br />
Risk provisioning using<br />
the internal control system:<br />
The main instrument used by the <strong>R+V</strong><br />
Group to limit operating risks is the internal<br />
control system. The Group protects against<br />
the risk of errors and fraudulent activities in<br />
its administration by providing regulations<br />
and controls in its specialist departments<br />
and by reviewing the application and effectiveness<br />
of the internal control systems in<br />
Group audits. As far as possible, payment<br />
flows and undertakings are handled by<br />
computer. Additional security is provided by<br />
predefined, electronically stored powers of<br />
attorney and authorization rules, as well as<br />
automatic random checks performed by the<br />
stored random generator when policies are<br />
drawn up. Manual processing is conducted<br />
according to the dual control principle.<br />
The internal monitoring of the regulations<br />
governing the risk management system,<br />
particularly with regard to their effectiveness,<br />
was reviewed by the Group audit<br />
department in 2001 for the first time. The<br />
implementation of the resulting measures<br />
was monitored by the Group audit unit and<br />
within the framework of the risk conference.
Provision for IT risks:<br />
In the IT area, the security of programs and<br />
data and the ability to ensure ongoing operations<br />
is guaranteed by comprehensive<br />
access controls and safety precautions.<br />
A particular risk would be the partial or<br />
complete failure of the IT systems. The <strong>R+V</strong><br />
Group has made provisions against this by<br />
establishing two separate data centers,<br />
each with special access protection, sensitive<br />
fire protection measures and a secure<br />
power supply based on emergency power<br />
generators. A defined restart procedure to<br />
be used in the event of a disaster is tested<br />
for its effectiveness in exercises on a regular<br />
basis. Data is stored in different <strong>R+V</strong><br />
buildings in high security areas as well as at<br />
additional external locations. The telecoms<br />
infrastructure has been designed with a<br />
high level of redundancy, both internally<br />
within buildings and with regard to external<br />
network access.<br />
Quality assurance for the IT systems is<br />
provided by way of established problem<br />
and change management processes. All<br />
events of relevance to services are recorded<br />
and tracked in accordance with their<br />
significance. Current topics are dealt with in<br />
daily conferences and allocated processing<br />
priority. Monthly service control meetings<br />
attended by all IT division heads are held to<br />
escalate problems and take countermeasures<br />
when fixed thresholds in relation to<br />
system availability and response times are<br />
exceeded.<br />
28<br />
Risk provisions for major projects and<br />
investments:<br />
The <strong>R+V</strong> Group has laid down binding procedures<br />
for the planning and implementation<br />
of projects and investments. In line with<br />
these specifications, an investment committee<br />
regularly examines major projects and<br />
investments, paying particular attention to<br />
events, problems and (counter)measures,<br />
as well as adherence to budgets. Necessary<br />
changes are implemented immediately.<br />
These are also coordinated with the risk<br />
conference committee.<br />
Summary of the risk situation<br />
The instruments and methods of analysis<br />
outlined here show that <strong>R+V</strong> <strong>Versicherung</strong><br />
<strong>AG</strong> has a comprehensive system that satisfies<br />
the risk identification and analysis<br />
requirements needed for efficient risk management.<br />
To date, it has not identified any<br />
developments that could have a material<br />
long-term effect on the Company’s net<br />
assets, financial position and results of<br />
operations.
Significant events and outlook<br />
The global economy is currently in recession,<br />
and the economic prospects for the<br />
near future look relatively poor. It has also<br />
become clear that no country or region can<br />
replace the US in its role as the “motor”<br />
of the global economy in the last few years.<br />
This is not the only reason why the US<br />
holds the key to any economic turnaround:<br />
before September 11, 2001, it was generally<br />
assumed that a recovery was on the<br />
cards. The terrorist attacks put paid to this<br />
early turnaround, and the negative sentiment<br />
spread to other countries. Conversely,<br />
this leads us to conclude that an improvement<br />
in the US economy would have a positive<br />
effect on other national economies.<br />
Our business policy is based even more<br />
firmly than in the past on three principles.<br />
We intend to systematically deploy our<br />
capacity in areas where we can obtain an<br />
appropriate price for the risk we assume.<br />
Our involvement is based on the premise<br />
that the overall exposure is clearly defined<br />
and that any potential cumulative risks are<br />
recognized and – if necessary – limited in a<br />
suitable fashion.<br />
29<br />
Long-term, trust-based cooperation with<br />
our customers is one of our main priorities.<br />
At the same time, however, a common<br />
basic understanding is essential if the economic<br />
prospects of a business partnership<br />
are to be transparent, balanced and profitable<br />
for both sides in the long term.<br />
We systematically implemented these principles<br />
as part of our renewal negotiations in<br />
2002, withdrawing from unprofitable contractual<br />
relationships in the property and<br />
accident insurance business. The resulting<br />
decline in the premium volume will, however,<br />
be more than offset by new underwriting<br />
business, so that we can expect<br />
moderate premium growth in the next fiscal<br />
year along with a clear improvement in the<br />
balance on technical account.<br />
The consolidation measures initiated in<br />
2001 for the 2002 underwriting year will<br />
not affect the balance sheet until 2003, due<br />
to the deferred reporting of third-party business.<br />
Events during the current fiscal year<br />
to date provide compelling evidence that<br />
our consolidation strategy will be successful.<br />
This is why we have systematically pursued<br />
this approach in the 2003 underwriting<br />
year, with the expectation that 2004 will see<br />
a further improvement in third-party business.<br />
Wiesbaden, April 8, 2003<br />
The Board of Management
Appendix to the Management <strong>Report</strong><br />
In the fiscal year, the Company was active<br />
in the following fields of domestic and<br />
foreign reinsurance:<br />
Life<br />
Health<br />
Accident<br />
Liability<br />
Motor<br />
Aviation<br />
Legal<br />
Fire and allied perils<br />
Burglary and theft<br />
Water damage<br />
Glass<br />
Storm<br />
Comprehensive home contents<br />
Comprehensive homeowners<br />
Hail<br />
Livestock<br />
Engineering<br />
Marine<br />
Credit and bonds<br />
Other<br />
31
Proposal on the Appropriation<br />
of Profits<br />
Net retained profits for the fiscal year amount to €669,989,823.<br />
We propose to the General Meeting that the net retained profits be used as follows:<br />
32<br />
€3.50 dividend 30,453,500<br />
plus €73.50 special dividend<br />
per no-par value share for 8,701,000 shares 639,523,500<br />
Retained profits brought forward 12,823<br />
€<br />
669,989,823
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong><br />
<strong>Annual</strong> Financial<br />
Statements 2002
Balance Sheet as of December 31, 2002*<br />
Assets<br />
34<br />
2002 2001<br />
€ € € € €<br />
A. Unpaid contributions to subscribed capital – –<br />
thereof: called up: –€ (–€)<br />
B. Intangible assets<br />
I. Start-up and business expansion costs – –<br />
II. Goodwill – –<br />
III. Other intangible assets 826 154,435<br />
826 154,435<br />
C. Investments<br />
I. Land, land rights and buildings including<br />
buildings on third-party land 4,004,642 4,242,230<br />
II. Investments in affiliated and associated<br />
companies<br />
1. Shares in affiliated companies 1,450,554,771 767,460,481<br />
2. Loans to affiliated companies 71,406,481 72,671,048<br />
3. Investments in associates 63,831,709 51,332,602<br />
4. Loans to associates – 1,585,792,961 –<br />
III. Other financial investments<br />
1. Shares, investment certificates and other<br />
variable-yield securities 82,543,983 92,057,798<br />
2. Bearer bonds and other fixed-income<br />
securities 253,471,023 128,774,977<br />
3. Receivables from mortgages, land<br />
charges and annuity land charges – –<br />
4. Other loans<br />
a) Registered bonds 120,371,295 166,387,564<br />
b) Notes receivable and loans 66,802,483 66,802,483<br />
c) Loans and advance payments on<br />
insurance policies – –<br />
d) Miscellaneous loans 9,112,919 196,286,697 5,112,919<br />
5. Deposits with banks 19,616,565 10,787,457<br />
6. Miscellaneous investments 3,547,930 555,466,197 3,548,043<br />
IV. Deposits with ceding undertakings 1,228,421,281 1,079,938,052<br />
3,373,685,080 2,449,115,654<br />
* In the case of “thereof” notes, the figures for the previous year are shown in parentheses.
