Annual Report 2010 - Hannover Re

Opportunity and risk report
Overriding goals and organisation of
risk management
Risk report
Operationalisation of strategy
The risk strategy derived from the corporate strategy constitutes
the basis for our handling of risks and opportunities. The
parameters and decisions of the Executive Board with respect
to Hannover Re’s risk appetite are fundamental to the acceptance
of risks. The risk strategy – as a self-contained set of
rules – serves as the foundation for Group-wide risk management.
It is an integral component of the guidelines for risk
monitoring and risk steering and is reflected on the various
levels of risk management and in the operational guidelines.
The corporate strategy and risk strategy as well as the guidelines
derived from them are subject to regular review. Through
this scrutiny of our assumptions and any resulting adjustments,
we ensure that our guidelines and hence the principles
on which our actions are based are always kept up-to-date.
The insights obtained establish a framework for decisionmaking
on all management levels by bringing transparency to
the relationship between opportunities and risks.
The overriding goal of our risk management is to adhere to
the strategically defined risk positions of the Hannover Re
Group which are enshrined in our risk strategy. In order to
ensure that our shareholders’ equity is protected, we seek to
manage and control individual risks such that the total risk
remains within the permissible defined tolerances. Divergences
may occur as a result of external influencing factors, and the
company must always be in a position to immediately initiate
appropriate countermeasures. We attach central importance
to the following aspects:
• Regular review of the efficiency of systems and, as appropriate,
adjustment to the business environment and/or the
changed risk situation
• Separation of functions between divisions that manage risks,
on the one hand, and those that monitor risks, on the other
• Process-independent monitoring by Internal Auditing
• Systematic and comprehensive monitoring of all conceivable
risks from the current perspective that could jeopardise the
company’s profitability or continued existence with the aid
of efficient and practice-oriented management and control
systems
Management report
Operationalisation of the risk strategy
Corporate
strategy
Risk strategy
Framework guideline
on risk management
Limit and threshold system for the
material risks of the Hannover Re Group
Central guidelines: investments, exposure management, central
underwriting guidelines (non-life and life/health reinsurance) …
Local guidelines: e.g. local underwriting guidelines, signature rules,
local contingency plans, deputising arrangements
Hannover Re Group annual report 2010
opportunity and risk report Management report
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