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<strong>Annual</strong> <strong>financial</strong> <strong>statements</strong> and<br />

management report <strong>2010</strong>


Contents<br />

Interview with the Chairman of the Board of Management 5<br />

Management report 11<br />

Macroeconomic background 12<br />

Background conditions in the credit insurance market 13<br />

Business development 14<br />

Direct underwriting business 15<br />

Inwards reinsurance business 18<br />

Net assets position 19<br />

Non-underwriting business 19<br />

Significant events after the balance sheet date 20<br />

Relations to affiliated companies 20<br />

Risk report 21<br />

Forecast and outlook 27<br />

Export credit guarantee scheme of the<br />

Federal Republic of Germany 31<br />

<strong>Annual</strong> <strong>financial</strong> <strong>statements</strong> <strong>2010</strong> 35<br />

Balance sheet 36<br />

Income statement 38<br />

Notes to the <strong>financial</strong> <strong>statements</strong> 41<br />

Governing bodies of the Company 42<br />

Balance sheet / assets 44<br />

Balance sheet / equity and liabilities 49<br />

Income statement 53<br />

Auditor’s report 59<br />

Report of the Supervisory Board 63<br />

Contacts 67<br />

3


Interview with the<br />

Chairman of the<br />

Board of Management<br />

We asked Ralf Meurer, Chairman of the<br />

Board of Management of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG, to tell us about the<br />

development of the Company’s business<br />

and other topics of importance over the<br />

past business year.<br />

What is your assessment of global economic<br />

developments over the past year?<br />

Following a rapid global decline, economic<br />

recovery set in much earlier and much more<br />

intensively than all the economic experts<br />

had been predicting. State economic stimulus<br />

programmes and the expansive monetary<br />

policy of many governments helped<br />

global gross domestic product to rise by 4<br />

per cent even during the past year. The fact<br />

that world trade picked up again also contributed<br />

to the stimulus in the economy.<br />

The German economy has recovered from<br />

the deep recession much faster, and above<br />

all significantly better, than the other large<br />

European economies. After the 4.7 per cent<br />

slide in 2009, gross domestic product rose by<br />

3.6 per cent in <strong>2010</strong>. It is noticeable that the<br />

recovery has broadened out, with growth<br />

being fuelled not only by growing demand<br />

from abroad, but also by the strong rise in<br />

domestic demand.<br />

How has <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-<br />

AG fared over the past year?<br />

Our gross earned premiums grew by 4.9 per<br />

cent to EUR 729.8 million, and the recovery<br />

of the economy from the world-wide consequences<br />

of the <strong>financial</strong> crisis meant that<br />

the gross claims ratio for the business year<br />

improved to 37.5 per cent. The decline in the<br />

claims ratio together with the rise in premium<br />

income has resulted in premium<br />

refunds to our policyholders rising by 59.2<br />

per cent to EUR 55.8 million. Coverage<br />

volumes for assumed risks in our main<br />

segment of commercial credit insurance<br />

increased by 14.6 per cent to EUR 181.1 billion,<br />

already surpassing the figure of<br />

EUR 179.0 billion in the pre-crisis year 2008.<br />

5


How would you describe the way the credit<br />

insurance market is developing?<br />

Now that the <strong>financial</strong> crisis is over and the<br />

economies of Germany and its main export<br />

markets have seen a quick recovery, we are<br />

expecting a continued rise in the turnover<br />

volumes of policyholders, albeit slightly<br />

lower than in <strong>2010</strong>. Despite these positive<br />

background conditions, a decline in the<br />

likelihood of bankruptcy combined with<br />

strong competition in the credit insurance<br />

market mean that, on the one hand, prices<br />

for credit insurance will be squeezed. On the<br />

other hand, growth in new business and<br />

changes in premiums might go down.<br />

6<br />

Over the past two years 22 local <strong>Euler</strong> <strong>Hermes</strong><br />

dialogue sessions have been held with<br />

customers. What feedback have you been<br />

receiving from your customers?<br />

In these economically difficult times, we felt<br />

it was important to seek more face-to-face<br />

dialogue with our customers. So the year<br />

before last we quite deliberately took on our<br />

customers’ critical questions and observations,<br />

as that was the only way we would be<br />

able to see what we have been doing right<br />

and where they see potential for improvement.<br />

On the one hand, we have been shown<br />

understanding for the measures we have<br />

had to put in place, but on the other hand, of<br />

course, criticism has been expressed. Above<br />

all, our customers expect to be informed


promptly in the event of a deterioration in<br />

creditworthiness so that they can be well<br />

prepared to face changes. Apart from providing<br />

this important early warning function,<br />

payment of our customers’ claims was<br />

of course seen as especially important – and<br />

we did this, paying out approx. EUR 400 million<br />

in claims in 2009 alone. We have taken<br />

our customers’ feedback very seriously and<br />

have already done a great deal in <strong>2010</strong> to<br />

achieve targeted improvements. We have<br />

been actively informing our customers<br />

nationwide about these in the dialogue<br />

sessions held during the past year.<br />

What specific improvements have you presented<br />

to your customers at these events?<br />

Our customers’ feedback has shown us that<br />

our improvements in the area of risk policy<br />

and customer service have been noticed.<br />

What have we achieved in concrete terms?<br />

We have returned in the mean time to a risk<br />

policy which nearly matches the pre-economic<br />

collapse level. This means that we<br />

have achieved a significant increase in the<br />

acceptance rate. In this connection, we have<br />

also quickly revised credit decisions for<br />

which we have been able to make a more<br />

Facts and figures on <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG<br />

◽ AA rating from Standard & Poor's<br />

◽ 49% market share<br />

◽ more than 14,000 customers<br />

◽ annual turnover of EUR 729.8 million<br />

◽ coverage volume of around EUR 181 billion<br />

◽ local presence in 13 German cities and responsible<br />

within the <strong>Euler</strong> <strong>Hermes</strong> Group for the Austrian and<br />

Swiss markets<br />

◽ nearly 1,600 employees in Germany<br />

positive assessment in the course of the past<br />

year. Finally, we have invested a seven-figure<br />

sum in improving our IT systems and in the<br />

process, have been working on making the<br />

communication of decisions faster and<br />

more transparent and on making ourselves<br />

even more accessible – and we are still<br />

working on this.<br />

What have your customers especially praised<br />

at these sessions and subsequently?<br />

Firstly, the way we have at Board of Management<br />

level actively been seeking dialogue<br />

with our customers and listening to them<br />

openly and honestly in discussions and conversations,<br />

and that we can accept criticism,<br />

has been seen as especially positive.<br />

In terms of content, our customers have<br />

praised our activities and the measures we<br />

have signalled for the future. We will be<br />

working intensively on accelerating our IT<br />

processes, thus further reducing processing<br />

periods for our customers. Ongoing investment<br />

in the development of our know-how<br />

in key industries will strengthen our ability<br />

to give advice. Increasing the number of our<br />

customer service staff as well as our new<br />

online service, such as the introduction of<br />

EOLIS, will also contribute to improvements<br />

in the service we offer. And not least, we will<br />

be strengthening our core competence, the<br />

obtaining of information, especially in the<br />

markets of the future.<br />

So I am convinced that step by step we will<br />

be able to offer our customers an even better<br />

service in the course of the next few years.<br />

7


8<br />

What developments are you expecting this<br />

year?<br />

I am guardedly positive about the global<br />

outlook. We forecast that the upswing in the<br />

global economy will continue, albeit more<br />

slowly, despite uncertainties. The spending<br />

cuts that have been decided on to consolidate<br />

public budgets will have a dampening<br />

effect on growth, especially in the highly<br />

indebted peripheral countries in the eurozone.<br />

We anticipate that global gross<br />

domestic product will grow by 3 per cent in<br />

2011. The outlook for the German economy<br />

remains positive, though we forecast that<br />

there will be a slight weakening in economic<br />

growth. We have already been bolstering<br />

this recovery in <strong>2010</strong> with a significant<br />

expansion of our underwriting policy. This<br />

rise in acceptances of insolvency risks and if<br />

necessary other risk measures could mean a<br />

continuous rise in our claims expenditures<br />

in the course of 2011.


Management report<br />

11


Management report<br />

Macroeconomic background<br />

12<br />

In <strong>2010</strong>, the global economy overcame the<br />

most severe set-back it had suffered in the<br />

past few decades, caused by the <strong>financial</strong> crisis,<br />

and returned to growth. From the negative<br />

growth figure of minus 2.0 per cent in the<br />

previous year, global gross domestic product<br />

climbed by 4.0 per cent in <strong>2010</strong>. World trade,<br />

too, picked up strongly after its previous collapse.<br />

The process of recovery was crucially<br />

supported in the first half of the year by the<br />

expansionary monetary policy of many<br />

industrialised countries and by government<br />

stimulation programmes. This global trend<br />

was not, however, uniform, but showed large<br />

regional differences. While the economies of<br />

the Asian emerging markets, especially<br />

China, were expanding strongly, growth in<br />

the USA remained comparatively weak. In<br />

Europe, economic growth was on the whole<br />

sluggish. The outlook is cautiously optimistic.<br />

<strong>Euler</strong> <strong>Hermes</strong> expects the world economy<br />

to continue to grow, albeit more slowly,<br />

despite uncertainties. With the overall trend<br />

remaining heterogeneous, the <strong>financial</strong> and<br />

economic crisis will leave traces in many<br />

industrialised countries. The public spending<br />

cuts that have been initiated to achieve<br />

budget consolidation, especially in the<br />

highly indebted peripheral states of the<br />

eurozone, are having a dampening effect on<br />

growth. Overall, growth of 3.0 per cent in<br />

global gross domestic product is expected in<br />

2011, rising to growth of 3.3 per cent in 2012.<br />

The German economy has recovered from<br />

its deep recession considerably faster and,<br />

above all, significantly better than economic<br />

forecasters had been predicting. Following<br />

the 4.7 per cent collapse in 2009, gross<br />

domestic product rose by 3.6 per cent in<br />

<strong>2010</strong> in a broad-based recovery, with growth<br />

driven not only by increased demand from<br />

abroad, but also by a strong rise in domestic<br />

demand. While the outlook for the German<br />

economy remains positive, <strong>Euler</strong> <strong>Hermes</strong><br />

forecasts that growth in the global economy<br />

will weaken slightly going forward to 2012.<br />

The rise in global economic growth is<br />

reflected in the slight reduction in the rate of<br />

insolvencies internationally. The global<br />

insolvency index compiled by <strong>Euler</strong> <strong>Hermes</strong><br />

fell by 4.0 per cent in <strong>2010</strong>, while a fall of 5.0<br />

per cent is forecast for 2011. This does not in<br />

the least, however, mean that the preceding<br />

staggering rise resulting from the deep<br />

recession in the global economy has been<br />

levelled; the global insolvency index will still<br />

be higher in 2011 than the previous peaks of<br />

2002 and the mid 1990s. In Germany, the<br />

upswing has led to a reversal of the trend in<br />

insolvencies; following a slight reduction in<br />

<strong>2010</strong>, a more significant decline is expected<br />

for 2011, although the pre-crisis level of<br />

fewer than 30,000 insolvencies will not yet<br />

be regained.


Management report<br />

Background conditions in the credit insurance market<br />

Since early <strong>2010</strong>, the German economy has<br />

been experiencing a surprisingly strong and<br />

rapid recovery which has stimulated sales.<br />

This has been accompanied by a concomitant<br />

increase in the volume of supplier<br />

credits companies grant each other. The credit<br />

insurers are supporting this strong upswing<br />

in the economy by extending insurance<br />

coverage. In this market environment, <strong>Euler</strong><br />

<strong>Hermes</strong> continued to lead ahead of Coface<br />

and Atradius.<br />

Based on figures from all four quarters of<br />

<strong>2010</strong>, the insurance industry association<br />

Gesamtverband der Deutschen Versiche -<br />

rungs wirtschaft (GDV) has calculated that<br />

gross premiums from credit insurance,<br />

bonds & guarantees and fidelity insurance<br />

business rose to approx. EUR 1.353 (prev.<br />

year: 1.246) billion in <strong>2010</strong>. This represents<br />

growth of 8.6 per cent compared with the<br />

previous year.<br />

Gross premiums and gross claims expend -<br />

iture developed very differently in the different<br />

insurance categories.<br />

In commercial credit insurance, gross premiums<br />

increased in the full year by 7.4 per<br />

cent to approx. EUR 819 (prev. year: 762) million,<br />

even though the number of contracts<br />

declined by almost 2,000 (–4.5 per cent)<br />

to approx. 41,500. The coverage extended<br />

by the credit insurers rose by 13.7 per cent<br />

to approx. EUR 319 billion. Gross claims<br />

ex penditure up to the year-end reduced in<br />

com parison with the previous year by<br />

–60.9 (prev. year: 28.1) per cent to approx.<br />

EUR 278 (prev. year: approx. 711) million.<br />

Bonds & guarantees insurance business<br />

showed a significant rise in premium<br />

income in <strong>2010</strong>, by 14.4 (prev. year: 3.4) per<br />

cent to approx. EUR 391 (prev. year: 342) million.<br />

The claims ratio improved in the<br />

course of the year from 31.0 to 30.0 per cent.<br />

These figures reflect the continuing good<br />

state of orders in the construction industry,<br />

which with the machinery and plant engin -<br />

eering industry is the main customer segment<br />

for bonds & guarantees insurers.<br />

Gross premium income for fidelity insurance<br />

grew only slightly in <strong>2010</strong>, by 0.6 per<br />

cent to approx. EUR 143 million. The claims<br />

ratio rose in the course of the year by 4.0<br />

percentage points to 64.0 per cent. The<br />

fidelity insurers attribute this rise to the<br />

higher risk management requirements of<br />

the insured companies, with losses now<br />

being covered that had frequently not been<br />

recognised previously.<br />

The extension of coverage guarantees by the<br />

federal government for short-term business<br />

beyond <strong>2010</strong> has been the subject of intense<br />

discussions between the Federal Ministry of<br />

Finance and the credit insurers. It has<br />

become clear that there is no longer any<br />

need for these measures, made necessary by<br />

the crisis, to be extended. The private credit<br />

insurers have, therefore, undertaken to take<br />

over all coverage guarantees by the federal<br />

government that are still currently in force<br />

for short-term business with customers in<br />

the EU and core OECD countries at, with few<br />

exceptions, normal market prices and to<br />

uphold them for a period of at least six<br />

months.<br />

13


Management report<br />

Business development<br />

14<br />

Summary<br />

Gross premiums earned by <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG in this business<br />