35<br />
2002 2001<br />
€ € € € €<br />
D. Assets held to cover linked liabilities – –<br />
E. Debtors<br />
I. Debtors arising out of direct insurance<br />
operations – –<br />
II. Debtors arising out of reinsurance operations 111,451,670 108,450,843<br />
thereof:<br />
affiliated companies<br />
€7,780,389 (€23,258,661)<br />
associates<br />
–€ (–€)<br />
III. Other debtors 323,863,512 133,773,297<br />
thereof:<br />
affiliated companies<br />
€270,622,759 (€57,833,573)<br />
associates<br />
–€ (–€)<br />
435,315,181 242,224,140<br />
F. Other assets<br />
I. Tangible assets and inventories 514,091 543,279<br />
II. Cash with banks, checks, and cash on hand 17,349,870 8,989,880<br />
III. Own shares – –<br />
Notional value:<br />
–€ (–€)<br />
IV. Miscellaneous assets 518,778 5,143,394<br />
18,382,739 14,676,553<br />
G. Prepaid expenses<br />
I. Accrued interest and rent 11,746,072 12,580,573<br />
II. Other prepaid expenses 12,559,036 1,481,809<br />
24,305,108 14,062,382<br />
H. Anticipated tax relief for future financial<br />
years in line with section 274 (2) HBG – –<br />
I. Deficit not covered by shareholders’ equity – –<br />
3,851,688,934 2,720,233,164
Equity and liabilities<br />
36<br />
2002 2001<br />
€ € € € €<br />
A. Shareholders’ equity<br />
I. Subscribed capital 226,000,000 226,000,000<br />
II. Capital reserves 429,590,228 429,590,228<br />
III. Revenue reserves<br />
1. Legal reserve – –<br />
2. Reserve for own shares – 1,583,458<br />
3. Statutory reserves – –<br />
4. Reserve in line with section 58 (2a) AktG – –<br />
5. Other revenue reserves 107,558,087 107,558,087 68,408,087<br />
IV. Net retained profits 669,989,823 36,627,976<br />
thereof profits brought forward:<br />
€24,476 (–€)<br />
1,433,138,138 762,209,749<br />
B. Participation certificates – –<br />
C. Subordinated liabilities 76,693,782 76,693,782<br />
D. Special tax-allowable reserves<br />
(in line with section 6b EStG) 357,608 –<br />
E. Technical provisions<br />
I. Unearned premiums<br />
1. Gross 119,882,382 80,617,725<br />
2. less:<br />
Reinsurance amount 31,645,128 88,237,254 18,019,219<br />
II. Mathematic reserve<br />
1. Gross 1,106,559,293 1,018,388,297<br />
2. less:<br />
Reinsurance amount 615,531,444 491,027,848 617,762,309<br />
III. Claims outstanding<br />
1. Gross 863,043,905 810,192,189<br />
2. less:<br />
Reinsurance amount 336,925,214 526,118,691 387,405,479<br />
IV. Provision for bonuses and rebates<br />
1. Gross 318,454 67,980<br />
2. less:<br />
Reinsurance amount – 318,454 –<br />
V. Equalization provision and similar provisions 87,657,592 105,027,706<br />
VI. Other technical provisions<br />
1. Gross 5,743,121 3,419,504<br />
2. less:<br />
Reinsurance amount 355,502 5,387,619 410,030<br />
1,198,747,459 994,116,364
37<br />
2002 2001<br />
€ € € € €<br />
F. Technical provisions for linked liabilities – –<br />
G. Other provisions<br />
I. Provisions for pensions and similar<br />
obligations 16,625,387 15,505,184<br />
II. Tax provisions 3,867,943 64,529,960<br />
III. Provisions for anticipated tax charges in<br />
future years in line with section 274 (1) HGB 1,100,000 –<br />
IV. Other provisions 4,051,143 5,082,724<br />
25,644,472 85,117,868<br />
H. Deposits received from reinsurers 642,823,871 627,417,980<br />
I. Other liabilities<br />
I. Creditors arising out of direct insurance<br />
operations – –<br />
II. Creditors arising out of reinsurance<br />
operations 158,694,363 119,524,322<br />
thereof:<br />
affiliated companies<br />
€28,616,932 (€9,342,063)<br />
associates<br />
€4,823 (€43,080)<br />
III. Bonds 19,576,050 19,896,405<br />
thereof convertible:<br />
–€ –€<br />
IV. Liabilities to banks 50,035,103 –<br />
V. Other creditors 245,816,191 35,078,141<br />
thereof: taxes<br />
€335,291 (€2,444,031)<br />
social security contributions<br />
€281,607 (€271,272)<br />
affiliated companies<br />
€239,162,489 (€25,970,820)<br />
associates<br />
€887,304 (€887,304)<br />
474,121,707 174,498,868<br />
K. Deferred income 161,897 178,553<br />
3,851,688,934 2,720,233,164
Income Statement for the period from<br />
January 1 to December 31, 2002*<br />
38<br />
2002 2001<br />
€ € € €<br />
I. Technical account<br />
1. Premiums earned – net:<br />
a. Gross premiums written 957,885,754 1,028,543,084<br />
b. Reinsurance premiums ceded 334,996,177 622,889,577 415,809,225<br />
c. Change in provision for unearned premiums – gross –41,541,313 –17,558,066<br />
d. Change in provision for unearned premiums – reinsurers’ share 13,621,075 –27,920,238 3,416,120<br />
594,969,339 598,591,914<br />
2. Allocated investment return – net 20,554,117 13,365,604<br />
3. Other technical income – net 1,508,815 4,252,062<br />
4. Claims incurred – net<br />
a. Claims paid<br />
aa. Gross 606,640,514 589,354,261<br />
bb. Reinsurers’ share 239,179,762 367,460,752 255,307,416<br />
b. Change in provision for claims outstanding<br />
aa. Gross 68,159,399 86,277,406<br />
bb. Reinsurers’ share –46,900,593 115,059,992 8,207,058<br />
482,520,744 412,117,193<br />
5. Change in other technical provisions – net<br />
a. Mathematical provision – net 7,422,344 –46,484,166<br />
b. Other technical provisions – net –2,492,500 –1,641,382<br />
4,929,844 –48,125,549<br />
6. Bonus and rebates – net 530,019 105,674<br />
7. Operating expenses – net<br />
a. Operating expenses – gross 307,128,378 300,735,368<br />
b. Less:<br />
