Annual Report 2003 - Hannover Re

Notes
notes on the individual items
5.3 Contracts with no technical risk
We have identified insurance contracts which do not satisfy the requirements of SFAS 113 "Accounting
and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts". These involve
reinsurance treaties under which the risk transfer between the ceding company and the reinsurer is of
merely subordinate importance. With the exception of the contractually agreed fee payable by the ceding
company, these contracts were eliminated in full from the technical account. The profit components were
netted under other income/expenses. The payment flows resulting from these contracts were reported
in the cash flow statement under financing activities. Technical amounts were shown as net changes
in contract deposits, the fair values of which corresponded approximately to their book values.
5.4 Goodwill; present value of future profits on acquired
life reinsurance portfolios
In accordance with SFAS 142 "Goodwill and Other Intangible Assets" scheduled amortisation is no
longer taken on goodwill. Goodwill was tested for impairment in a two-step fair value process.
Development of goodwill
Figures in EUR thousand
2003 2002
Goodwill net as at 1 January 233 883 263 258
Currency exchange rate differences (28 896) (30 132)
204 987 233 126
Additions 17 1 945
Disposals 565 –
Impairments 820 1 188
Goodwill net as at 31 December 203 619 233 883
The impairments reported in the financial year were primarily attributable to a company consolidated
at equity and a subsidiary of Hannover Reinsurance Group Africa.
The disposals resulted from the sale of the shares held by Hannover Rück Beteiligung Verwaltungs-
GmbH in E+S Rück to the Barmenia Group (see also section 6.1 "Transactions with related parties").
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