year rose by 4.9 per cent to EUR 729.8 (prev.<br />

year: 695.8) million.<br />

In the direct underwriting business, gross<br />

premiums earned rose by 6.6 per cent to<br />

EUR 666.1 (prev. year: 624.9) million. The<br />

main share of this rise occurred in the German<br />

market, with EUR 38.1 million, and<br />

Switzerland with EUR 7.3 million. Premium<br />

income in Singapore, Hong Kong and Japan<br />

maintained its level of the previous year.<br />

Due to the Company’s withdrawal from the<br />

Baltic states of Estonia, Latvia and Lithuania,<br />

sales in that region sank by EUR 4.9 million.<br />

The operation in Romania earned premiums<br />

of EUR 2.0 (prev. year: 1.2) million in its se -<br />

cond year of business.<br />

As in the previous years, inwards reinsurance<br />

business fell, since the credit insurance<br />

business undertaken by the companies in<br />

the Group has been transferred to the<br />

Group’s own newly established <strong>Euler</strong> <strong>Hermes</strong><br />

reinsurance company. As expected, pre -<br />

miums fell by 10.1 per cent to EUR 63.7 (prev.<br />

year: 70.9) million. This fall can be seen<br />

especially with European business, which<br />

fell by 22.8 per cent to EUR 34.3 (prev. year:<br />

44.4) million. In contrast, reinsurance business<br />

in Asia rose slightly by EUR 2.9 million<br />

to EUR 29.4 (prev. year: 26.5) million.<br />

With the economy having recovered from<br />

the global economic consequences of the<br />

<strong>financial</strong> crisis, the gross claims ratio for the<br />

reporting year improved, at 37.5 (prev. year:<br />

92.2) per cent. Only the reinsurance business<br />

still had a comparatively high claims<br />

ratio at 54.4 per cent.<br />

This rapid economic recovery was bolstered<br />

by run-off profits from past underwriting<br />

years, which increased by EUR 58.2 million<br />

to EUR 167.3 million. This increase in run-off<br />

profits is attributable both to the direct<br />

underwriting business, for which the run-off<br />

profits rose by EUR 50.6 million, and the<br />

reinsurance business, with revenues higher<br />

by EUR 7.6 million.<br />

The fall in claims ratios, combined with the<br />

rise in premium income, has resulted in a<br />

rise in premium refunds to policyholders by<br />

59.2 per cent to EUR 55.8 (prev. year: 35.0)<br />

million. Of these premium refunds, EUR 49.4<br />

(prev. year: 29.3) million are attributable to<br />

the commercial credit insurance business,<br />

for which premiums were refunded primar -<br />

ily in Germany.<br />

Due to the strong decline in the net claims<br />

ratios to below the long-term average,<br />

EUR 134.8 million were allocated to the claims<br />

equalisation reserve, whereas even in the<br />

previous year EUR 24.0 million had been<br />

withdrawn. Allocations were made in all<br />

business sections except fidelity insurance.<br />

Regional responsibilities within the <strong>Euler</strong><br />

<strong>Hermes</strong> Group were redistributed in the<br />

<strong>2010</strong> business year as part of the “One EH”<br />

project. Selected initiatives continued to be<br />

started in order to improve customer orientation<br />

and enhance the productivity and<br />

flexibility of <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

on the basis of the uniform<br />

group structures. The various measures<br />

have been gathered into the “Excellence”<br />

project. Reserves of EUR 33.6 million were<br />

formed in the <strong>2010</strong> business year to cover<br />

the expenditures involved in the restructuring<br />

associated with this. This expenditure is<br />

included in the “Other non-underwriting<br />

result” and represents 10.8 per cent of the<br />

premiums earned.


Investment income rose in the reporting<br />

year by 11.0 per cent to EUR 78.9 (prev. year:<br />

71.1) million. This rise is mainly due to the<br />

sale of four subsidiaries in Poland, Hungary,<br />

Slovakia and Romania. These subsidiaries<br />

were sold due to new regional responsibil -<br />

ities within the <strong>Euler</strong> <strong>Hermes</strong> Group, bringing<br />

proceeds of EUR 31.4 million. The entrepreneurial<br />

purpose of the companies which<br />

were sold, and which continue to be active<br />

in the market, is the acquisition and sale of<br />

risk information and the collection of receivables<br />

in their respective regions. Against the<br />

profits from this sale, dividends from subsidiaries<br />

and associated companies fell by<br />

38.2 per cent to EUR 16.8 (prev. year: 27.1)<br />

million. This decline can be attributed to the<br />

way the business of the subsidiaries<br />

Direct underwriting business<br />

As a result of the fast economic recovery in<br />

Germany and in its most important export<br />

markets, the turnover of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG’s policyholders has<br />

also risen notably. This growth was bolstered<br />

by the fact that <strong>Euler</strong> <strong>Hermes</strong> Kredit -<br />

versicherungs-AG had relaxed its risk policy<br />

in the past business year, again granting<br />

increased limits amounting to an additional<br />

EUR 16.4 billion.<br />

This increase is reflected in the premium<br />

income of our own underwriting business,<br />

which was increased by 6.6 per cent to<br />

EUR 666.1 (prev. year: 624.9) million. Of the<br />

total growth of EUR 41.2 million, credit<br />

insurance accounted for EUR 38.1 million<br />

and bonds & guarantees for EUR 3.6 million.<br />

Fidelity insurance and consumer credit<br />

insurance were slightly below previous<br />

year’s levels.<br />

Management report<br />

developed during the economic and <strong>financial</strong><br />

crisis in the previous year. As in the previous<br />

year, no investments were undertaken in<br />

listed public companies, with shares merely<br />

being held in subsidiaries and associated<br />

companies with an operational connection<br />

to the credit insurance business. Additionally,<br />

a further 25.1 per cent holding was<br />

acquired in the <strong>Euler</strong> <strong>Hermes</strong> insurance<br />

company in Hungary, which is thus now a<br />

wholly owned subsidiary of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG. Earnings from<br />

fixed-income securities and balances on<br />

current accounts remained at more or less<br />

the same level as in the previous year, in<br />

spite of an increased inventory, due to interest<br />

rate trends.<br />

This business year’s gross claims ratio of<br />

35.9 (prev. year: 91.6) per cent is clearly<br />

below its previous year’s level. The decrease<br />

in gross claims expenditure in this business<br />

year by EUR 333.6 to 239.1 (prev. year: 572.7)<br />

million goes along with the general economic<br />

recovery and is mainly due to the<br />

decreasing claims ratio in the credit insurance<br />

business. By contrast, the claims<br />

expenditure of fidelity insurance increased<br />

in this business year to EUR 41.6 (prev. year:<br />

29.4) million, and of bonds & guarantees,<br />

which rose to EUR 24.9 (prev. year: 22.9) million.<br />

15


Management report<br />

16<br />

Commercial credit insurance<br />

With 72.3 per cent of gross premiums written,<br />

commercial credit insurance is by far<br />

the largest business of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG in terms of turnover.<br />

In this business year gross premiums written<br />

increased by EUR 35.4 million to EUR 481.7<br />

(prev. year: 446.3) million. The increase in<br />

premiums can be primarily explained by the<br />

general economic development and the<br />

growth in turnover of our clients. In add -<br />

ition, the elevated volume of coverage and<br />

the higher price level also had a positive<br />

impact on the premium income. Furthermore,<br />

our business in the segment of major<br />

multinational clients continued to be very<br />

positive.<br />

The volume of coverage of insured risks<br />

increased in the reporting period by 14.6 per<br />

cent to EUR 181.1 (prev. year: 158.0) billion,<br />

which was primarily a result of the improving<br />

economic situation and the higher<br />

cove r age required because of the growing<br />

turnover of our clients. With 62 per cent, the<br />

share of German risks is at the previous year’s<br />

level. With 940,000 applications, there were<br />

Consumer credit insurance<br />

Gross premiums written by the consumer<br />

credit insurance declined over the previous<br />

year by 3.9 per cent to EUR 6.4 (prev. year:<br />

6.7) million. The main reason for this<br />

decline was restraint on the part of the<br />

insured credit institutions in granting credit,<br />

which led to a lower income in premiums.<br />

The number of settled claims continued to<br />

decline notably compared to the previous<br />

year, by –13.1 per cent. Gross expenditure in<br />

this business year decreased by 4.9 per cent<br />

to EUR 5.9 (prev. year: 6.2) million.<br />

The consumer credit insurance business<br />

had a run-off profit of EUR 3.7 (prev. year:<br />

4.8) million. This run-off profit resulted from<br />

loss recovery for previous years and the<br />

3.2 per cent more requests for insurance<br />

cover than in the previous year. The number<br />

of active risks covered also rose by 0.5 per<br />

cent to 615,000. This merely slight increase<br />

was due to the high number of insolvencies<br />

in the year 2009 and the large number of terminated<br />

insurance contracts. These new figures<br />

include, compared to the previous year,<br />

volumes and amounts for the World Agency<br />

which is in charge of providing special assistance<br />

for our major multinational clients.<br />

The upswing in the economy resulted in a<br />

clear reduction in gross expenditures for the<br />

business year by 67.6 per cent to EUR 166.6<br />

(prev. year: 514.3) million. Expenditure for<br />

major claims (more than EUR 1.0 million)<br />

also fell dramatically in the business year,<br />

that is by 92.2 per cent to EUR 11.7 (prev.<br />

year: 150.5) million. In addition, the number<br />

of claims and the expenditure for individual<br />

claims also went down considerably. As a<br />

result, the gross claims ratio of this business<br />

year dropped to 34.4 (prev. year: 115.3) per<br />

cent. The gross run-off result increased by<br />

100.8 per cent to EUR 150.4 (prev. year: 74.9)<br />

million.<br />

decline in gross recourse costs for previous<br />

years. The gross claims ratio for this business<br />

year improved slightly to 91.7 (prev.<br />

year: 92.7) per cent thanks to the decrease in<br />

claims payments for this business year.<br />

The gross operating expenses for the insurance<br />

business fell by 15.6 per cent to EUR 0.8<br />

(prev. year: 0.9) million in this business year.<br />

The number of dismissals was notably<br />

higher than in the previous year because of<br />

the restructuring programme implemented<br />

in this business year.


Bonds & guarantees<br />

The bonds & guarantees business profited<br />

from the economic recovery, which began in<br />

<strong>2010</strong>, increasingly in the second half of the<br />

year. Especially because export-driven<br />

industries received more and more orders, a<br />

notably higher number of bonds & guar -<br />

antees was called.<br />

With a firm risk and underwriting policy,<br />

that remained unchanged, gross premiums<br />

written rose by 8.6 per cent to EUR 97.5 (prev.<br />

year: 89.8) million. The vibrant business in<br />

the segment of smaller and medium-sized<br />

clients had a very positive part in this. Especially<br />

the assistance provided to this group<br />

of enterprises in obtaining foreign business<br />

resulted in an encouraging increase.<br />

Fidelity insurance<br />

While fidelity insurance was not able to<br />

repeat its very good or even excellent results<br />

of the previous years in <strong>2010</strong>, the annual<br />

accounts were, however, still absolutely satisfactory,<br />

making a positive contribution to<br />

the overall result of <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG.<br />

With EUR 81.7 million, the gross premiums<br />

earned remained more or less at the previous<br />

year’s level (EUR 81.9 million). This<br />

development corresponds to the stagnation<br />

that has been felt in the entire German market<br />

in recent years, which still suffers from<br />

enormous and aggressive price competition.<br />

However, the segment successfully defended<br />

its undisputed market leadership.<br />

Because of the higher number of major<br />

claims, particularly at the end of the year,<br />

gross expenditure of this business year for<br />

insurance claims went up by 41.6 per cent,<br />

from EUR 29.4 million to EUR 41.6 million,<br />

but remained, however, below 2008 expend -<br />

Management report<br />

The gross claims ratio of 26.6 per cent for<br />

this business year was determined by company<br />

insolvencies in the first quarter. Fortunately,<br />

the rest of the year was characterised<br />

by periods of few claims, the insolvency of<br />

the German subsidiary of a well-known Austrian<br />

plant manufacturer, however, put the<br />

seal on the previous year.<br />

The total of all bonds & guarantees liabilities<br />

amounts to EUR 10.4 billion. The con -<br />

struction and engineering industries, which<br />

are traditionally very important for the<br />

bonding business, play a very strong part in<br />

this. Since continuing export opportunities<br />

might help further economic recovery,<br />

construction companies, whose focus is<br />

the domestic market, might especially feel<br />

tight public budgets.<br />

iture (EUR 46.1 million). As a result, the<br />

gross claims ratio of this business year was<br />

50.9 per cent (prev. year: 35.8 per cent). The<br />

strengthening of reserves for a major claim<br />

from 2006 resulted in an overall run-off loss<br />

of EUR 13.0 million (prev. year: run-off profit<br />

of EUR 1.4 million).<br />

While all these factors together meant that<br />

it was not possible to match the previous<br />

year's outstanding gross underwriting result<br />

of EUR 33.2 million, at EUR 6.1 million, it<br />

may still be described as satisfactory. In<br />

2011, the segment will launch a completely<br />

revised and updated product on the market<br />

and expects a significant revival and<br />

increasing new business.<br />

17


Management report<br />

Inwards reinsurance business<br />

18<br />

Active reinsurance exclusively underwrites<br />

risks in commercial credit insurance, bonds<br />

& guarantees and fidelity insurance according<br />

to the principles of the direct underwriting<br />

business. Contractual partners of <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG are primar -<br />

ily <strong>Euler</strong> <strong>Hermes</strong> Group companies and<br />

associated companies of Allianz SE, and to a<br />

lesser extent companies outside the Group.<br />

The latter are all members of the Inter -<br />

national Credit Insurance & Surety Association<br />

(ICISA).<br />

The inwards reinsurance business has a<br />

share of 8.6 (prev. year: 9.1) per cent of the<br />

gross premiums written by <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG. The share of international<br />

business has remained unchanged<br />

over the previous year at almost 100 per cent<br />

and originates mainly from Asia and Australia/New<br />

Zealand.<br />

Gross premiums written remained almost<br />

constant at EUR 62.8 (prev. year: 62.5) million<br />

despite the transfer of the Northern and<br />

Eastern European business to another<br />

region of the Group in this business year.<br />

The decline in Europe was levelled out by an<br />

Reinsurance<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG protects<br />

its operating risks by proportional and<br />

non-proportional reinsurance. Commercial<br />

credit insurance uses the internal reinsurance<br />

company of the Group, <strong>Euler</strong> <strong>Hermes</strong><br />

Reinsurance AG in Zurich, which in turn<br />

covers its own business with external re -<br />

insurance companies. They have a high level<br />

of expertise in reinsurance of credit, bonds<br />

& guarantees and fidelity risks, and offer a<br />

high degree of security.<br />

increase in Asia/Oceania and in bonds &<br />

guarantees insurance.<br />

Of the EUR 62.8 (prev. year: 62.5) million of<br />

gross premiums written, commercial credit<br />

insurance amounted to EUR 49.0 (prev. year:<br />

50.6) million, bonds & guarantees to<br />

EUR 12.6 (prev. year: 10.7) million and fidelity<br />

insurance to EUR 1.2 (prev. year: 1.2) million.<br />

The claims ratio of this business year<br />

improved by 43.1 percentage points to 54.4<br />

(prev. year: 97.5) per cent. This improvement<br />

was due to a constant premium, lower gross<br />

expenditures in this business year of<br />

EUR 34.6 (prev. year: 69.1) million and EUR 11.3<br />

million run-off profits (prev. year: EUR 3.7<br />

million). The gross claims ratio of the<br />

inwards reinsurance business varied in the<br />

different insurance segments. In commercial<br />

credit insurance the gross claims ratio<br />

of this business year declined to 49.1 (prev.<br />

year: 111.4) per cent, bonds & guarantees<br />

closed with 77.5 (prev. year: 38.7) per cent as<br />

a late result of the economic crisis, and<br />

fidelity insurance – with a rather low premium<br />

volume – showed 49.6 (prev. year:<br />

154.6) per cent.<br />

The reinsurers get a share of the gross<br />

underwriting profit of EUR 363.3 (prev. year:<br />

–66.1) million, that is EUR –231.3 (prev. year:<br />

59.7) million. This means that the rein surers<br />

benefit from a good 63.6 per cent of the<br />

underwriting profit.<br />

For the bonds & guarantees business and<br />

fidelity insurance, <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

gets direct protection from<br />

the same group of reinsurers.