reinsurance commissions and profit participations received 87,182,489 112,143,249<br />
219,945,889 188,592,119<br />
8. Other technical expenses – net 520,259 557,688<br />
9. Subtotal –81,554,796 –33,288,643<br />
10. Change in the equalization provision and similar provisions 17,370,114 –10,909,718<br />
11. Balance on technical result – net –64,184,681 –44,198,361<br />
* In the case of “thereof” notes, the figures for the previous year are shown in parentheses.
2002 2001<br />
€ € € € €<br />
II. Non-technical account<br />
1. Investment income<br />
a. Income from investments<br />
thereof:<br />
from affiliated companies<br />
3,081,850 32,163,626<br />
€2,450,000 (€31,466,306)<br />
b. Miscellaneous investment income<br />
thereof:<br />
from affiliated companies<br />
€26,822,301 (€28,756,194)<br />
aa. Income from land, land rights and<br />
buildings including buildings on third<br />
party land 584,604 531,163<br />
bb. Miscellaneous investment income 79,032,078 79,616,683 69,580,098<br />
c. Income from write-ups 78,710 544,981<br />
d. Realized gains on investments 473,839,486 1,785,420<br />
e. Income from profit pooling and profit<br />
transfer agreements 282,593,773 40,324,700<br />
f. Income from the release of special<br />
tax-allowable reserves – –<br />
839,210,502 144,929,988<br />
2. Investment expenses<br />
a. Investment management expenses,<br />
interest expenses and other investment<br />
expenses 5,351,761 4,215,745<br />
b. Write-downs on investments 4,571,382 1,319,842<br />
c. Realized losses on investments 432,475 –<br />
d. Expenses for losses assumed<br />
e. Allocation to special tax-allowable<br />
– –<br />
reserves 357,608 –<br />
10,713,226 5,535,587<br />
828,497,276 139,394,401<br />
3. Allocated investment return –41,868,699 –35,848,288<br />
786,628,577 103,546,113<br />
4. Other income 19,802,043 14,568,164<br />
5. Other expenses 39,698,391 29,500,508<br />
–19,896,348 –14,932,344<br />
6. Non-technical result 766,732,229 88,613,768<br />
7. Result from ordinary activities 702,547,547 44,415,407<br />
39
40<br />
2002 2001<br />
€ € € €<br />
8. Extraordinary income – –<br />
9. Extraordinary expenses – –<br />
10. Extraordinary result – –<br />
11. Taxes on income 1,117,938 7,744,496<br />
thereof reallocation within fiscal entity:<br />
–€ (–€18,490,058)<br />
12. Other taxes 47,721 42,935<br />
thereof reallocation within fiscal entity:<br />
–€520,939 (–€129,232)<br />
1,165,659 7,787,431<br />
13. Income from losses assumed – –<br />
14. Profit transferred as a result of profit pooling<br />
and profit transfer agreements – –<br />
15. Net income for the year 701,381,889 36,627,977<br />
16. Retained profits brought forward from the previous year 24,476 –<br />
17. Withdrawals from capital reserves – –<br />
18. Withdrawals from revenue reserves<br />
a. from legal reserve – –<br />
b. from reserve for own shares 1,583,458 –<br />
c. from statutory reserves – –<br />
d. from other reserves – 1,583,458<br />
1,583,458 1,583,458<br />
19. Transfers from participation certificates – –<br />
20. Appropriations to other revenue reserves<br />
a. to legal reserve – –<br />
b. to reserve for own shares – 1,583,458<br />
c. to statutory reserves – –<br />
d. to other revenue reserves 33,000,000 –<br />
33,000,000 1,583,458<br />
21. Transfers to participation certificates – –<br />
22. Net retained profits 669,989,823 36,627,976
Notes<br />
Accounting policies<br />
Basis of preparation<br />
The annual financial statements of <strong>R+V</strong><br />
<strong>Versicherung</strong> <strong>AG</strong> for 2002 were prepared in<br />
accordance with the provisions of the Handelsgesetzbuch<br />
(HGB – German Commercial<br />
Code), the Aktiengesetz (AktG –<br />
German Public Companies Act) and the<br />
provisions of the <strong>Versicherung</strong>saufsichtsgesetz<br />
(V<strong>AG</strong> – German Act on Private<br />
Insurance Undertakings) as well as the<br />
Verordnung über Rechnungslegung von<br />
<strong>Versicherung</strong>sunternehmen (RechVersV –<br />
German Federal Regulations on Insurance<br />
Accounting) of November 8, 1994.<br />
Use of simplification procedure<br />
The annual financial statements for 2002<br />
also cover all business assumed by <strong>R+V</strong><br />
Group companies in 2002, domestic and<br />
foreign third-party life insurance business<br />
and the business of our branch office in<br />
Singapore.<br />
As other non-life business underwritten on<br />
the international reinsurance market is often<br />
settled with the transferring parties long<br />
after the balance sheet date, the provision<br />
laid down in section 27 (1) in conjunction<br />
with section 3 of the RechVersV on approximation<br />
and simplification procedures has<br />
been applied. In line with this, business with<br />
a gross premium volume of €387.7 million<br />
or a 40.5% share of total premiums written<br />
was included one year in arrears. Technical<br />
provisions were increased sufficiently to<br />
meet current and future obligations.<br />
Intangible assets were valued at cost and<br />
written down over their estimated useful<br />
life. Additions in the fiscal year were generally<br />
written down pro rata.<br />
Land, land rights and buildings including<br />
buildings on third-party land were recorded<br />
at acquisition or manufacturing cost less<br />
write-downs. Straight-line depreciation was<br />
