Gothaer Allgemeine Versicherung AG Group Annual Report for ...
Gothaer Allgemeine Versicherung AG Group Annual Report for ...
Gothaer Allgemeine Versicherung AG Group Annual Report for ...
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Management <strong>Report</strong><br />
Capital management<br />
Capitalization<br />
For insurance groups, capitalization is a key variable or parameter <strong>for</strong> the assessment of<br />
risk-bearing capacity and thus an important per<strong>for</strong>mance indicator. Capital management<br />
by our parent group headed by <strong>Gothaer</strong> <strong>Versicherung</strong>sbank VVaG ensures that adequate<br />
capital is always available to meet the operational needs of the <strong>Group</strong>'s companies and<br />
capital is optimally used and harnessed within the <strong>Group</strong>. This allows us to comply with<br />
legal provisions as well as with the requirements of regulatory authorities, rating agencies,<br />
analysts and clients, all of which have become significantly more exigent in recent<br />
years. Major constituents of capital management within the <strong>Group</strong> are risk-oriented<br />
controls and asset liability management (ALM).<br />
The equity of the <strong>Gothaer</strong> <strong>Allgemeine</strong> <strong>Group</strong> totalled € 1.00 billion (PY: € 1.04 billion) at<br />
the end of the financial year. <strong>Group</strong> equity includes the subscribed capital and capital<br />
reserves of the group parent entity <strong>Gothaer</strong> <strong>Allgemeine</strong> <strong>Versicherung</strong> <strong>AG</strong> as well as<br />
revenue reserves. Revenue reserves include both the revenue reserves of <strong>Gothaer</strong> <strong>Allgemeine</strong><br />
<strong>Versicherung</strong> <strong>AG</strong> and the earnings generated by our consolidated companies after<br />
initial consolidation. Also taken into account in the equity of the <strong>Gothaer</strong> <strong>Allgemeine</strong><br />
<strong>Group</strong> are the unrealized gains and losses on investments available <strong>for</strong> sale. Changes in<br />
equity are shown on page 47.<br />
As well as equity, capital management also covered subordinated liabilities of € 252.5<br />
million (PY: € 250.0 million). Management of debt financing in the <strong>for</strong>m of bonds and<br />
loans also <strong>for</strong>ms part of capital management. As of 31 December 2011, <strong>Gothaer</strong> <strong>Allgemeine</strong><br />
<strong>Group</strong> bonds and loans totalled an unchanged € 65.1 million.<br />
The debt ratio of the <strong>Group</strong> (defined as debt capital, i.e. bonds and loans including noneligible<br />
hybrid capital as a percentage of <strong>Group</strong> equity plus eligible hybrid capital) was<br />
25.3 % (PY: 24.3 %). Eligible hybrid capital was taken into account here on a very conservative<br />
basis at the amount permitted by section 53c (Solvency Regulation) of the German<br />
Insurance Supervision Act (V<strong>AG</strong>). The debt ratio is thus a maximum figure.<br />
Capitalization<br />
Breakdown by type of capital<br />
€ million<br />
2011 2010<br />
Equity 1,004.4 1,039.4<br />
Subordinate liabilities 252.5 250.0<br />
Bonds and loans 65.1 65.1<br />
Total 1,322.0 1,354.5<br />
<strong>Gothaer</strong> <strong>Allgemeine</strong> <strong>Group</strong> <strong>Annual</strong> <strong>Report</strong> 2011 15
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