Net assets position<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG’s net<br />

assets position is dominated by investments<br />

(without deposits on retained business) that<br />

account for 80.5 (prev. year: 80.6) per cent<br />

of the balance sheet total and stood at<br />

EUR 1,136.8 (prev. year: 1,085.5) million at<br />

the end of the year. The fair value of these<br />

investments increased over the previous<br />

year by 6.9 per cent to EUR 1,485.8 (prev.<br />

year: 1,389.7) million. Here, the share of valu -<br />

ation reserves in these investments went up<br />

slightly to 30.7 (prev. year: 28.0) per cent. The<br />

reason for the increase in the fair value was<br />

primarily the increase in the fair value of<br />

shares in affiliated companies and associated<br />

companies, which went up by 8.3 per<br />

cent to EUR 365.0 (prev. year: 337.0) million.<br />

Non-underwriting business<br />

Investments<br />

The primary purpose of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG’s investments is to<br />

cover underwriting risks. Ongoing liquidity<br />

planning, regular premium income and<br />

returns on investments make sure that<br />

<strong>financial</strong> obligations can be met at any time.<br />

Our investment strategy is conservative.<br />

Liquidity is assured at all times by investing<br />

in listed, solvent investment funds and in<br />

high-quality bonds. The duration of the<br />

portfolio is in line with the average term of<br />

the obligations from the insurance business.<br />

In this business year, the carrying value of<br />

the investments (without deposits on<br />

retained business) rose by 4.7 per cent to<br />

EUR 1,136.8 (prev. year: 1,085.5) million.<br />

In this business year the income from<br />

investments increased by 12.2 per cent to<br />

EUR 96.3 (prev. year: 85.8) million. This<br />

increase resulted mainly from higher profits<br />

Management report<br />

The fair value of loans to affiliated com -<br />

panies in this business year amounted to<br />

EUR 51.1 (prev. year: 50.8) million. The fair<br />

value of land and rights similar to land and<br />

other investments (without deposits on<br />

retained business) was EUR 1,069.3 (prev.<br />

year: 1,002.1) million.<br />

The investments compare with underwriting<br />

reserves of EUR 989.1 (prev. year: 939.0)<br />

million. This represents a share in the balance<br />

sheet total of 70.1 (prev. year: 69.7) per<br />

cent. Equity fell by 19.9 per cent to EUR 161.4<br />

(prev. year: 201.4) million due to the profit<br />

distribution undertaken in the previous year<br />

and a lower annual surplus of EUR 61.5<br />

(prev. year: 71.5) million.<br />

due to the disposal of associated and affiliated<br />

companies of 243.9 per cent to EUR 33.7<br />

(prev. year: 9.8) million. This compares with<br />

a 38.0 per cent lower income from associated<br />

companies and affiliated companies,<br />

amount ing to EUR 16.8 (prev. year: 27.1) million.<br />

In this business year, the expenditure for<br />

investments increased by 18.4 per cent to<br />

EUR 17.4 (prev. year: 14.7) million. This<br />

increase primarily resulted from higher<br />

write-downs on investments of EUR 14.8 million.<br />

Of these write-downs EUR 3.2 (prev.<br />

year: 0.6) million were in securities, EUR 9.0<br />

(prev. year: 7.7) million in interests in affiliated<br />

companies, EUR 2.6 (prev. year: 3.4) million<br />

in land and buildings. Moreover, in this<br />

business year there were lower losses from<br />

the disposal of investments, amounting to<br />

EUR 0.2 (prev. year: 0.7) million.<br />

19


Management report<br />

20<br />

The investment result therefore increased by<br />

11.1 per cent to EUR 78.9 (prev. year 71.1)<br />

million. The net return was 7.1 (prev. year:<br />

6.6) per cent. The average yield, computed<br />

Other non-underwriting result<br />

The other non-underwriting result deterior -<br />

ated by 160.6 per cent from EUR –10.5 (prev.<br />

year: 17.4) million.<br />

Other Expenses includes EUR 33.6 million<br />

for restructuring reserves.<br />

Pre-tax result<br />

Taking account of the underwriting result,<br />

the pre-tax result was EUR 65.0 (prev. year:<br />

106.0) million.<br />

Compared to the previous year tax expend -<br />

iture fell by 89.9 per cent to EUR 3.5 (prev.<br />

year 34.5) million and is attributable to the<br />

current result. The change for the business<br />

year was EUR –33.3 million, whereas for the<br />

prior years there was a negative change of<br />

EUR 2.3 million.<br />

Significant events after the balance sheet date<br />

No events of special significance occurred<br />

after the balance sheet date that could lead<br />

Relations to affiliated companies<br />

The Board of Management of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG declared in its<br />

report on relations to affiliated companies<br />

pursuant to Sec. 312 of the German Stock<br />

Corporation Act (AktG) that, as far as it was<br />

aware and based on the circumstances pertaining<br />

at the date of the transaction, the<br />

using the model of the industry association<br />

Gesamtverband der Deutschen Versicherungswirtschaft<br />

e. V., Berlin, was 4.5<br />

(prev. year: 5.7) per cent.<br />

Taxes<br />

to different results being reflected in the<br />

annual <strong>financial</strong> statement.<br />

Company received appropriate consider -<br />

ation for each and every transaction with<br />

affiliated companies and was not disadvantaged<br />

by any measure being taken or<br />

waived.


Risk report<br />

For <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG,<br />

managing risk in general and credit risks in<br />

particular is one of its core competences as<br />

a credit insurer. Its risk management system<br />

consists of several interlinked processes, the<br />

aim of which is to identify potential risks<br />

early on, to assess them using set criteria, to<br />

estimate their quantitative and qualitative<br />

consequences and to initiate appropriate<br />

Risk governance<br />

The Board of Management of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG establishes the<br />

Group’s business policy aims and capital<br />

provision within the scope of a risk strategy<br />

on the basis of considerations of returns and<br />

risk, with the <strong>Euler</strong> <strong>Hermes</strong> Group Risk Policy<br />

prescribing binding minimum requirements.<br />

The <strong>Euler</strong> <strong>Hermes</strong> Risk Committee,<br />

installed at Board of Management level,<br />

monitors capitalisation and risk profile, thus<br />

guaranteeing that these two elements are<br />

aligned in a sensible ratio to each other at<br />

all times.<br />

In the Quarterly Risk Report, the Chief Risk<br />

Officer reports regularly to the board on the<br />

current risk situation of the risks classified<br />

as significant, including both quantifiable<br />

risks – underwriting risks, market risks,<br />

counterparty default risks and operating<br />

risks – and qualitative assessments regarding<br />

other risks, such as reputational risks.<br />

The next section, “Risk classification in<br />

insurance business”, deals with these risks<br />

in more detail. The Chief Risk Officer will<br />

make additional ad hoc reports on major<br />

individual risks if there is any significant<br />

change in the risk position.<br />

Risk control is undertaken by the <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG Corporate<br />

Management and Risk Controlling Department,<br />

reporting to the Chief Risk Officer,<br />

Management report<br />

precautionary and security measures. <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG continued<br />

to develop its risk management systems<br />

during the reporting year, taking account,<br />

too, of what was learned during the period of<br />

the crisis in the <strong>financial</strong> markets in order to<br />

enhance their effectiveness and transparency.<br />

which develops methods and processes<br />

for internal risk analysis, assessment and<br />

control on the basis of existing framework<br />

conditions within the EH Group. One<br />

important tool for evaluating the risk profile<br />

of <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG is<br />

the Allianz Group’s internal risk capital<br />

model, used for quantitative risk assessment.<br />

This tool is described below in more detail<br />

in the section “Internal risk capital”.<br />

The risk control section also carries out<br />

qualitative risk analyses and assessments<br />

using a systematic quarterly assessment<br />

(the Top Risk Assessment). Each business<br />

section requires a different method for managing<br />

risk. Risk officers are appointed for<br />

each risk category to identify and quantify<br />

the risks specific to their particular business<br />

and to draw up appropriate measures to<br />

minimise these risks, thus managing these<br />

risks where they occur.<br />

Flanked by the control mechanisms of the<br />

Comprehensive Control Concept (successor<br />

to the Sarbanes Oxley Act concept) initi -<br />

ated throughout the Allianz Group and the<br />

internal control system at the level of individual<br />

processes, this structure makes it<br />

possible to deal with both local and global<br />

risks in the same way and to reduce the likelihood<br />

of the overall risk growing unnoticed<br />

to an unacceptable level.<br />

21


Management report<br />

22<br />

Independent risk oversight<br />

The principle of independent risk oversight<br />

is firmly established in the Allianz/<strong>Euler</strong><br />

<strong>Hermes</strong> Group. This means that there is a<br />

strict separation between active risk<br />

assumption by line management functions,<br />

on the one hand, and risk monitoring by<br />

independent functions, on the other hand<br />

(independent risk oversight). This control<br />

Internal risk capital<br />

Internal risk capital, i.e. the capital required<br />

for protection against unforeseen <strong>financial</strong><br />

losses, is an important parameter in the EVA<br />

approach applied to all the insurance companies<br />

in the Allianz Group.<br />

The <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

internal risk capital model is based on the<br />

value-at-risk approach. In line with the<br />

value-at-risk approach, this model calculates<br />

the negative equity value growth in the<br />

inventory of assets and liabilities under<br />

unfavourable conditions (for instance market<br />

movements or interest rate changes)<br />

which, with a certain degree of likelihood,<br />

will not be exceeded within a set time frame.<br />

No risk capital is allocated in this connection<br />

to assets and liabilities vis-à-vis affiliated<br />

companies in the Allianz <strong>Euler</strong> <strong>Hermes</strong><br />

Group. Internal risk capital results are<br />

brought together for each category, taking<br />

account of cross-category and/or crossregional<br />

diversification effects. The internal<br />

risk capital required is determined on a<br />

quarterly basis.<br />

includes not only the independent identification,<br />

assessment and reporting of risks,<br />

but also monitoring and measures to limit<br />

risk. Alternative courses of action are also<br />

examined and recommendations are made<br />

to the Risk Committee and the Board of<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG.<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

endeavours to hold sufficient capital for a<br />

confidence level or solvency probability of<br />

99.93 per cent for a period of one year. This<br />

corresponds with an A rating from Standard<br />

& Poor’s.<br />

As at the end of the business year, the risk<br />

capital required in economic terms to be<br />

held by <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-<br />

AG, before allowance for diversification<br />

effects within the <strong>Euler</strong> <strong>Hermes</strong> Group under<br />

the internal risk capital model, decreased by<br />

9.3 per cent to EUR 345.3 (prev. year: 380.5)<br />

million. While the requirement in respect of<br />

market risk and reserve risk continued to<br />

rise, the requirement for capital in respect of<br />

the premium risk fell due to the improved<br />

economic situation. Following allowance for<br />

the first time for tax effects in the amount of<br />

EUR 61.4 million, the capital requirement<br />

reduced to EUR 283.9 million.