performed using the rate allowed by tax<br />
law.<br />
41<br />
Shares in affiliated companies and<br />
associates and other investments were<br />
recorded at cost. Investments held in<br />
foreign currencies were translated using<br />
the exchange rate applicable at the time of<br />
acquisition.<br />
Investments in associates were valued<br />
according to the length of time they have<br />
been held by the Company, as were other<br />
variable-yield securities, bearer bonds<br />
and other fixed-income securities, other<br />
loans and deposits with banks.<br />
Shares, investment certificates and other<br />
variable-yield securities, bearer bonds<br />
and other fixed-income securities were<br />
reported in line with the strict principle of<br />
the lower of cost or market. Write-ups were<br />
made in accordance with section 280 (1)<br />
HGB. These items also include derivative<br />
financial instruments; these were combined<br />
with existing securities in the portfolio to<br />
form microhedges for hedge accounting<br />
purposes.<br />
The equities component for the mixed<br />
funds assigned to the fixed assets in line<br />
with section 341b HGB was valued at the<br />
average rate for the year plus 10%. The<br />
fixed-income component was carried at<br />
the principal amount; derivative hedges<br />
were included at their hedge rate.<br />
The acquisition costs in euros of securities<br />
held in foreign currencies were calculated<br />
using the price of the security and the<br />
exchange rate as of the time of acquisition;<br />
the market value in euros was calculated on<br />
the basis of the price of the security and<br />
the exchange rate as of the balance sheet<br />
date.<br />
Other loans and deposits with banks<br />
were reported at their repayment value,<br />
insofar as specific valuation allowances did<br />
not have to be performed. Deposits with<br />
banks in foreign currencies were translated<br />
using the exchange rate as of the balance<br />
sheet date.
Premiums and discounts were amortized<br />
over the maturity period. The proportion<br />
relating to future years was reported as<br />
prepaid expenses.<br />
Financial derivatives and structured<br />
products were broken down into their<br />
individual components and valued using<br />
recognized actuarial methods based on<br />
the Black/Scholes option pricing model.<br />
Deposits with ceding undertakings and<br />
debtors arising out of reinsurance operations<br />
were reported at their nominal value.<br />
Doubtful debtors were written down<br />
directly.<br />
Operating and office equipment was<br />
valued at cost less straight-line depreciation.<br />
Additions in the fiscal year were<br />
generally written down pro rata. Low-value<br />
assets were written off in full in their year<br />
of acquisition.<br />
The remaining assets are reported at<br />
nominal value. Any necessary valuation<br />
allowances were performed and deducted<br />
from assets.<br />
Technical provisions (unearned premiums,<br />
mathematical provisions, claims outstanding<br />
and other technical provisions) were<br />
generally reported in line with information<br />
provided by the cedents.<br />
If no information was available, provisions<br />
were estimated on the basis of contractual<br />
conditions and the course of business to<br />
date.<br />
We made appropriate increases to a<br />
number of our cedents’ loss provisions<br />
for which we felt, given our experience,<br />
that the amounts stated were too low.<br />
Correspondingly, appropriate provisions<br />
were also made for expected future loss<br />
expenses.<br />
The reinsurers’ share of provisions was<br />
calculated in line with the conditions of<br />
the reinsurance agreements.<br />
42<br />
In contrast to their presentation in the past,<br />
unearned premiums for life insurance<br />
were reported separately and not together<br />
with the mathematical provisions.<br />
The equalization provision and similar<br />
provisions (nuclear plants, pharmaceutical<br />
risks) were calculated in accordance with<br />
section 341 h HGB in conjunction with<br />
sections 29 and 30 RechVersV.<br />
Deposits received from reinsurers and<br />
creditors arising out of reinsurance operations<br />
were reported at their nominal value.<br />
In line with section 6 a EStG, provisions<br />
for pensions and similar obligations<br />
were calculated using the present value<br />
method based on the 1998 mortality tables<br />
published by Prof. Dr. Klaus Heubeck,<br />
using an interest rate of 6%.<br />
The provision for early retirement was<br />
formed in line with the principles laid down<br />
in section 6 a EStG.<br />
Partial retirement provisions cover both<br />
unpaid remuneration and outstanding<br />
top-up amounts for salaries and pensions.<br />
An actuarial discount was made on the<br />
top-up amounts. The 1998 mortality tables<br />
published by Prof. Dr. Klaus Heubeck were<br />
applied to the calculation of these amounts,<br />
using an interest rate of 5.5%.<br />
The provisions for jubilee benefits were<br />
calculated using the 1998 mortality tables<br />
published by Prof. Dr. Klaus Heubeck, using<br />
an interest rate of 5.5%.<br />
The carrying amount of the remaining<br />
provisions is based on projected requirements.<br />
The remaining liabilities were recognized<br />
at the amounts payable on maturity.