Capital management<br />

The <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

internal risk capital model is also becoming<br />

increasingly important with regard to<br />

solvency management and capital allocations.<br />

It is intended to ensure that in the<br />

future, too, the Company will at all times be<br />

able to fulfil its capital requirements, even<br />

after a significantly deleterious event, such<br />

as has been seen with the crisis in the <strong>financial</strong><br />

markets and its anticipated effects on<br />

the economy as a whole.<br />

Moreover, the value-oriented EVA approach,<br />

to which the internal risk capital model is an<br />

important contribution, is used to measure<br />

Risk classification in the insurance business<br />

To manage its overall risk, <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG differentiates risks<br />

into categories so that they can be countered<br />

with tailor-made measures.<br />

Underwriting risks arise from the commitment<br />

to make payments in the future,<br />

the occurrence and scope of which <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG must<br />

calculate in advance.<br />

■ Premium shortfall risks arise from an<br />

unforeseen deviation in the actual volume<br />

of claims from the amount of insurance<br />

premiums determined in advance. <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG manages<br />

these risks by subjecting policies to its<br />

guidelines on calculation before acceptance<br />

and an early review of their risk classification<br />

before renewal. Risk management<br />

is organisationally separate from<br />

sales, deciding on the level of coverage<br />

guaranteed and continuously reviewing<br />

the guaranteed coverage limit. Limits are<br />

assessed on the basis of internal ratings<br />

and are updated immediately as information<br />

concerning individual risks becomes<br />

available. Risks are also limited by collect -<br />

ively balancing out potential counter -<br />

Management report<br />

and steer business activities. The capital of<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG,<br />

determined using the value-oriented<br />

approach and giving a realistic picture of the<br />

risk-bearing capacity of the Company in<br />

terms of economic criteria (net asset value),<br />

was EUR 826.7 million (prev. year: 804.0 million)<br />

as of 31 December <strong>2010</strong>. Allowing for<br />

capital requirements under the internal risk<br />

capital model of EUR 345.3 million (prev.<br />

year: 380.5 million), this represents a capital<br />

adequacy ratio of 239.4 (prev. year: 211.3)<br />

per cent. Allowing for tax effects of EUR 61.4<br />

million, the capital adequacy ratio rises to<br />

EUR 291.1.<br />

party default with a broad spread of<br />

regions, segments and business partners.<br />

Premium shortfall risks are further limited<br />

by reinsurance structures.<br />

■ Reserves must be formed for insurance<br />

claims which have been made but not yet<br />

finally settled. Reserve risk means the risk<br />

that actual payments for losses that have<br />

occurred are not covered by reserves.<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

counters reserve risks by careful formation<br />

of its reserves. It estimates the size<br />

of these reserves using not only its great<br />

experience, but also statistical test<br />

methods. Risk is also reduced by constantly<br />

monitoring the development of these<br />

reserves.<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG also<br />

counters underwriting risks by forming a<br />

claims equalisation reserve to compensate<br />

for fluctuations in the course of claims<br />

settlements over time.<br />

The credit risk describes the potential loss<br />

that can arise from the default of a business<br />

partner. “Default” in this sense means that a<br />

policyholder is unable or unwilling to fulfil<br />

23


Management report<br />

24<br />

its contractual obligations. In its insurance<br />

business, <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

limits its liability by passing<br />

on a portion of the risk that it has assumed<br />

to the international reinsurance market.<br />

This means that the risk of counterparty<br />

default primarily entails the risk of non-payment<br />

of claims by reinsurers. To manage<br />

this reinsurance risk, therefore, comprehensive<br />

rating information is obtained from reputable<br />

rating agencies and reinsurers are<br />

selected according to strict creditworthiness<br />

criteria.<br />

The particular nature of credit insurance<br />

business means that counterparty default<br />

risks from investments (investment risks)<br />

represent an increased cumulative risk. Special<br />

attention is paid to the quality of investments.<br />

Therefore, <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

makes an adequate mix and<br />

spread of investments in securities, to<br />

ensure the greatest possible security and<br />

rate of return, maintaining liquidity at all<br />

times. The creditworthiness of issuers is<br />

kept constantly under review.<br />

Market risks result from fluctuations in the<br />

value of the investment portfolio associated<br />

with changed market prices, due for ex -<br />

ample to movements in share prices, interest<br />

rates and exchange rates. But changes in<br />

market volatility are also relevant risk factors.<br />

To manage market risks, stress tests are<br />

Managing other risks<br />

There are certain risks that cannot be quantified<br />

using our internal risk capital model.<br />

For these risks, <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

follows a systematic approach<br />

involving identification, analysis, evaluation<br />

and monitoring. They are evaluated on the<br />

basis of qualitative criteria or using scenario<br />

analyses. This type of risk includes liquidity<br />

risk and reputational risk, as well as stra -<br />

tegic risk. Liquidity risk is the risk that short-<br />

carried out and the investment portfolio’s<br />

performance is watched regularly to prevent<br />

any negative impact on the capitalisation of<br />

the insurance business of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG.<br />

Finally, operational risks are risks that arise<br />

due to inadequacies or errors in business<br />

processes, projects or control systems, but<br />

can also have a technical basis or be caused<br />

by staff, organisational structures or external<br />

factors. Such risks are minimised using<br />

a number of technical and organisational<br />

measures. The internal control system created<br />

in the course of the successful implementation<br />

of the requirements of the Sarbanes<br />

Oxley Act is also having an effect with<br />

regard to operational risks.<br />

At the same time, access authorisation systems<br />

and monitoring and control processes<br />

are also minimising operational risks. The<br />

“four-eyes principle” is applied to work<br />

processes to ensure an adequate standard<br />

for internal processes. This functions as an<br />

early warning system, regularly monitoring<br />

risks inherent in business processes, not<br />

just year on year but also during the course<br />

of the year, for their probability of occurrence<br />

and their effects. There is also a “Business<br />

Continuity Plan”, an emergency plan<br />

intended to guarantee the continuation of<br />

operations even after large-scale disturb -<br />

ances.<br />

term or future payment obligations cannot<br />

be met. It also includes the risk that, in the<br />

event of a liquidity crisis, refinancing can<br />

only be obtained at higher interest rates or<br />

investments can only be liquidated at a loss.<br />

The liquidity risk is a secondary risk, occurring,<br />

for instance, in conjunction with an<br />

extraordinary claim event. Therefore, re -<br />

insurance helps to limit such a liquidity risk.<br />

Moreover, <strong>Euler</strong> <strong>Hermes</strong> Kreditversiche


ungs-AG’s investments provide an addition -<br />

al safety net against the liquidity risk, since<br />

they can, for the most part, be liquidated at<br />

short notice. In the course of standardised<br />

liquidity planning, payment streams from<br />

investments are aligned with payment<br />

streams resulting from liabilities. <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG is also a<br />

member of the Allianz cash-pooling<br />

arrangement and can call on liquidity<br />

funds if needed.<br />

External risk oversight<br />

Additional risk oversight is provided by the<br />

supervisory authorities and rating agencies.<br />

The supervisory authorities define the min -<br />

imum level of precautions and capital re -<br />

quirements. The solvency requirement set by<br />

the supervisory authorities for <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG per 31 December<br />

<strong>2010</strong> was EUR 58.9 (prev. year: 59.2) million,<br />

which is significantly more than covered by<br />

the equity of EUR 98.9 (prev. year: 99.3) million<br />

shown in the balance sheet.<br />

Rating agencies establish the ratio between<br />

the amount of risk capital a company<br />

requires and the safety precautions it has<br />

in place. The <strong>Euler</strong> <strong>Hermes</strong> Group has once<br />

again been given an “AA” rating by the<br />

internationally recognised rating agencies<br />

Standard & Poor’s and Moody’s, with <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG being rated<br />

“Aa3”.<br />

Outlook<br />

In 2011, detailed preparation for Solvency II<br />

will be the prime concern, and <strong>Euler</strong> <strong>Hermes</strong><br />

Management report<br />

Reputational risk is the risk of a reduction in<br />

business volume as a result of a loss of reputation<br />

of <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-<br />

AG with policyholders, staff, business partners<br />

or the public. The fact that <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG is a reliable<br />

business partner for its policyholders means<br />

that it is also able to counter any reputation -<br />

al risks that may threaten its public image.<br />

The effects of the <strong>financial</strong> crisis have shown<br />

that flexibility in risk management systems<br />

is of crucial importance.<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG took<br />

part in the quantitative impact study<br />

QIS 5 as part of the process for developing<br />

“Solvency II”.<br />

The Internal Audit Department monitors<br />

both the functioning of the internal control<br />

and oversight system and compliance with<br />

organisational safety mechanisms, and tests<br />

the effectiveness of the risk management<br />

system at regular intervals. Additionally, as<br />

part of the audit of the annual <strong>financial</strong><br />

statement, the risk early warning system is<br />

evaluated by the auditor, who reports on it<br />

regularly to the Group Board of Management<br />

and Supervisory Board. The findings from<br />

these audits are taken into account in the<br />

ongoing process of improving our risk<br />

management system.<br />

Kreditversicherungs-AG is part of the Groupwide<br />

<strong>Euler</strong> <strong>Hermes</strong> project involved in this.<br />

25


Management report<br />

26<br />

Staff<br />

As at 31 December <strong>2010</strong>, <strong>Euler</strong> <strong>Hermes</strong> Kredit<br />

versicherungs-AG employed a total of<br />

1,570 staff in Germany, including 33 trainees.<br />

The mean length of service at year-end was<br />

16.0 years, and the mean age of staff was<br />

44.6 years.<br />

Group-wide restructuring measures have<br />

resulted in many staff members taking on<br />

new responsibilities. To meet this challenge,<br />

the Human Resources Department has<br />

devel oped tailor-made training opportunities<br />

to allow the staff members in question to<br />

adjust quickly to the new demands upon<br />

them.<br />

Senior management was primarily con -<br />

cerned with the introduction of new Groupwide<br />

management tools, such as regular<br />

monitoring during the year of agreed targets<br />

and talent management for the Group as a<br />

whole.<br />

Several orientation workshops were offered<br />

for junior managers, to allow participants to<br />

assess their own aptitude for future manage -<br />

ment responsibilities as well as their<br />

chances for successful participation in the<br />

potential assessment scheme.<br />

Risk analysis and customer orientation were<br />

at the forefront of ongoing staff training.<br />

The replacement of two IT systems that<br />

had been in use for many years with new<br />

programs meant a heavy schedule of<br />

training and introduction for the production<br />

departments.<br />

International mobility continued to play an<br />

important role in the <strong>Euler</strong> <strong>Hermes</strong> Group;<br />

on the one hand, the number of projects in<br />

other countries in which staff from German<br />

<strong>Euler</strong> <strong>Hermes</strong> companies were involved<br />

grew steadily, and, on the other hand, Germany<br />

continued to attract staff from <strong>Euler</strong><br />

<strong>Hermes</strong> Group companies throughout the<br />

world.<br />

In <strong>2010</strong>, professional training continued to<br />

take account of the increasing internation -<br />

alisation taking place within the Company,<br />

with trainees from <strong>Euler</strong> <strong>Hermes</strong> Kredit -<br />

versicherungs-AG completing placements<br />

of several weeks’ duration in units abroad<br />

during the reporting period.<br />

Overall, <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-<br />

AG is placed as an attractive employer, even<br />

in economically difficult times.


Forecast and outlook<br />

With industry in Germany and its major<br />

export markets having recovered rapidly following<br />

the end of the <strong>financial</strong> crisis, <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG is looking<br />

forward to continued growth in the sales of<br />

its policyholders, albeit to a slightly lesser<br />

extent than in <strong>2010</strong>. Despite these positive<br />

conditions, a decline in the probability of<br />

insolvency, combined with the return of<br />

competitors to the credit insurance market,<br />

is having the effect of putting pressure on<br />

prices for credit insurance and opening the<br />

possibility of declining growth in new business<br />

and premium changes. In addition,<br />

further internal restructuring within the<br />

Group could result in more loss of sales, e.g.<br />

in indirect business and from the Romanian<br />

branch. As well as direct effects on gross<br />

premiums, net premiums from insurance<br />

business will fall in 2011, as <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG will be reducing its<br />

uninsured percentage in favour of the<br />

Group’s own reinsurance company. This<br />

means that the Company is anticipating a<br />

decline in premiums for 2011, with a mod -<br />

erate rise in subsequent years.<br />

Following the strong rise in gross domestic<br />

product in the past business year both in<br />

Germany and in its major export markets,<br />

the global economy is anticipated to con -<br />

tinue growing over the next few years, albeit<br />

Reinsurance<br />

From 2011, <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

will continue to increase the ratio<br />

of credit insurance business it cedes to re -<br />

insurers, which will in all probability have<br />

the effect of reducing net turnover and the<br />

net result.<br />

Management report<br />

less strongly. <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

has already lent significant support<br />

to this recovery in <strong>2010</strong> by greatly<br />

expanding its underwriting policy. This<br />

increased assumption of insolvency risks<br />

and possible other risk factors could result<br />

in a continual rise in claims expenditures in<br />

the course of 2011. Due to the high alloca -<br />

tions to the claims equalisation reserve to<br />

comply with legal requirements, an increase<br />

in the claims reserves does not, however,<br />

necessarily have to have any effect on the<br />

Company’s result.<br />

In anticipation of internal restructuring<br />

associated with the initiatives for improving<br />

customer orientation and enhancing the<br />

flexibility and productivity of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG, reserves were formed<br />

in the <strong>2010</strong> business year. It is intended that<br />

these reserves should help cover the cost of<br />

the Company’s internal restructuring so that<br />

the gross expenditures for the insur ance<br />

business should fall back slightly over the<br />

next few years, despite inflation-related<br />

cost increases and moderate increases in<br />

turnover.<br />

Reinsurance commission can be anticipated<br />

to remain at the <strong>2010</strong> level, but could<br />

change, however, if the claims ratio rises to<br />

the Company’s detriment.<br />

27


Management report<br />

28<br />

Non-underwriting business<br />

It is anticipated that investment income will<br />

decline in the next few years. On the one<br />

hand, there will be no extraordinary profits<br />

from the sale of subsidiaries, while, on the<br />

other hand, the sale of subsidiaries that took<br />

place in <strong>2010</strong> will mean that dividend<br />

income will fall.<br />

Interest rate changes will not be able to<br />

compensate for the decline in revenue from<br />

dividends and disposals, especially in view<br />

of the fact that interest rate changes may, at<br />

the same time, result in the necessity of<br />

depreciating fixed-interest securities or<br />

investment funds. A conservative investment<br />

strategy will continue to be main -<br />

tained, so that negative actual effects due<br />

to the loss of insured receivables and/or<br />

companies will, not at the same time, result<br />

in further expenditure on the asset side.<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG is<br />

look ing forward to a positive result for the<br />

coming year and for 2012, both from the<br />

insurance business and from its investments.