Currency translation<br />
All items in foreign currencies were<br />
translated into euros.<br />
The items listed under Assets C, Investments<br />
I to III and the other debtors, other<br />
creditors, prepaid expenses and deferred<br />
income, and income and expenses items<br />
relating to these investments were translated<br />
using the exchange rate as of the<br />
balance sheet date December 31, 2002.<br />
For investments in associates, bearer<br />
bonds, other fixed-income securities,<br />
shares and deposits with banks, please<br />
refer to the notes on these items.<br />
All other items on the balance sheet and in<br />
the income statement, including in particular<br />
the technical items, were translated<br />
using the exchange rate as of November<br />
30, 2002 in order to accelerate the preparation<br />
of annual financial statements.<br />
Due to the strong fluctuations in foreign<br />
exchange rates, the difference between the<br />
exchange rates as of December 31, 2002<br />
and November 30, 2002 resulted in<br />
exchange rate losses this fiscal year.<br />
Foreign currency gains and losses incurred<br />
in relation to a single currency were netted<br />
against each other.<br />
43
List of Shareholdings<br />
Shares in affiliated companies<br />
Name and registered office of company Share of Currency Figures for Equity Result<br />
capital in % fiscal year € €<br />
Insurance companies<br />
Assimoco S.p.A., Segrate 44.5 EUR 2002 45,728,551 –134,449<br />
Assimoco Vita S.p.A., Segrate 59.2 EUR 2002 37,206,922 –6,621,219<br />
KRAV<strong>AG</strong>-ALLGEMEINE <strong>Versicherung</strong>s-<strong>AG</strong>, Hamburg 76.0 EUR 2002 24,230,569 –3,730,431<br />
KRAV<strong>AG</strong>-LEBEN <strong>Versicherung</strong>s-<strong>AG</strong>, Hamburg*** 100.0 EUR 2002 26,587,095 136,000<br />
KRAV<strong>AG</strong>-LOGISTIC <strong>Versicherung</strong>s-<strong>AG</strong>, Hamburg 51.0 EUR 2002 96,365,208 3,001,776<br />
K.U. FILAR S.A., Szczecin 78.4 PLZ 2002 18,262,458 286,997<br />
K.U. FILAR-ZYCIE S.A., Szczecin 78.4 PLZ 2002 1,203,769 –1,887,890<br />
<strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong>, Wiesbaden 87.4 EUR 2002 838,104,852 247,464,575<br />
<strong>R+V</strong> Krankenversicherung <strong>AG</strong>, Wiesbaden 100.0 EUR 2002 9,905,231 1,100,000<br />
<strong>R+V</strong> Lebensversicherung <strong>AG</strong>, Wiesbaden 100.0 EUR 2002 216,350,836 –**<br />
<strong>R+V</strong> Luxembourg Lebensversicherung S.A., Strassen 99.9 EUR 2002 7,370,927 2,817,747<br />
<strong>R+V</strong> Pensionsfonds <strong>AG</strong>, Wiesbaden * 51.0 EUR 2002 9,166,962 –833,038<br />
<strong>R+V</strong> Poistóvna a.s., Bratislava 87.4 SKK 2002 6,323,194 –3,101,622<br />
<strong>R+V</strong> Rechtsschutzversicherung <strong>AG</strong>, Wiesbaden 100.0 EUR 2002 30,288,615 –**<br />
<strong>R+V</strong> Reinsurance Ireland Ltd., Dublin 100.0 EUR 2002 11,550,792 1,191,329<br />
Service, holding and real estate companies<br />
BWG Baugesellschaft Württembergischer Genossenschaften mbH, Stuttgart * 71.9 EUR 2001 10,723,292 1,202,488<br />
carexpert Kfz-Sachverständigen GmbH, Walluf 56.8 EUR 2001 4,251,798 145,727<br />
compertis Beratungsgesellschaft für betriebliches Vorsorgemanagement mbh,<br />
Wiesbaden 44.6 EUR 2001 2,702,853 –3,879<br />
GenoTel Gesellschaft für Telekommunikationsservice mbH, Frankfurt am Main 35.0 EUR 2001 1,124,586 239,512<br />
GWG Gesellschaft für Wohnungs- und Gewerbebau Baden-Württemberg <strong>AG</strong>,<br />
Stuttgart* 78.4 EUR 2002 42,794,010 3,990,023<br />
HANSEATICA Sechzehnte Grundbesitz Investitionsgesellschaft mbH & Co. KG,<br />
Hamburg 82.2 EUR 2001 –860,723 –562,646<br />
HGI Immobilien GmbH & Co. GB I KG, Frankfurt am Main 100.0 EUR 2002 21,094,396 –75,604<br />
HGI Real Estate LP, London * 100.0 GBP 2002 14,319,321 114,528<br />
HumanProtect Consulting GmbH, Cologne 44.6 EUR 2001 67,330 42,330<br />
KRAV<strong>AG</strong> Umweltschutz- und Sicherheitstechnik GmbH, Hamburg 51.0 EUR 2001 75,441 5,895<br />
Rhein-Main Assistance GmbH Gesellschaft für Service- und Beistandsleistungen,<br />
Wiesbaden 87.4 EUR 2001 7,334,757 1,966,192<br />
Rhein-Main Beteiligungs-GmbH, Wiesbaden 87.4 EUR 2001 935,469 42,631<br />
<strong>R+V</strong> Allgemeine Beteiligungs-GmbH, Wiesbaden 69.2 EUR 2002 49,672,611 1,204,915<br />
<strong>R+V</strong> Erste Anlage GmbH, Wiesbaden 87.4 EUR 2001 25,248 125<br />
<strong>R+V</strong> Erste Anlage GmbH & Co. Verwaltung KG, Wiesbaden 89.8 EUR 2001 11,375,260 10,945,276<br />
<strong>R+V</strong> Immobilien GmbH, Wiesbaden 100.0 EUR 2002 122,929,521 3,561,409<br />
<strong>R+V</strong> Immobilien GmbH & Co. KG Grundbesitzverwaltungsgesellschaft<br />
Kaufingerstraße, Wiesbaden 95.0 EUR 2002 22,282,961 1,257,580<br />
<strong>R+V</strong> KOMPOSIT Holding GmbH, Wiesbaden * 100.0 EUR 2002 1,554,648,708 –**<br />
<strong>R+V</strong> Kureck Immobilien GmbH, Wiesbaden 87.4 EUR 2001 36,535 11,535<br />
<strong>R+V</strong> Kureck Immobilien GmbH & Co. KG Grundstücksverwaltungsgesellschaft<br />
Adolfsberg, Wiesbaden 100.0 EUR 2002 3,499,363 76,493<br />
<strong>R+V</strong> Kureck Immobilien GmbH & Co. KG Grundstücksverwaltungsgesellschaft<br />
Hochhaus, Wiesbaden 87.4 EUR 2002 4,730,132 124,423<br />
<strong>R+V</strong> Kureck Immobilien GmbH & Co. KG Grundstücksverwaltungsgesellschaft<br />
Sonnenberger Straße 2/2a, Wiesbaden 87.4 EUR 2002 7,372,003 653,604<br />
<strong>R+V</strong> Kureck Immobilien GmbH & Co. KG Grundstücksverwaltungsgesellschaft<br />
Sonnenberger Straße 2b, Wiesbaden 100.0 EUR 2002 1,402,887 119,685<br />
<strong>R+V</strong> Kureck Immobilien GmbH & Co. KG Grundstücksverwaltungsgesellschaft<br />
Taunusstraße 1, Wiesbaden 100.0 EUR 2002 7,327,545 274,489<br />
<strong>R+V</strong> Kureck Immobilien GmbH & Co. KG Grundstücksverwaltungsgesellschaft<br />
Taunusstraße 3, Wiesbaden 100.0 EUR 2002 4,141,566 323,326<br />
44
Shares in affiliated companies<br />
Name and registered office of company Share of Currency Figures for Equity Result<br />
capital in % fiscal year € €<br />
<strong>R+V</strong> Personen Holding GmbH, Wiesbaden * 100.0 EUR 2002 250,227,254 –**<br />
<strong>R+V</strong> Real Estate Belgium N.V./S.A., Brussels 100.0 EUR 2001 6,666,854 –479,611<br />
<strong>R+V</strong> Rechtsschutz-Schadenregulierungs-GmbH, Wiesbaden 100.0 EUR 2001 23,690 –1,310<br />
<strong>R+V</strong> <strong>Versicherung</strong>sbetriebs-GmbH, Wiesbaden 87.4 EUR 2001 –536,479 –553,079<br />
Sprint Sanierung GmbH, Cologne 87.4 EUR 2001 970,349 –1,982,441<br />
UMB Umwelt- und Risikomanagement GmbH, Wiesbaden 87.4 EUR 2001 559,238 3,740<br />
WBS Wohnbau Selbsthilfe GmbH, Stuttgart * 90.0 EUR 2001 16,884,291 10,648,730<br />
* New shareholding<br />
** Profit transfer agreement<br />
*** KRAV<strong>AG</strong>-LEBEN was merged with <strong>R+V</strong> Lebensversicherung <strong>AG</strong> as of December 31, 2002<br />
Associates<br />
Name and registered office of company Share of Currency Figures for Equity Result<br />
capital in % fiscal year € €<br />
Finassimoco S.p.A., Segrate 46.5 EUR 2001 36,818,812 2,914<br />
PWR Holding GmbH, Munich 33.3 EUR 2001 91,919,696 5,629,837<br />
<strong>R+V</strong> Zweite HG-Beteiligungs GmbH, Wiesbaden 46.7 EUR 2001 5,140,108 766,097<br />
Seguros Generales Rural, S.A. de Seguros y Reaseguros, Madrid 26.2 EUR 2001 29,548,081 2,254,895<br />
TERTIANUM - Besitzgesellschaft Berlin Passauer Straße 5-7 mbH, Munich 25.0 EUR 2001 45,559,561 –865,385<br />
TERTIANUM - Besitzgesellschaft Konstanz Marktstätte 2-6 und<br />
Sigismundstraße 5-9 mbH, Munich 25.0 EUR 2001 64,613,050 175,608<br />
TERTIANUM Seniorenresidenzen Betriebsgesellschaft mbH, Constance 25.0 EUR 2001 2,250,174 –3,916,460<br />
Verwaltung HANSEATICA Sechzehnte Grundbesitz Investitionsgesellschaft mbH,<br />
Hamburg 42.8 EUR 2001 5,177 3,674<br />
45
Notes to the Balance Sheet<br />
Statement of Changes in Asset Items B, C I to III in fiscal year 2002<br />
B. Intangible assets<br />
1. Start-up and business expansion expenses in accordance with section 269 (1) sentence 1 HGB –<br />
2. Goodwill acquired –<br />
3. Other intangible assets 155<br />
Total B. 155<br />
C. Investments<br />
Values stated for previous fiscal year<br />
€ thou %<br />
C. I. Land, land rights and buildings including buildings on third-party land 4,242 0.3<br />
C. II. Investments in affiliated and associated companies<br />
1. Shares in affiliated companies 767,460 56.0<br />
2. Loans to affiliated companies 72,671 5.3<br />
3. Investments in associates 51,333 3.7<br />
4. Loans to associates – 0.0<br />
Total C II. 891,464 65.0<br />
C. III. Other financial investments<br />
1. Shares, investment certificates and other variable-yield securities 92,058 6.7<br />
2. Bearer bonds and other fixed-income securities 128,775 9.4<br />
3. Receivables from mortgages, land charges and annuity land charges – 0.0<br />
4. Other loans<br />
a. Registered bonds 166,388 12.2<br />
b. Notes receivable and loans 66,802 4.9<br />
c. Loans and advance payments on insurance policies – 0.0<br />
d. Miscellaneous loans 5,113 0.4<br />
5. Deposits with banks 10,787 0.8<br />
6. Miscellaneous investments 3,548 0.3<br />
Total C III. 473,471 34.7<br />
Total C. 1,369,177 100.0<br />
Total 1,369,332<br />
*) thereof currency write-ups: €264 thousand<br />
**) thereof currency write-downs: €21,587 thousand<br />
46
Additions Transfers Disposals Write-ups*) Write-downs**) Values stated for current fiscal year<br />
€ thou € thou € thou € thou € thou € thou %<br />
– – – – – –<br />
– – – – – –<br />
– – 132 – 22 1<br />
– – 132 – 22 1<br />
– – 172 – 65 4,005 0.2<br />
1,357,652 – 674,558 – – 1,450,555 67.5<br />
40,000 – 39,720 187 1,732 71,406 3.3<br />
12,905 – 406 – – 63,832 3.0<br />
1,069 – 1,069 – – – 0.0<br />
1,411,626 – 715,752 187 1,732 1,585,793 73.9<br />
2,885 – 8,442 – 3,957 82,544 3.8<br />
362,956 – 220,513 167 17,914 253,471 11.8<br />
– – – – – – 0.0<br />
– – 46,016 – – 120,371 5.6<br />
– – – – – 66,802 3.1<br />
– – – – – – 0.0<br />
4,000 – – – – 9,113 0.4<br />
11,353 – – – 2,523 19,617 0.9<br />
– – – – – 3,548 0.2<br />
381,194 – 274,971 167 24,394 555,467 25.9<br />
1,792,820 – 990,896 354 26,191 2,145,264 100.0<br />
1,792,820 991,028 354 26,213 2,145,265<br />
47
Assets<br />
C. Investments<br />
Present values of investments carried at cost thereof fixed assets in<br />
accordance with section 341 b (2) HGB<br />
Book value Present value Book value Present value<br />
Type of investment €m €m €m €m<br />
Land 4 9 – –<br />
Fixed-income securities 254 265 – –<br />
Other investments 1,602 3,309 52 48<br />
1,859 3,583 52 48<br />
The revaluation reserves of the investments carried at cost including fixed assets amount to €1,724 million net, or 80.4% of total investments.<br />
The reserves for investments carried at their nominal amount were not taken into account.<br />
Generally, present values were calculated on the basis of market prices, or using a simplified capitalized earnings value method.<br />
All three plots of land were last appraised in 2002.<br />
Where other carrying amounts have been used in individual cases, these correspond with the provisions of section 56 RechVersV.<br />
In accordance with section 341b HGB, investments in the amount of €51.9 million were allocated to fixed assets.<br />
This includes negative revaluation reserves in the amount of €3.9 million based on prices as of December 31, 2002.<br />
C.I. Land, land rights and buildings including buildings on third-party land<br />
The balance sheet value of land used predominantly by <strong>R+V</strong> companies amounts to €3,844,809.<br />
G. II. Other prepaid expenses 2002<br />
€<br />
Discount on subordinated loans 57,520<br />
Premium on investments 852,584<br />
Expenses relating to subsequent fiscal years 11,648,932<br />
12,559,036<br />
48
Equity and liabilities<br />
A. I. Subscribed capital 2002<br />
€<br />
The subscribed capital is composed of 8,701,000 no-par value shares (registered shares)<br />
As of Dec. 31 226,000,000<br />
The subscribed capital is unchanged as against December 31, 2001.<br />
DZ BANK <strong>AG</strong> Deutsche Zentral-Genossenschaftsbank <strong>AG</strong>, Frankfurt am Main,<br />
has informed us in accordance with section 20 (4) AktG that it holds a majority interest in our company.<br />
A. II. Capital reserves 2002<br />
€<br />
As of Dec. 31 429,590,228<br />
A. III. Revenue reserves 2002<br />
€<br />
2. Reserve for own shares<br />
Brought forward as of Jan. 1 1,583,458<br />