Export credit guarantee<br />

scheme of the Federal<br />

Republic of Germany<br />

31


Export credit guarantee scheme of the<br />

Federal Republic of Germany<br />

32<br />

Export credit guarantees by the German<br />

Federal Government are fully integrated into<br />

the federal budget and do not enter into the<br />

annual <strong>financial</strong> statement of <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherung. The results are published<br />

in a separate annual report.<br />

Income such as charges, fees and recoveries<br />

is remitted to the federal budget, from which<br />

all payments and expenses such as claims<br />

and administrative costs are paid. The consortium<br />

comprising the mandatories <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG and PricewaterhouseCoopers<br />

Aktiengesellschaft<br />

Wirtschaftsprüfungsgesellschaft receives<br />

remuneration from the Federal Government<br />

for its services.<br />

In <strong>2010</strong>, German federal export guarantees<br />

(<strong>Hermes</strong> Cover), at EUR 605.6 million,<br />

achieved a positive result for the federal<br />

treasury for the twelfth year in a row. With<br />

the accumulated deficit of claims payments<br />

from the federal budget amounting to<br />

EUR 13.5 billion having already been fully<br />

eliminated by 2006, the export credit<br />

guarantee scheme showed a positive overall<br />

balance of EUR 2.1 billion by the end of <strong>2010</strong>.<br />

This result is a clear indication that the<br />

instrument is self-financing.<br />

The year <strong>2010</strong> was a record year for export<br />

credit guarantees. The Federal Government<br />

secured new business totalling EUR 32.5 billion<br />

in <strong>2010</strong>, thus achieving the highest<br />

coverage volume in the more than 60 year<br />

history of <strong>Hermes</strong> Cover. This is 45.1 per cent<br />

above the previous year’s result. Overall,<br />

cover was undertaken for export business to<br />

188 countries. The main concentration was<br />

again in the emerging and developing countries,<br />

with 70.4 per cent of coverage volume<br />

or EUR 22.9 billion. Of this, Asian countries<br />

and European countries, with EUR 9.3 billion<br />

and EUR 6.7 billion, respectively, had the<br />

largest share, followed by American<br />

countries with EUR 5.2 billion and African<br />

countries with EUR 1.7 billion. The country<br />

for which the highest export credit guarantee<br />

was undertaken was Russia, followed by<br />

China, Switzerland, Brazil and Turkey.<br />

Short-term business with a credit period of<br />

up to one year rose by 23.6 per cent, while<br />

medium- and long-term business based on<br />

large transactions increased by 74.4 per<br />

cent. The share of medium- and long-term<br />

business in total new business thus reached<br />

51 per cent. Premium income increased by<br />

54.4 per cent to EUR 776.5 million. Claims<br />

expenditures rose by 38.6 per cent from<br />

EUR 203.6 million to EUR 282.2 million, thus<br />

staying at a moderate level. Claims payments<br />

for losses due to political risks reduced<br />

to EUR 23.8 million from EUR 29.2 million<br />

in the previous year, while losses for<br />

commercial causes rose by 48.1 per cent<br />

from EUR 174.4 million to EUR 258.4 million.<br />

Cover for “marketable risks”, i.e. short-term<br />

export credits with risk periods of up to two<br />

years to EU countries and most of the OECD<br />

countries, is reserved for the private insurance<br />

industry under a 1997 Directive by the<br />

European Commission. As a result of the<br />

<strong>financial</strong> and economic crisis, the EU Commission<br />

has recognised that the level of<br />

private cover offered for short-term business<br />

with those countries is no longer adequate.<br />

Under a decision by the Commission of<br />

5 August 2009, marketable risks could again<br />

be covered by export credit guarantees temporarily<br />

up to the end of <strong>2010</strong>. Since private<br />

credit insurers are now offering practically<br />

the same cover options again as before the<br />

crisis, the Federal Government applied to<br />

the EU Commission for an extension of the<br />

exemption only for Bulgaria, Iceland, Latvia,<br />

Lithuania and Romania. This application<br />

was granted, so that state cover for these<br />

countries will remain in place until the end<br />

of 2011.<br />

The volume of applications declined by 23.3<br />

per cent in <strong>2010</strong>. The number of new applications<br />

for cover of all kinds sank by 8 per


cent in <strong>2010</strong> after more than doubling in the<br />

previous year. This is essentially due to the<br />

decline in demand in the Wholeturnover<br />

Policy (APG) segment since September <strong>2010</strong>.<br />

The annual federal budget law fixes an<br />

authorisation framework that sets the upper<br />

limit for assuming cover (guarantees for<br />

export business and tied <strong>financial</strong> credits to<br />

foreign debtors). Having been raised for<br />

<strong>2010</strong> from EUR 117 billion to EUR 120 billion,<br />

this authorisation framework has been<br />

raised to EUR 135 billion for 2011. This<br />

means that adequate capacity continues to<br />

be available for export credit guarantees.<br />

The measures and adjustments to the <strong>Hermes</strong><br />

apparatus for supporting companies in<br />

view of the difficult macroeconomic conditions<br />

encountered in the <strong>financial</strong> and economic<br />

crisis that were implemented as part<br />

of economic package II have proved their<br />

worth. The Federal Government has therefore<br />

extended the option for reducing the<br />

uninsured percentage for suppliers’ credit<br />

cover, originally due to expire at the end of<br />

<strong>2010</strong>, for three years to the end of 2013. The<br />

possibility of applying for an isolated surety<br />

bond, which previously had a time limit, has<br />

been retained with no time limit. The KfW<br />

refinancing programme for <strong>Hermes</strong>-covered<br />

export credits from other banks is also being<br />

continued in a slightly amended form.<br />

The Federal Government is continuing to<br />

develop the system of coverage and adapt it<br />

to changing framework conditions. The<br />

main foundation of this market-oriented<br />

development process for <strong>Hermes</strong> Cover is an<br />

intensive dialogue with exporters, banks<br />

and trade associations. In June, for example,<br />

some 270 representatives from exporting<br />

industry, banks and associations met in the<br />

Federal Ministry for Economics and Technology<br />

in Berlin for the fourth conference “In<br />

Dialogue With Industry – the Federal Republic<br />

of Germany’s Export Credit and Investment<br />

Guarantee Schemes ”.<br />

Export credit guarantee scheme of the Federal Republic of Germany<br />

Since 1 July <strong>2010</strong>, claims for APG currency<br />

transactions may also be paid in the covered<br />

currency upon application by the policyholder.<br />

This option exists in particular for US<br />

dollars, in which the lion’s share of commercial<br />

transactions are conducted, but in single<br />

cases for other currencies as well.<br />

As of 1 October <strong>2010</strong>, a new premium model<br />

for covering manufacturing risks was introduced,<br />

enabling premiums to be determined<br />

appropriate to the risk on the basis of the<br />

actual manufacturing period.<br />

A fast-track procedure for the assumption of<br />

cover for tied credits (FKD) for small export<br />

business up to a volume of EUR 5 million per<br />

transaction was also developed in the<br />

reporting year. The “FKD express” was<br />

launched on 17 January 2011.<br />

The Federal Government’s export credit<br />

guarantee scheme was voted Best State<br />

Export Credit Guarantee Agency for the sixth<br />

time by the readers of Trade Finance Magazine.<br />

Ten projects secured by <strong>Hermes</strong> Cover<br />

also received the award “Deal of the Year<br />

2009”.<br />

33


<strong>Annual</strong> <strong>financial</strong><br />

<strong>statements</strong> <strong>2010</strong><br />

35


<strong>Annual</strong> <strong>financial</strong> <strong>statements</strong><br />

Balance sheet as at 31 December <strong>2010</strong><br />

36<br />

Assets Notes to the <strong>financial</strong> <strong>statements</strong><br />

31.12.2009<br />

EUR’000<br />

A. Intangible assets 1 2,416,556 558<br />

B. Investments<br />

I. Land, land rights and buildings<br />

including buildings on third-party land 2 25,391,651 27,799<br />

II. Investments in affiliated entities and equity investments 3 166,517,544 170,419<br />

III. Other investments 4 944,851,203 887,259<br />

IV. Deposits on retained business 5 677,716 386<br />

C. Accounts receivable<br />

1,137,438,114 1,085,863<br />

I. Accounts receivable arising out of own underwriting business 6 65,432,421 57,002<br />

of which from affiliated companies: EUR 2,288,052 (prev. year: EUR’000 2,524)<br />

II. Accounts receivable arising out of reinsurance operations 7 60,238,039 79,235<br />

of which from affiliated companies: EUR 27,574,378 (prev. year: EUR’000 48,333)<br />

III. Other receivables 8 74,773,686 57,296<br />

of which from affiliated companies: EUR 37,745,701 (prev. year: EUR’000 45,436)<br />

D. Other assets 9<br />

200,444,146 193,533<br />

I. Office equipment and inventories 3,769,712 4,729<br />

II. Cash at bank and in hand 32,258,559 27,355<br />

III. Other asset items 6,463,906 12,473<br />

E. Prepaid expenses<br />

31.12.<strong>2010</strong><br />

EUR<br />

42,492,177 44,557<br />

I. Accrued interest and rent 17,541,420 17,879<br />

II. Other prepaid expenses 10 11,439,655 4,807<br />

28,981,075 22,686<br />

Total 1,411,772,068 1,347,197


Equity and liabilities Notes to the <strong>financial</strong> <strong>statements</strong><br />

A. Equity<br />

<strong>Annual</strong> <strong>financial</strong> <strong>statements</strong><br />

31.12.<strong>2010</strong><br />

EUR<br />

31.12.2009<br />

EUR’000<br />

I. Subscribed capital 11 54,080,000 54,080<br />

II. Capital reserve 12 40,059,719 40,060<br />

III. Revenue reserves 231,360 231<br />

IV. Retained profit 13 5,508,875 0<br />

V. Net retained profits (prev. year: net income for the <strong>financial</strong> year) 61,480,372 107,013<br />

B. Underwriting provisions<br />

I. Provision for unearned premiums 14<br />

161,360,326 201,384<br />

1. Gross amount 88,170,384 88,559<br />

2. Less: resinsurance share 34,174,559 34,572<br />

II. Provision for outstanding claims 15<br />

53,995,825 53,987<br />

1. Gross amount 501,200,846 706,071<br />

2. Less: resinsurance share 250,514,056 370,690<br />

III. Provision for premium refunds relating or not relating to results<br />

250,686,790 335,381<br />

1. Gross amount 26,734,832 15,493<br />

2. Less: reinsurance share 15,018,016 8,576<br />

11,716,816 6,917<br />

IV. Equalisation reserve and similar reserves 16 669,413,000 534,633<br />

V. Other underwriting provisions<br />

1. Gross amount 9,681,944 20,282<br />

2. Less: reinsurance share 6,369,867 12,148<br />

3,312,077 8,134<br />

989,124,508 939,052<br />

C. Other non-underwriting provisions 17 175,970,909 137,443<br />

D. Other liabilities 18<br />

I. Accounts payable arising out of direct insurances business 17,228,286 20,313<br />

of which to affiliated companies: EUR 103,766 (prev. year: EUR’000 1,368)<br />

II. Accounts payable arising out of reinsurances operations 46,379,603 17,736<br />

of which to affiliated companies: EUR 26,139,691 (prev. year: EUR’000 4,189)<br />

III. Sundry liabilities 19 21,467,438 31,269<br />

taxation: EUR 8,216,082 (prev. year: EUR’000 6,977)<br />

social security: EUR 18,084 (prev. year: EUR’000 18)<br />

of which to affiliated companies: EUR 6,908,410 (prev. year: EUR’000 17,653)<br />

85,075,327 69,318<br />

E. Deferred income 20 240,998 0<br />

Total 1,411,772,068 1,347,197<br />

37


<strong>Annual</strong> <strong>financial</strong> <strong>statements</strong><br />

38<br />

Income statement<br />

for the period 1 January until 31 December <strong>2010</strong> Notes to the <strong>financial</strong> <strong>statements</strong><br />

31.12.<strong>2010</strong><br />

EUR<br />

31.12.2009<br />

EUR’000<br />

I. Underwriting account<br />

1. Earned premiums – net of reinsurance<br />

a) Gross premiums written 729,419,982 688,434<br />

b) Ceded premiums written –417,008,624 –381,054<br />

312,411,358 307,380<br />

c) Change in the gross provision for unearned premiums 388,495 7,320<br />

d) Change in the provision for unearned premiums, reinsurers’ share –397,016 1,370<br />

–8,521 8,690<br />

312,402,837 316,070<br />

2. Other technical income, net of reinsurance 757 1<br />

3. Claims expenses, net of reinsurance<br />

a) Claims paid<br />

aa) Gross amount –311,334,342 –449,150<br />

ab) Reinsurers’ share 153,824,024 235,347<br />

–157,510,318 –213,803<br />

b) Change in the provision for outstanding claims<br />

ba) Gross amount 204,869,791 –83,566<br />

bb)Reinsurers’ share –120,175,518 46,343<br />

84,694,273 –37,223<br />

–72,816,045 –251,026<br />

4. Change in other net underwriting provisions 202,800 285<br />

5. Expenses for premium refunds relating or not relating<br />

to results for own account –25,050,750 –16,051<br />

6. Expenditure for insurance operations for own account –83,340,499 –55,691<br />

7. Subtotal 131,399,100 –6,412<br />

8. Change in equalisation reserve and similar reserves –134,780,000 23,963<br />

9. Underwriting result, net of reinsurance –3,380,900 17,551<br />

II. Non-underwriting account<br />

1. Income from investments 21 96,329,080 85,756<br />

2. Expenditure for investments –17,394,646 –14,699<br />

78,934,434 71,057<br />

3. Other income 22 89,336,327 88,320<br />

4. Other expenses 23 –99,880,209 –70,945<br />

–10,543,882 17,375<br />

5. Result from ordinary activities before tax 65,009,652 105,983<br />

6. Extraordinary income 930,691 0<br />

7. Extraordinary expenses –983,432 0<br />

8. Extraordinary result 24 –52,741 0<br />

9. Taxes on income 25 –1,416,874 –31,900<br />

10. Other taxes –2,059,665 –2,556<br />

–3,476,539 –34,456<br />

11. Net income for the <strong>financial</strong> year 61,480,372 71,527<br />

12. Retained profits 5,508,875 86<br />

13. Appropriations from other revenue reserves 0 35,400<br />

14. Net retained profits 66,989,247 107,013


Notes to the<br />

<strong>financial</strong> <strong>statements</strong><br />

41


Notes to the <strong>financial</strong> <strong>statements</strong><br />

Governing bodies of the Company<br />

42<br />

Members of the Board of Management<br />

Ralf Meurer<br />

Diplom-Betriebswirt<br />

Chairman<br />

Dr Hans Janus<br />

Ass. jur.<br />

Thomas Krings<br />

Betriebswirt (WA)<br />

Juliane Kutter<br />

Ass. jur.<br />

Gert Schloßmacher<br />

Diplom-Betriebswirt<br />

Dr Robert Walter<br />

Diplom-Kaufmann<br />

Members of the Supervisory Board<br />

Shareholders’ representatives<br />

Wilfried Verstraete<br />

Chairman of the Supervisory Board<br />

Chairman of the Board of Management<br />

<strong>Euler</strong> <strong>Hermes</strong> S. A., Paris, France<br />

Dr Karl-Ernst Brauner<br />

Director General External Economic Policy<br />

Federal Ministry of Economics and<br />

Technology, Berlin<br />

Dr Gerd-Uwe Baden<br />

Member of the Board of Management<br />

<strong>Euler</strong> <strong>Hermes</strong> S. A., Paris, France<br />

Peter Mießen<br />

Head of Directorate-General II,<br />

Federal Budget<br />

German Ministry of Finance, Berlin<br />

Peter van Hüllen<br />

Chairman of the Executive Board<br />

Georgsmarienhütte Holding GmbH,<br />

Georgsmarienhütte


Employee representatives of <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG,<br />

Hamburg<br />

Horst Meyer<br />

Deputy Chairman of the Supervisory Board<br />

Klaus Grupe<br />

Chairman of the Works Council<br />

(until 18 February 2011)<br />

Jörg Schröder<br />

(since 18 February 2011)<br />

Thomas Wagner<br />

Chairman of the Central Works Council<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