Reversal –1,583,458<br />
As of Dec. 31 –<br />
5. Other revenue reserves 2002<br />
€<br />
Brought forward as of Jan. 1 68,408,087<br />
Appropriations from the net retained profits of the previous year 6,150,000<br />
Appropriations from the net income for 2002 33,000,000<br />
As of Dec. 31 107,558,087<br />
K. Deferred income 2002<br />
€<br />
Discounts on investments 147,297<br />
Income relating to subsequent fiscal years 14,600<br />
As of Dec. 31 161,897<br />
Note<br />
There are no subordinated liabilities with a time to maturity of more than five years or liabilities secured by liens or similar rights.<br />
49
Notes to the Income Statement<br />
I. 1 a.) Gross premiums written 2002 2001<br />
€ €<br />
Property, health and casualty insurance 636,140,365 667,508,101<br />
Life insurance 321,745,389 361,034,983<br />
957,885,754 1,028,543,084<br />
I. 2. Allocated investment return 2002 2001<br />
€ €<br />
This relates to interest from the collateral provided to the previous insurers in the amount<br />
of the mathematical provision and the mathematical pension provision.<br />
The reinsurers’ share of reserves was calculated in line with the conditions of the reinsurance agreements<br />
and deducted correspondingly.<br />
50<br />
20,554,117 13,365,604<br />
I. 4. Claims incurred – net 2002 2001<br />
€ €<br />
The settlement of the provision for claims outstanding brought forward from the previous fiscal year<br />
resulted in a gross loss of €43 million.<br />
482,520,744 412,117,193<br />
II. 2 b.) Write-downs on investments 2002 2001<br />
€ €<br />
Regular write-downs 65,196 68,115<br />
Write-downs in line with section 253 (3) HGB 4,506,186 1,251,728<br />
4,571,382 1,319,842
Other Information<br />
Dr. Christopher Pleister<br />
– Chairman –<br />
President Bundesverband<br />
der Deutschen Volksbanken und<br />
Raiffeisenbanken e.V., Berlin<br />
Ulrich Birkenstock<br />
– Deputy Chairman –<br />
Chairman of the Central Works Council,<br />
<strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong>,<br />
Koblenz branch office<br />
Dr. Ulrich Brixner<br />
– Deputy Chairman –<br />
Chairman of the Board of Management,<br />
DZ BANK <strong>AG</strong><br />
Deutsche Zentral-Genossenschaftsbank,<br />
Frankfurt/Main<br />
Dr. Peter Aubin<br />
Chairman of the Board of Management,<br />
Volksbank Göppingen eG, Göppingen<br />
Uwe Brandenburg<br />
Chairman of the Board of Management,<br />
Lindener Volksbank eG, Hanover<br />
Ilona Brüssing<br />
Chair of the Works Council,<br />
Kassel-Erfurt branch office,<br />
<strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong><br />
(until December 31, 2002)<br />
Andreas Dichtl<br />
Chairman of the Board of Management,<br />
Volksbank Raiffeisenbank Berchtesgadener<br />
Land eG, Bad Reichenhall<br />
Peter Frenzel<br />
Senior specialist,<br />
<strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong>,<br />
Oldenburg branch office<br />
51<br />
Supervisory Board<br />
Rüdiger Habrik<br />
Member of the Works Council,<br />
Stuttgart branch office,<br />
<strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong><br />
(until June 30, 2002)<br />
Albrecht Hatton<br />
Chairman of the Board of Management,<br />
Volksbank Dessau/Anhalt eG, Dessau<br />
Peter Hermann<br />
Printer, <strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong>,<br />
Wiesbaden head office<br />
Karl-Heinz Moll<br />
Member of the Board of Management,<br />
WGZ-Bank Westdeutsche Genossenschafts-Zentralbank<br />
eG, Düsseldorf<br />
Manfred Nüssel<br />
President,<br />
Deutscher Raiffeisenverband e.V.,<br />
Bonn<br />
Hermann Rohrmeier<br />
Branch representative, VD Süd,<br />
<strong>R+V</strong> Allgemeine <strong>Versicherung</strong> <strong>AG</strong><br />
(as of July 1, 2002)<br />
Gerd Rück<br />
Director, <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>,<br />
Wiesbaden head office<br />
Armin Schmidt<br />
Deputy District Manager,<br />
Vereinte Dienstleistungsgewerkschaft ver.di,<br />
Wiesbaden<br />
Gudrun Schmidt<br />
Head of department,<br />
Vereinte Dienstleistungsgewerkschaft ver.di,<br />
Frankfurt/Main
Dr. Jürgen Förterer<br />
Chairman<br />
Wolfgang Kernbach<br />
(until December 31, 2002)<br />
Hans-Christian Marschler<br />
Bernhard Meyer<br />
Dr. Manfred Mücke<br />
Rainer Neumann<br />
Rainer Sauerwein<br />
Hans-Dieter Schnorrenberg<br />
Peter Weiler<br />
(as of September 1, 2002)<br />
Dr. Bernhard Zloch<br />
(until August 31, 2002)<br />
General representative of the<br />
Board of Management<br />
Dr. Christoph Bark, Lawyer<br />
Dr. Christoph Lamby<br />
(as of September 1, 2002)<br />
52<br />
Board of Management
Commission and other remuneration for insurance agents, personnel expenses 2002<br />
€<br />
1. Wages and salaries 15,192,173<br />
2. Social security costs 2,021,619<br />
3. Pension costs 1,760,316<br />
4. Total expenses 18,974,108<br />
Total remuneration of the members of the Board of Management in the fiscal year amounted to €1,639,545.<br />
Former members of the Board of Management and their surviving dependents received a total of €442,912.<br />
The provision for current pensions and pension entitlements for former members of the Board of Management<br />
and their surviving dependents amounts to €4,221,588.<br />
Expenses for the Supervisory Board amounted to €271,209 in the fiscal year.<br />
No amounts subject to disclosure in accordance with section 285 no. 9 c HGB were paid in the fiscal year.<br />
Number of employees<br />
In fiscal 2002, <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> employed an average of 230 people (2001: 221), of whom 221 were employed in Germany and 9 at the Singapore branch office.<br />
Contingent liabilities and other financial obligations<br />
Liabilities due to shares in cooperatives amount to €5,000. There are no further contingent liabilities within the meaning of section 251 HGB.<br />
Additional payment obligations<br />
Additional payment obligations exist in the amount of €7,669,378 in relation to shares in affiliated companies<br />
and in the amount of €11,888 in relation to shares in German insurance companies.<br />
Consolidated financial statements<br />
<strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> produces subgroup financial statements in accordance with the provisions of sections 290 ff HGB.<br />
These are filed with the Wiesbaden commercial register under HRB 7934.<br />
The subgroup financial statements of <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong> have been included in the higher-ranking consolidated financial statements<br />
of DZ BANK <strong>AG</strong> Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main. These are filed with the Frankfurt am Main commercial register under HRB 45651.<br />
Wiesbaden, April 8, 2003<br />
The Board of Management<br />
Dr. Förterer<br />
Marschler Meyer Dr. Mücke Neumann<br />
Sauerwein Schnorrenberg Weiler<br />
53
Auditors’ <strong>Report</strong><br />
We have audited the annual financial<br />
statements including the accounting and<br />
the management report of <strong>R+V</strong> <strong>Versicherung</strong><br />
<strong>AG</strong>, Wiesbaden, for the fiscal<br />
year from January 1, 2002 to December 31,<br />
2002. The maintenance of the books and<br />
records and the preparation of the annual<br />
financial statements and the management<br />
report in accordance with the provisions of<br />
the HGB (Handelsgesetzbuch – German<br />
Commercial Code) and the supplementary<br />
provisions of the Articles of Association are<br />
the responsibility of the Board of Management<br />
of the Company. Our responsibility is<br />
to express an opinion on the annual financial<br />
statements, including the accounting<br />
and the management report, based on our<br />
audit.<br />
We conducted our audit of the annual financial<br />
statements in accordance with section<br />
317 HGB and the generally accepted standards<br />
for the audit of financial statements<br />
promulgated by the Institut der Wirtschaftsprüfer<br />
(IDW). Those standards require that<br />
we plan and perform the audit such that<br />
misstatements materially affecting the<br />
presentation of the net assets, financial<br />
position and results of operations in the<br />
annual financial statements in accordance<br />
with German principles of proper accounting<br />
and in the management report are<br />
detected with reasonable assurance.<br />
Knowledge of the business activities and<br />
the economic and legal environment of<br />
the Company and evaluations of possible<br />
misstatements are taken into account in<br />
the determination of audit procedures.<br />
54<br />
The effectiveness of the internal accounting<br />
control system and the evidence supporting<br />
the disclosures in the books and records,<br />
the annual financial statements and the<br />
management report are examined primarily<br />
on a test basis within the framework of the<br />
audit. The audit includes assessing the<br />
accounting principles used and significant<br />
estimates made by the Board of Management,<br />
as well as evaluating the overall presentation<br />
of the financial statements and<br />
the management report. We believe that our<br />
audit provides a reasonable basis for our<br />
opinion.<br />
Our audit did not give rise to any<br />
reservations.<br />
In our opinion, the annual financial statements<br />
give a true and fair view of the net<br />
assets, financial position and results of<br />
operations of the Company in accordance<br />
with German principles of proper accounting.<br />
On the whole, the management report<br />
provides a suitable understanding of the<br />
Company’s position and suitably presents<br />
the risks of future development.<br />
Cologne, April 8, 2003<br />
KPMG<br />
Deutsche Treuhand-Gesellschaft<br />
Aktiengesellschaft<br />
Wirtschaftsprüfungsgesellschaft<br />
Prof. Dr. Geib Fleischerowitz<br />
Wirtschaftsprüfer Wirtschaftsprüfer
<strong>Report</strong> of the<br />
Supervisory Board<br />
The Supervisory Board was regularly<br />
informed in written and oral reports by<br />
the Board of Management on the current<br />
position of the Company and particular<br />
transactions during fiscal 2002, and supervised<br />
management on the basis of these<br />
reports.<br />
The present financial statements for fiscal<br />
2002, the management report, the consolidated<br />
financial statements and the consolidated<br />
management report for fiscal 2002<br />
were examined by the Supervisory Board.<br />
The auditor responsible was present during<br />
the meeting of the Supervisory Board’s<br />
audit committee and was available to give<br />
all additional explanations and opinions<br />
required. No reservations were made in<br />
relation to the statements.<br />
The Supervisory Board concurs with the<br />
audit opinion of the auditing firm KPMG<br />
Deutsche Treuhand-Gesellschaft <strong>AG</strong>, which<br />
was appointed in accordance with section<br />
341 k HGB and which issued an unqualified<br />
opinion.<br />
The Supervisory Board concurs with the<br />
proposal of the Board of Management on<br />
the appropriation of the net retained profits<br />
of <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong>. The annual financial<br />
statements for <strong>R+V</strong> <strong>Versicherung</strong> <strong>AG</strong><br />
prepared by the Board of Management<br />
for fiscal 2002 have been approved and<br />
hence adopted in accordance with section<br />
172 AktG.<br />
55<br />
The related parties report prepared by<br />
the Board of Management and the audit<br />
opinion on this prepared by the auditors<br />
were submitted to the members of the<br />
Supervisory Board and examined.<br />
The auditors issued the following audit<br />
opinion on the report by the Board of<br />
Management on related parties:<br />
“On completion of our audit in accordance<br />
with professional standards, we confirm<br />
that<br />
1. the factual statements made in the report<br />
are correct,<br />
2. the remuneration paid by the Company<br />
with respect to the transactions listed in<br />
the report was not inappropriately high.”<br />
We concur with this opinion and raise no<br />
reservations to the closing declarations<br />
made by the Board of Management in the<br />
report on related parties.<br />
Wiesbaden, April 11, 2003<br />
The Supervisory Board<br />
Dr. Pleister<br />
Chairman