43


Notes to the <strong>financial</strong> <strong>statements</strong><br />

44<br />

The annual <strong>financial</strong> statement at 31 Dec -<br />

ember <strong>2010</strong> was prepared in compliance<br />

with the provisions of the German Commercial<br />

Code (HGB), the Joint-Stock Companies<br />

Act (AktG), the Law on the Supervision of<br />

Insurance Companies (VAG) and the Regulation<br />

concerning the Accounting of Insurance<br />

Companies (RechVersV), each in the<br />

version as currently in force.<br />

Balance sheet / assets<br />

Development of assets items A, B I to III<br />

in the <strong>2010</strong> business year<br />

A. Intangible assets<br />

B I. Land, land rights and buildings<br />

including buildings on<br />

third-party land<br />

B II. Investments in affiliated companies<br />

and associated companies<br />

1. Investement in affiliated<br />

companies<br />

2. Loans to affiliated<br />

companies<br />

3. Associated companies<br />

4. Subtotal B II<br />

B III. Other investments<br />

1. Shares, investment shares<br />

and other non-fixed interest<br />

securities<br />

2. Bearer bonds and<br />

other fixed-interest securities<br />

3. Other loans<br />

a) Registered debentures<br />

b) Notes receivable and<br />

loans<br />

4. Deposits with banks<br />

5. Subtotal B III<br />

Total<br />

Prioryear<br />

figures<br />

Additions Disposals Writeups<br />

The German Accounting Law Modernization<br />

Act (Bilanzrechtsmoderni sierungsgesetz,<br />

BilMoG) came into force on 29 May 2009.<br />

Its application is binding for business years<br />

beginning after 31 De cem ber 2009. We have<br />

refrained from retrospective application<br />

in 2009. We have waived adjustment of the<br />

previous year’s figures.<br />

Writedowns<br />

Depreci -<br />

ations<br />

Carrying<br />

values for<br />

the report -<br />

ing year<br />

EUR’000 EUR’000 EUR’000 EUR’000 EUR’000 EUR’000 EUR’000<br />

558<br />

27,799<br />

76,234<br />

50,578<br />

43,607<br />

170,419<br />

68,203<br />

392,386<br />

379,500<br />

40,000<br />

7,170<br />

887,259<br />

1,086,035<br />

2,300<br />

194<br />

1,845<br />

0<br />

0<br />

1,845<br />

10,154<br />

110,167<br />

130,000<br />

10,000<br />

77,957<br />

338,278<br />

342,617<br />

0<br />

0<br />

2,244<br />

219<br />

0<br />

2,463<br />

15,528<br />

92,244<br />

115,000<br />

0<br />

51,035<br />

273,807<br />

276,270<br />

–<br />

–<br />

–<br />

–<br />

–<br />

0<br />

– 7,516<br />

–<br />

–<br />

–<br />

–<br />

– 7,516<br />

– 7,516<br />

–<br />

–<br />

5,715<br />

–<br />

–<br />

5,715<br />

1,401<br />

2,270<br />

–<br />

–<br />

133<br />

3,804<br />

9,519<br />

442<br />

2,601<br />

8,998<br />

–<br />

–<br />

8,998<br />

17<br />

3,150<br />

–<br />

–<br />

–<br />

3,167<br />

15,208<br />

2,416<br />

25,392<br />

72,552<br />

50,359<br />

43,607<br />

166,518<br />

56,697<br />

409,429<br />

394,500<br />

50,000<br />

34,225<br />

944,851<br />

1,139,177


Intangible assets<br />

Investments<br />

1<br />

2<br />

3<br />

The intangible assets are stated at acquisition<br />

cost less accumulated amortisation and<br />

write-downs.<br />

Land and buildings<br />

Land, land rights and buildings, including<br />

buildings on third-party land, are shown at<br />

acquisition or construction cost less accumulated<br />

depreciation and write-downs.<br />

Scheduled depreciation is based on the normal<br />

useful life of the assets. Extraordinary<br />

Investments in affiliated companies and associated companies<br />

Shares in affiliated companies and associated<br />

companies are shown at acquisition<br />

cost less any necessary impairment to the<br />

lower of cost or market value.<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

depreciation is undertaken for assets for<br />

which permanent value impairment is<br />

assumed. The carrying amount of land<br />

and buildings used by the Company was<br />

EUR 25,226,000.<br />

Loans to affiliated companies are shown at<br />

face value.<br />

45


Notes to the <strong>financial</strong> <strong>statements</strong><br />

Share ownership list pursuant to Sec. 285 No. 11 HGB per 31. 12. <strong>2010</strong><br />

46<br />

Results in<br />

last business<br />

Share- Exchange Equity year<br />

Company Seat holding Currency rate in thousands in thousands<br />

<strong>Euler</strong> <strong>Hermes</strong> Forderungsmanagement GmbH Hamburg 100.00% EUR 1 13,752.00 –9,980.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Rating GmbH Hamburg 100.00% EUR 1 2,727.00 –776.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Cescob, uverova pojistovna, A. S. Prague 100.00% CZK 25.061 244,094.00 54,430.00<br />

EH Cescob Service s.r.o. Prague 100.00% CZK 25.061 40,680.00 18,870.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Credit Insurance Agency (S) PTE. LTD. Singapore 100.00% SGD 1.7136 2,289.00 1,044.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Credit Services Ltd. (Japan) Tokyo 100.00% JPY 108.65 128,824.00 52,106.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Credit Underwriters Hong Kong Ltd. Hong Kong 100.00% HKD 10.3856 29,416.00 7,197.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Information Consulting (Shanghai) Co., Ltd. Shanghai 100.00% CNY 8.82 11,733.00 2,124.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditförsäkring Norden AB Stockholm 100.00% SEK 8.9655 166,941.00 3,179.00<br />

UAB <strong>Euler</strong> <strong>Hermes</strong> Services Lietuva Vilnius 100.00% LTL 3.4528 6,246.00 2,294.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Services Latvia SIA Riga 100.00% LVL 0.7094 446.00 138.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Services Estonia OÜ Tallinn 100.00% EEK 15.6466 6,794.00 301.00<br />

Chatswood Trading Limited Hong Kong 100.00% HKD 10.3856 1,413.00 –1,749.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Towarzystwo Ubezpieczeń S. A. Warsaw 100.00% PLN 3.975 50,563.00 3,788.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Trade Credit Limited Auckland 100.00% NZD 1.72 433.00 163.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Trade Credit Underwriting Agents Pty Ltd. Sydney 100.00% AUD 1.3136 900.00 451.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Magyar Hitelbiztosító Zrt. Budapest 100.00% HUF 277.95 1,294,248.00 –36,864.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Services India Private Limited Mumbai 99.99% INR 59.758 81,540.00 5,177.00<br />

<strong>Euler</strong> <strong>Hermes</strong> Services AG Zurich 99.50% CHF 1.2504 3,202.00 926.00<br />

OOO <strong>Euler</strong> <strong>Hermes</strong> Credit Management Moscow 99.00% RUB 40.82 330.00 –257.00<br />

Bürgel Wirtschaftsinformationen Verwaltungs-GmbH Hamburg 50.40% EUR 1 148.00 10.00<br />

Bürgel Wirtschaftsinformationen GmbH & Co. KG Hamburg 50.10% EUR 1 23,143.00 6,867,00<br />

Bürgel Beteiligungs GmbH Hamburg 50.10% EUR 1 161.00 104.00<br />

Bürgel Erfurt Beteiligungsgesellschaft mbH Erfurt 50.10% EUR 1 42.00 2.00<br />

Bürgel Erfurt GmbH & Co. KG Erfurt 50.10% EUR 1 324.00 27.00<br />

Bürgel Internationale Inkassogesellschaft mbH Hamburg 50.10% EUR 1 182.00 39.00<br />

Bürgel Wirtschaftsinformationen Vertriebsgesellschaft mbH Hamburg 50.10% EUR 1 2,112.00 276.00<br />

Supercheck GmbH Cologne 50.10% EUR 1 68.00 43.00<br />

OeKB EH Beteiligungs- und Management AG Vienna 49.00% EUR 1 89,467.00 6,097.00<br />

EURO-PRO Gesellschaft für Data Processing mbH Grävenwiesbach 37.68% EUR 1 688.00 649.00<br />

Graydon Holding N.V. Amsterdam 27.50% EUR 1 14,977.00 14,985.00<br />

Note:<br />

*) 0 2009 audited<br />

*) 1 Different business year (01. 04. 2009 – 31. 03. <strong>2010</strong>) audited<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 1<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0<br />

*) 0


4<br />

5<br />

Other investments<br />

Shares, investment shares and other variable<br />

interest securities, as well as bearer<br />

bonds and other fixed-interest securities, are<br />

generally shown at acquisition cost subject<br />

to compliance with the strict lower of cost<br />

or market principle. Registered debentures,<br />

notes receivable and other loans, and<br />

Deposits on retained business<br />

The deposits on retained business are the<br />

usual retentions of foreign insurers. They<br />

are shown at face value.<br />

Fair value disclosures<br />

Land, land rights and buildings, including buildings on third-party land<br />

Investments in affiliated companies and associated companies<br />

1. Investments in affiliated companies<br />

2. Loans to affiliated companies<br />

3. Associated companies<br />

Other Investments<br />

1. Shares, investment shares and other variable interest securities<br />

2. Bearer bonds and other fixed-interest securities<br />

3. Other loans<br />

a) Registered debentures<br />

b) Notes receivable and loans<br />

4. Deposits with banks<br />

The fair value for land, land rights and buildings,<br />

including buildings on third-party<br />

land, and for shares in affiliated companies<br />

and associated companies, is generally<br />

determined according to the capitalised<br />

income value method. The fair value of<br />

undeveloped land is determined according<br />

to the indirect sales comparison approach.<br />

The fair value of shares, investment shares<br />

and other variable interest securities, and<br />

bearer bonds and other fixed-interest<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

deposits with banks, are shown at face value.<br />

Premiums and discounts are shown as prepaid<br />

expenses or deferred income and are<br />

recognised in the income statement over the<br />

terms of the instruments on a straight-line<br />

basis, or in line with outstanding capital<br />

amounts.<br />

<strong>2010</strong><br />

EUR’000<br />

89,851<br />

305,498<br />

51,123<br />

59,992<br />

57,863<br />

421,578<br />

412,816<br />

52,901<br />

34,225<br />

1,485,847<br />

securi ties is the market price or carrying<br />

value and, in the case of investment shares,<br />

the redemption price. The fair values of registered<br />

debentures, notes receivable and<br />

loans to affiliated companies have been calculated<br />

using the net present value method<br />

by means of an interest structure curve at<br />

the balance sheet date. The fair values of<br />

deposits with banks are in line with carrying<br />

values.<br />

47


Notes to the <strong>financial</strong> <strong>statements</strong><br />

Accounts receivable<br />

Other assets<br />

48<br />

6<br />

7<br />

8<br />

9<br />

Accounts receivable arising out of own underwriting<br />

business from<br />

1. Policyholders<br />

2. Intermediaries<br />

Accounts receivable arising out of direct insurance business<br />

Accounts receivable arising out of the direct<br />

insurance business relate mainly to outstanding<br />

premiums and accounts receivable<br />

from premiums not as yet billed in an<br />

amount of EUR 31,011,000. Uncollectable<br />

Accounts receivable arising out of reinsurance business<br />

Accounts receivable arising out of reinsurance<br />

business are stated at face value less<br />

any necessary value adjustments.<br />

Other receivables<br />

The other receivables include receivables<br />

from affiliated companies, tax receivables<br />

and receivables from staff and the Federal<br />

Republic of Germany arising out of the<br />

export credit guarantee scheme. The<br />

receivables from affiliated companies<br />

(EUR 37,746,000) relate mainly to receivables<br />

The office equipment and inventories are<br />

shown at acquisition cost less scheduled<br />

depreciation or amortisation. Low-value<br />

economic goods with an acquisition cost of<br />

up to EUR 410 are written off in full in the<br />

year of purchase. Items that can be used<br />

independently, with an acquisition cost of<br />

<strong>2010</strong><br />

EUR’000<br />

64,613<br />

819<br />

2009<br />

EUR’000<br />

54,157<br />

2,845<br />

accounts receivable are written off in full.<br />

Individual value adjustments have been<br />

made for doubtful claims. General credit<br />

risks were also allowed for by a lump-sum<br />

write-down.<br />

arising out of cash pooling of EUR 21,900,000<br />

and traditional charges for services of<br />

EUR 15,087,000. The tax receivables<br />

(EUR 34,201,000) relate, at EUR 8,162,000,<br />

to the still existing corporation tax credit,<br />

which has been capitalised at net present<br />

value.<br />

more than EUR 150 but less than EUR 1,000,<br />

are aggregated to form a collective item and<br />

depreciated over five years. Other assets are<br />

shown at acquisition cost less any depreci -<br />

ation or amortisation according to the strict<br />

lower of cost or market principle.


Prepaid expenses<br />

10<br />

Prepaid expenses are stated at face value<br />

less necessary value adjustments. The<br />

prepaid expenses include premiums of<br />

Balance sheet / equity and liabilities<br />

Equity<br />

11<br />

12<br />

13<br />

Dividend block<br />

Unrealised profits accrued in the business<br />

year arising out of the fair value evaluation<br />

of the covered funds for the provision of the<br />

Underwriting provisions<br />

14<br />

Subscribed capital<br />

The share capital is unchanged at<br />

EUR 54,080,000. It is divided into 2,080,000<br />

Capital reserve<br />

The capital reserve is unchanged at<br />

EUR 40,060,000.<br />

Provision for unearned premiums<br />

The provision for unearned premiums is<br />

calculated in compliance with the requirements<br />

of commercial law for the application<br />

of approximation methods and in compliance<br />

with the letter sent by the Federal<br />

Ministry of Finance to the finance ministers<br />

of the federal states on 30 April 1974.<br />

In direct insurance business, except the<br />

Carnet A.T.A. business, amounts are determined<br />

on the basis of individual policies<br />

using fractional or flat-rate methods as<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

EUR 11,220,000 arising from registered<br />

debentures.<br />

non-par registered shares. The share capital<br />

is fully paid up.<br />

part-time working for older employees<br />

scheme. After deduction of deferred taxes,<br />

a dividend-blocked sum of EUR 705,000<br />

remained.<br />

relevant. For inwards reinsurance business,<br />

unearned premiums are determined on a<br />

flat-rate basis using information provided<br />

by the ceding undertakings. The reinsurers’<br />

share is offset against the gross premiums.<br />

Gross unearned premiums in the capital<br />

goods credit insurance business (IKV) are<br />

assessed on a case-by-case basis if the<br />

annual premium is greater than EUR 20,000.<br />

A flat-rate procedure is used for lesser<br />

annual premiums.<br />

49


Notes to the <strong>financial</strong> <strong>statements</strong><br />

50<br />

15<br />

16<br />

Gross underwriting provisions<br />

Gross underwriting provisions total<br />

of which:<br />

Gross provisions for outstanding claims<br />

Equalisation reserve and similar reserves<br />

Provision for outstanding claims<br />

The provision in our direct insurance<br />

business is determined as follows: claims<br />

provision for bonds & guarantees, bonds &<br />

guarantees “S”, commercial credit insurance,<br />

export credit insurance, capital goods<br />

credit insurance, commercial credit<br />

insurance “S” and fidelity insurance is<br />

calculated individually for all claims<br />

incurred but not settled by the balance sheet<br />

date. In the case of commercial credit<br />

insurance, export credit insurance,<br />

commercial credit insurance “S” and fidelity<br />

insurance, additional provision is estimated<br />

for losses incurred but not reported.<br />

Claims provision for Carnet A.T.A. business<br />

and consumer credit insurance is calculated<br />

in accordance with the tax audit or recent<br />

tax levies using various flat-rate methods.<br />

The provision is reduced by the expected<br />

amounts to be received as recovered collateral<br />

under recourse agreements; in bonds &<br />

guarantees and bonds & guarantees “S”<br />

insurance, these sums are calculated on an<br />

individual basis, while for consumer credit<br />

insurance, fidelity insurance and Carnet<br />

A.T.A. business, they are deducted on a flatrate<br />

basis.<br />

All lines<br />

of insurance business<br />

<strong>2010</strong><br />

EUR’000<br />

1,295,201<br />

501,201<br />

669,413<br />

2009<br />

EUR’000<br />

1,365,037<br />

706,071<br />

558,596<br />

<strong>2010</strong><br />

EUR’000<br />

1,181,445<br />

435,577<br />

631,896<br />

Total<br />

2009<br />

EUR’000<br />

1,239,536<br />

624,146<br />

516,705<br />

In the case of fidelity claims, the accounts<br />

receivable are calculated on the basis of<br />

expected recoveries using an actuarial<br />

method.<br />

Provision for outstanding claims includes<br />

provision for claims adjustment costs,<br />

which is calculated in accordance with the<br />

applicable regulations.<br />

For inwards reinsurance business, <strong>Euler</strong><br />

<strong>Hermes</strong> Kreditversicherungs-AG makes<br />

provision for claims on the basis of information<br />

provided by the primary insurers or on<br />

the basis of its own conservative estimates.<br />

The proportion attributable to each re -<br />

insurer for our ceded business is calculated<br />

on the basis of the contracts existing with<br />

them.<br />

Run-off profits for own account are up in<br />

relation to the previous year’s positions by<br />

around 23 per cent for all lines of insurance<br />

business, and are mainly derived from<br />

commercial credit insurance and bonds &<br />

guarantees insurance business.<br />

Own underwriting business Inwards<br />

reinsurance<br />

business<br />

Credit and<br />

bonds & guarantees<br />

<strong>2010</strong><br />

EUR’000<br />

1,008,616<br />

357,813<br />

547,990<br />

2009<br />

EUR’000<br />

1,066,067<br />

551,004<br />

433,667<br />

Miscellaneous<br />

<strong>financial</strong> risks<br />

fidelity insurance<br />

<strong>2010</strong><br />

EUR’000<br />

172,829<br />

77,764<br />

83,906<br />

2009<br />

EUR’000<br />

173,469<br />

73,142<br />

83,038<br />

<strong>2010</strong><br />

EUR’000<br />

113,756<br />

65,624<br />

37,517<br />

2009<br />

EUR’000<br />

125,501<br />

81,925<br />

41,891


Other provisions<br />

17 <strong>2010</strong><br />

Other provisions<br />

I. Provision for pensions and similar obligations<br />

II. Provision for tax<br />

III. Other provisions<br />

Provision for pensions and similar obligations<br />

The provision for pensions, shown as net<br />

present value of current pension obligations<br />

and vested pension rights, is formed on the<br />

basis of an actuarial report. The biometric<br />

calculation is based on the guideline “2005<br />

G” tables by Professor Heubeck, adjusted to<br />

the company-specific situation in terms of<br />

mortality, invalidity and fluctuation, and<br />

based on an interest rate of 5.16 per cent p.a.,<br />

a projected pension increase of 1.90 per<br />

cent, and a projected rise in wages and<br />

salaries including an individual career trend<br />

of 3.25 per cent. The expenditure incurred<br />

due to changes arising out of the first-time<br />

Other provisions<br />

Other provisions are stated in the amount of<br />

anticipated claims and include recognisable<br />

risks and uncertain liabilities. The provision<br />

includes the following main items: for<br />

restructuring expenditure of EUR 35,642,000,<br />

for deliveries and services received but not<br />

yet billed of EUR 18,686,000, for liabilities<br />

to the workforce that have not yet been paid<br />

of EUR 6,354,000, for expenditure under<br />

the part-time working for older employees<br />

scheme of EUR 6,043,000, for staff long<br />

service anniversaries of EUR 4,741,000 and<br />

for residual holiday days of EUR 4,236,000.<br />

Provision for staff long-service anniversaries<br />

and for the part-time working for older<br />

EUR’000<br />

69,700<br />

28,418<br />

77,853<br />

175,971<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

2009<br />

EUR’000<br />

73,932<br />

27,407<br />

36,104<br />

137,443<br />

application of the German Accounting Law<br />

Modernization Act (BilMoG) is spread over<br />

up to 15 years. The amount of provision not<br />

stated in accordance with Art. 67 (2) of the<br />

Introductory Law to the German Commercial<br />

Code (EGHGB) is EUR 13,344,000. Part of the<br />

pension commitments is secured under<br />

“contractual trust arrangements”<br />

(Methusalem Trust e.V.). This trust fund<br />

represents covered funds which are shown at<br />

market value. The acquisition cost and the<br />

assumed fair value are both EUR 9,335,000.<br />

The repayment amount is EUR 92,379,000.<br />

employees scheme is essentially determined<br />

along the same lines as the pension commitments<br />

and on the basis of the same<br />

assumptions. The assets reserved as credit<br />

in the Methusalem Trust e.V. for securing the<br />

older employees’ part-time working scheme<br />

are covered funds that are shown at market<br />

value. The acquisition cost is EUR 7,929,000<br />

and the assumed fair value is EUR 8,969,000.<br />

The repayment amount is EUR 14,384,000.<br />

Other provisions are stated if applicable<br />

at the discounted settlement amount.<br />

The valuation of provisions existing as of<br />

31 December 2009, with a residual term<br />

of more than one year, was retained.<br />

51


Notes to the <strong>financial</strong> <strong>statements</strong><br />

Other liabilities<br />

Valuation of liabilities<br />

Deferred income<br />

Conversion of foreign currency<br />

52<br />

18<br />

Sundry liabilities<br />

19<br />

20<br />

Contingencies<br />

Liabilities arising from direct insurance business to<br />

1. Policyholders<br />

2. Intermediaries<br />

Sundry liabilities show predominantly tax<br />

amounts and obligations within the Allianz<br />

SE Group.<br />

Liabilities are stated at their repayment<br />

amount.<br />

Deferred income is stated at face value less<br />

any necessary value adjustments.<br />

Foreign currency amounts are converted<br />

into euros at the exchange rate in force on<br />

the transaction date. Short-term assets and<br />

liabilities denominated in foreign currencies<br />

As in previous years, guarantees have been<br />

undertaken only within the scope of the<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG bonds<br />

& guarantees insurance business as per the<br />

<strong>2010</strong><br />

EUR’000<br />

12,829<br />

4,399<br />

2009<br />

EUR’000<br />

14,416<br />

5,897<br />

on the balance sheet date are converted<br />

into euros at the average spot exchange<br />

transaction rate.<br />

business plan, in the amount of EUR 10.4 billion.<br />

There are no other significant contingencies<br />

beyond those stated in the balance<br />

sheet or explained in the annual report.


Gross premiums written 1<br />

of which<br />

a) Germany<br />

b) Other EU countries<br />

and other EEA member states<br />

c) Other countries<br />

Gross premiums earned<br />

Net premiums earned<br />

Gross expenditure for claims<br />

Gross expenditure for insurance operations<br />

– for acquisition of policies<br />

– for administration of policies<br />

Commissions and profit shares received<br />

from reinsurance business<br />

Expenditure for insurance operations for own account<br />

Reinsurance balance2 Underwriting result for own account<br />

Income statement<br />

2009<br />

EUR’000<br />

<strong>2010</strong><br />

EUR’000<br />

2009<br />

EUR’000<br />

<strong>2010</strong><br />

EUR’000<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

All lines of business Own underwriting business Inwards<br />

reinsurance<br />

business<br />

<strong>2010</strong><br />

EUR’000<br />

729,420<br />

571,155<br />

71,629<br />

86,636<br />

729,808<br />

312,403<br />

–106,465<br />

–94,538<br />

–110,280<br />

–204,818<br />

–121,478<br />

–83,340<br />

–262,279<br />

–3,381<br />

688,434<br />

532,951<br />

64,521<br />

90,962<br />

695,754<br />

316,070<br />

–532,716<br />

–89,266<br />

–104,643<br />

–193,909<br />

–138,218<br />

–55,691<br />

40,224<br />

17,551<br />

666,627<br />

570,716<br />

57,218<br />

38,693<br />

666,097<br />

281,716<br />

–83,075<br />

–94,230<br />

–94,433<br />

–188,663<br />

–<br />

–<br />

–249,453<br />

–9,512<br />

Total<br />

625,933<br />

532,574<br />

49,491<br />

43,868<br />

624,896<br />

277,542<br />

–467,312<br />

–86,849<br />

–90,198<br />

–177,047<br />

–<br />

–<br />

24,085<br />

3,721<br />

Commercial credit,<br />

bonds & guarantees<br />

585,650<br />

498,421<br />

49,914<br />

37,315<br />

584,367<br />

252,769<br />

–28,463<br />

–80,535<br />

–88,752<br />

–169,287<br />

–<br />

–<br />

–255,365<br />

–26,691<br />

2009<br />

EUR’000<br />

542,803<br />

460,158<br />

41,111<br />

41,534<br />

542,906<br />

247,860<br />

–439,315<br />

–73,432<br />

–85,049<br />

–158,481<br />

–<br />

–<br />

38,765<br />

–10,931<br />

Miscellaneous<br />

<strong>financial</strong> risks and<br />

fidelity insurance<br />

<strong>2010</strong><br />

EUR’000<br />

80,977<br />

72,295<br />

7,304<br />

1,378<br />

81,730<br />

28,947<br />

–54,612<br />

–13,695<br />

–5,681<br />

–19,376<br />

–<br />

–<br />

5,912<br />

2009<br />

EUR’000<br />

83,130<br />

72,416<br />

8,380<br />

2,334<br />

81,990<br />

29,682<br />

–27,997<br />

–13,417<br />

–5,149<br />

–18,566<br />

–<br />

–<br />

–14,680<br />

1 Policies capitalised after the reporting periods are shown with a time delay in the relevant period<br />

2 Earned reinsurance premiums less reinsurer’s share of expenditure for claims less reinsurer’s share of expenditure for insurance operations = reinsurance balance<br />

17,179<br />

14,652<br />

<strong>2010</strong><br />

EUR’000<br />

62,793<br />

439<br />

14,411<br />

47,943<br />

63,711<br />

30,687<br />

–23,390<br />

–308<br />

–15,847<br />

–16,155<br />

–<br />

–<br />

–12,826<br />

6,131<br />

53<br />

2009<br />

EUR’000<br />

62,501<br />

377<br />

15,030<br />

47,094<br />

70,858<br />

38,528<br />

–65,404<br />

–2,417<br />

–14,445<br />

–16,862<br />

–<br />

–<br />

16,139<br />

13,830


Notes to the <strong>financial</strong> <strong>statements</strong><br />

Other <strong>financial</strong> liabilities<br />

Other income<br />

54<br />

21 <strong>2010</strong><br />

Income from investments, expenditure for investments<br />

EUR’000<br />

22<br />

1. Income from investments<br />

Other expenditures<br />

23<br />

Liabilities of this type only exist within the<br />

normal scope of business.<br />

a) Income from associated companies<br />

of which relating to affiliated companies:<br />

EUR’000 10,066 (prev. year: EUR’000 17,599)<br />

b) Income from other investments<br />

aa) Income from land, land rights and buildings,<br />

including buildings on third-party land<br />

bb) Income from other investments<br />

of which from affiliated companies:<br />

EUR’000 1,381 (prev. year: EUR’000 1,846)<br />

c) Income from write-ups<br />

d) Gains from the disposal of investments<br />

2. Expenditure for investments<br />

a) Expenditure for asset management,<br />

interest paid and other investment expenditure<br />

b) Write-downs on investments<br />

c) Losses on the disposal of investments<br />

Other income includes EUR 358,000 income<br />

from covered assets for pension liabilities<br />

and EUR 400,000 income from the covered<br />

Other expenditures include EUR 33.6 million<br />

expenditure for provision for restructuring<br />

and EUR 5,523,000 interest allocation for<br />

16,766<br />

6,452<br />

31,276<br />

37,728<br />

8,108<br />

33,727<br />

96,329<br />

–2,418<br />

–14,768<br />

–209<br />

–17,395<br />

78,934<br />

2009<br />

EUR’000<br />

27,119<br />

7,787<br />

32,153<br />

39,940<br />

8,932<br />

9,765<br />

85,756<br />

–2,248<br />

–11,705<br />

–746<br />

–14,699<br />

71,057<br />

assets for liabilities under the part-time<br />

working for older employees scheme.<br />

pension liabilities and EUR 773,000 interest<br />

allocation for liabilities under the part-time<br />

working for older employees scheme.


Extraordinary result<br />

24<br />

Deferred taxes<br />

25<br />

An extraordinary result in the amount of<br />

EUR 53,000 was yielded due to the first application<br />

of the Law for the Modernisation of<br />

the German Accounting Law Modernization<br />

Act (BilMoG). The extraordinary result<br />

is yielded from EUR 983,000 expenditure<br />

In exercise of the option under Sec. 274 (1)<br />

sentence 2 of the German Commercial<br />

Code (HGB), the surplus of tax deferrals on<br />

the asset side over and above the area of<br />

balancing is not stated in the balance sheet.<br />

While asset side differences arise between<br />

the commercial and tax values stated for the<br />

Total remuneration of members of Supervisory Board,<br />

Board of Management and Advisory Board per Sec. 285 HGB<br />

Supervisory Board<br />

Board of Management<br />

Former members of the Board of Management and<br />

surviving dependants<br />

Provision of EUR 9,067,000 in total was made<br />

at 31 December <strong>2010</strong> for pension liabilities<br />

Commissions and other payment to insurance agents,<br />

personnel expenditures<br />

1. Commission of all kinds to insurance agents<br />

within the meaning of Sec. 92 HGB<br />

for own underwriting business<br />

2. Wages and salaries<br />

3. Social security contributions and support payments<br />

4. Pension expenditures<br />

Total expenditures<br />

Personnel expenditures include salaries,<br />

wages and similar payments as well as<br />

social security contributions for employees<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

arising from the revaluation or the pension<br />

provision (1/15 of the conversion effect) and<br />

EUR 930,000 income from the evaluation at<br />

net present value of the covered assets for<br />

the part-time working for older employees<br />

scheme.<br />

claims provision and the pensions provision,<br />

the difference on the liabilities side is<br />

limited to the provision for the part-time<br />

working for older employees scheme which<br />

is backed by securities.<br />

Deferred taxes in Germany are valued at a<br />

tax rate of 32.28 per cent.<br />

<strong>2010</strong><br />

EUR’000<br />

143<br />

2,088<br />

773<br />

2009<br />

EUR’000<br />

151<br />

2,680<br />

880<br />

to former executive board members and<br />

their surviving dependants.<br />

<strong>2010</strong><br />

EUR’000<br />

42,971<br />

111,650<br />

17,024<br />

8,804<br />

180,449<br />

2009<br />

EUR’000<br />

40,520<br />

107,316<br />

16,359<br />

9,189<br />

173,384<br />

working within the scope of the government<br />

export credit guarantee business, which are<br />

reimbursed by the client.<br />

55


Notes to the <strong>financial</strong> <strong>statements</strong><br />

Valuation units<br />

Staff numbers<br />

56<br />

Staff numbers<br />

(average for year)<br />

Full-time<br />

Part-time<br />

Trainees<br />

Total<br />

<strong>2010</strong><br />

male<br />

Number of insurance policies for own account 1<br />

Commercial credit and bonds & guarantees<br />

Fidelity<br />

Group affiliation<br />

The options acquired to secure the sharebased<br />

salary plans, as well as equity swaps,<br />

are combined with the basic transactions<br />

underlying them as the unit of valuation if<br />

there is a direct security link. The base transactions<br />

are shown under other provisions<br />

and the securing transactions as other<br />

assets. A micro-hedge approach is used for<br />

the valuation units thus formed in order<br />

completely to exclude the risks of changes<br />

in market prices. The effectiveness of the<br />

valuation units over the share-based salary<br />

plans, which run out by no later than 2016,<br />

656<br />

124<br />

780<br />

13<br />

793<br />

1 Number of policies in existence for at least one year<br />

The parent company which draws up a<br />

consolidated annual <strong>financial</strong> statement for<br />

the largest number of companies is Allianz<br />

Societas Europaea, Munich. <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG is included in its<br />

consolidated annual <strong>financial</strong> statement as<br />

at 31 December <strong>2010</strong> and is thus exempt<br />

from drawing up a consolidated annual<br />

<strong>financial</strong> statement of its own.<br />

The consolidated annual <strong>financial</strong> statement<br />

and consolidated management report<br />

of Allianz Societas Europaea are published<br />

<strong>2010</strong><br />

female<br />

455<br />

294<br />

749<br />

18<br />

767<br />

is demonstrated prospectively and retrospectively<br />

by the confluence of the conditions,<br />

parameters and risks (= critical term<br />

match method). At the balance sheet date,<br />

the base transactions, comprising payments<br />

assumed to be equalised in the future, comprise<br />

a volume of EUR 1,048,000. With the<br />

valuation units, risks in the form of value<br />

changes are covered in the amount of<br />

EUR 87,000. The valuation units are shown<br />

in the balance sheet according to the freezing<br />

method (Einfrierungsmethode).<br />

<strong>2010</strong><br />

total<br />

1,111<br />

418<br />

1,529<br />

31<br />

1,560<br />

2009<br />

male<br />

663<br />

107<br />

770<br />

12<br />

782<br />

2009<br />

female<br />

447<br />

272<br />

719<br />

20<br />

739<br />

2009<br />

total<br />

1,110<br />

379<br />

1,489<br />

32<br />

1,521<br />

31.12.<strong>2010</strong> 31.12.2009<br />

19,607<br />

7,031<br />

21,801<br />

7,493<br />

in its annual report and deposited with the<br />

Munich Commercial Court after its AGM.<br />

The annual report may be viewed there<br />

or requested from it directly. The parent<br />

company drawing up a consolidated annual<br />

<strong>financial</strong> statement for the smallest number<br />

of companies is <strong>Euler</strong> <strong>Hermes</strong> S.A., Paris.<br />

Pursuant to Sec. 20 (1) of the Joint-Stock<br />

Companies Act (AktG), <strong>Euler</strong> <strong>Hermes</strong> S.A.<br />

has reported the fact that it holds more<br />

than one-quarter of the share capital of<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG.


Membership in other organisations<br />

Results for the year<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs- AG is a<br />

member of the German Insurance Industry<br />

Association, based in Berlin, the Insurance<br />

Companies Employers Association, based<br />

in Berlin, the International Credit Insurance<br />

Hamburg, 23 March 2011<br />

Dr Janus<br />

Meurer<br />

Results for the year<br />

Gross profit from underwriting business<br />

Change in equalisation reserve and similar provisions<br />

Underwriting profit<br />

Profit from general business<br />

including federal export credit guarantee scheme<br />

Profit before tax<br />

Tax on income and earnings<br />

Other taxes<br />

Net income for the <strong>financial</strong> year<br />

Retained profits<br />

Appropriations from other revenue reserves<br />

Net retain profits<br />

Krings<br />

Schloßmacher<br />

Notes to the <strong>financial</strong> <strong>statements</strong><br />

& Surety Association, based in Amsterdam,<br />

and the International Union of Credit and<br />

Investment Insurers (Berner Union), based<br />

in London.<br />

<strong>2010</strong><br />

EUR’000<br />

131,399<br />

–134,780<br />

–3,381<br />

68,338<br />

64,957<br />

–1,417<br />

–2,060<br />

61,480<br />

5,509<br />

0<br />

66,989<br />

Kutter<br />

Dr Walter<br />

2009<br />

EUR’000<br />

–6,412<br />

23,963<br />

17,551<br />

88,432<br />

105,983<br />

–31,900<br />

–2,556<br />

71,527<br />

86<br />

35,400<br />

107,013<br />

57


Auditor’s report<br />

59


Auditor’s report<br />

We have audited the annual <strong>financial</strong> <strong>statements</strong>,<br />

comprising the balance sheet, the<br />

income statement and the notes to the<br />

<strong>financial</strong> <strong>statements</strong>, together with the<br />

bookkeeping system, and the management<br />

report of <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-<br />

AG, Hamburg, for the business year from<br />

1 January to 31 December <strong>2010</strong>. The<br />

maintenance of the books and records and<br />

the preparation of the annual <strong>financial</strong><br />

<strong>statements</strong> and management report in<br />

accordance with German commercial law<br />

are the responsibility of the Company’s<br />

management. Our responsibility is to<br />

express an opinion on the annual <strong>financial</strong><br />

<strong>statements</strong>, together with the bookkeeping<br />

system, and the management report based<br />

on our audit.<br />

We conducted our audit of the annual<br />

<strong>financial</strong> <strong>statements</strong> in accordance with<br />

§ 317 HGB [“Handelsgesetzbuch”: “German<br />

Commercial Code”] and German generally<br />

accepted standards for the audit of <strong>financial</strong><br />

<strong>statements</strong> promulgated by the Institut der<br />

Wirtschaftsprüfer [Institute of Public Audit -<br />

ors in Germany] (IDW). Those standards<br />

require that we plan and perform the audit<br />

such that mis<strong>statements</strong> materially affecting<br />

the presentation of the net assets, <strong>financial</strong><br />

position and results of operations in the<br />

annual <strong>financial</strong> <strong>statements</strong>, in accordance<br />

with principles of proper accounting, and in<br />

the management report, are detected with<br />

reasonable assurance. Knowledge of the<br />

business activities and the economic and<br />

legal environment of the Company and<br />

expectations as to possible mis<strong>statements</strong><br />

are taken into account in the determination<br />

of audit procedures. The effectiveness of the<br />

accounting-related internal control system<br />

and the evidence supporting the disclosures<br />

in the books and records, the annual <strong>financial</strong><br />

<strong>statements</strong> and the management report<br />

are examined primarily on a test basis<br />

within the framework of the audit. The audit<br />

includes assessing the accounting prin -<br />

ciples used and significant estimates made<br />

by management, as well as evaluating the<br />

overall presentation of the annual <strong>financial</strong><br />

<strong>statements</strong> and management report. We<br />

believe that our audit provides a reasonable<br />

basis for our opinion.<br />

Our audit has not led to any reservations.<br />

In our opinion, based on the findings of our<br />

audit, the annual <strong>financial</strong> <strong>statements</strong> comply<br />

with the legal requirements and give a<br />

true and fair view of the net assets, <strong>financial</strong><br />

position and results of operations of<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG in<br />

accordance with principles of proper<br />

accounting. The management report is<br />

consistent with the annual <strong>financial</strong> state -<br />

ments and, as a whole, provides a suitable<br />

view of the Company’s position and suitably<br />

presents the opportunities and risks of<br />

future development.<br />

Hamburg, 24 March 2011<br />

KPMG AG<br />

Wirtschaftsprüfungsgesellschaft<br />

Hildebrand Lilje<br />

Wirtschaftsprüfer Wirtschaftsprüfer<br />

61


Report of the<br />

Supervisory Board<br />

63


Report of the Supervisory Board<br />

64<br />

Ladies and Gentlemen,<br />

The Supervisory Board has undertaken the<br />

duties incumbent upon it by law and under<br />

the Articles of Incorporation during the<br />

entire reporting year, supervising management<br />

of the Company, advising the Board of<br />

Management on managing the Company<br />

and being directly involved in decisions of<br />

fundamental significance.<br />

The scope of our supervisory and advisory<br />

duties included having the Board of Management<br />

report to us regularly, promptly and<br />

comprehensively, both in writing and verbally.<br />

The Board of Management reported to<br />

us on the progress of business as well as the<br />

economic and <strong>financial</strong> development of<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG.<br />

Other main reporting areas were the introduction<br />

of the new, Group-wide, business<br />

model “One <strong>Euler</strong> <strong>Hermes</strong>”, the strategic<br />

plan for 2011–2013, the system change to a<br />

new IT platform (AIX) and the entrepreneurial<br />

measures being undertaken in reaction<br />

to the upswing in the economy.<br />

On the basis of the Board of Management’s<br />

reports, we discussed in our Supervisory<br />

Board meetings the development of business<br />

and decisions and events of importance<br />

for the Company. If required by law or<br />

the Articles of Incorporation, the Supervisory<br />

Board, after thorough consideration, passed<br />

relevant resolutions.<br />

The audit by KPMG AG Wirtschaftsprüfungsgesellschaft,<br />

Hamburg, has shown that the<br />

accounting and the annual <strong>financial</strong> <strong>statements</strong><br />

of <strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-<br />

AG comply with statutory regulations and<br />

that the management report is in accordance<br />

with the annual <strong>financial</strong> <strong>statements</strong>.<br />

The report by the auditor of the annual<br />

<strong>financial</strong> <strong>statements</strong> was discussed in his<br />

presence at the Supervisory Board meeting<br />

of 27 April 2011. The Supervisory Board concurs<br />

with the result of this audit.<br />

We do not have any reservations as a result<br />

of following the final result of our own<br />

review. We endorse the annual <strong>financial</strong><br />

<strong>statements</strong> drawn up by the Board of Management,<br />

which is therefore hereby<br />

approved. We concur with the proposal by<br />

the Board of Management for the appropri -<br />

ation of the balance sheet profit.<br />

The report prepared by the Board of Management<br />

concerning relations with affiliated<br />

companies and the corresponding audit<br />

report by the auditor of the annual <strong>financial</strong><br />

<strong>statements</strong> were submitted to the Supervis -<br />

ory Board and were reviewed. The auditor<br />

issued the following certificate for the Board<br />

of Management’s report on relations with<br />

affiliated companies:<br />

“Based on our audit and assessment in<br />

accordance with professional standards, we<br />

confirm that:<br />

1. the actual disclosures contained in the<br />

report are correct<br />

2. the payments made by the Company in<br />

connection with transactions detailed in<br />

the report were not unreasonably high.”<br />

We concur with this assessment.


In the <strong>2010</strong> fiscal year, the Supervisory Board<br />

met for two regular meetings in April and<br />

November and for an extraordinary meeting<br />

in October, at which the Strategic Plan for<br />

2011-2013 was discussed.<br />

As of 26 April <strong>2010</strong>, Nicolas Hein resigned his<br />

mandate as a member of the Supervisory<br />

Board. He is succeeded by Dr Gerd-Uwe<br />

Baden, member of the Board of Management<br />

of <strong>Euler</strong> <strong>Hermes</strong> S.A., Paris, on the basis of<br />

election by the annual general meeting of<br />

shareholders of 26 April <strong>2010</strong>.<br />

We wish to thank Nicolas Hein for the commitment<br />

with which he performed his<br />

duties.<br />

Thomas Wagner was appointed as a member<br />

of the Supervisory Board by the Hamburg<br />

Local Court with effect from 23 Sep -<br />

tember <strong>2010</strong> and succeeds Christine Herold,<br />

who resigned her office as of 30 June <strong>2010</strong>,<br />

as employees’ representative.<br />

We wish to thank Christine Herold for the<br />

commitment with which she performed her<br />

duties.<br />

Thomas-B. Quaas resigned his mandate<br />

as a member of the Supervisory Board as of<br />

5 October <strong>2010</strong>.<br />

We wish to thank Thomas-B. Quaas for the<br />

commitment with which he performed his<br />

duties.<br />

At the Supervisory Board meeting of 22 No -<br />

vember <strong>2010</strong>, Thomas Krings was appointed<br />

as an ordinary member of the Board of<br />

Management with effect from 1 March 2011.<br />

Thomas Krings succeeds Juliane Kutter,<br />

who will be retiring on age grounds from<br />

the Board of Management on 30 June 2011,<br />

and will be available to the Company in an<br />

advisory capacity until the end of 2011.<br />

The Supervisory Board wishes to thank all<br />

members of staff, employees’ representatives,<br />

Boards of Management of the subsidiaries<br />

and the Board of Management of<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG for<br />

their performance and dedicated commitment.<br />

Hamburg, 27 April 2011<br />

For the Supervisory Board:<br />

Wilfried Verstraete<br />

Chairman<br />

Report of the Supervisory Board<br />

65


Contacts<br />

67


Contacts at <strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG<br />

68<br />

Germany<br />

Head Office<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Friedensallee 254<br />

22763 Hamburg<br />

Postal address<br />

22746 Hamburg<br />

Phone +49 (0) 40/88 34-0<br />

Fax +49 (0) 40/88 34-77 44<br />

info.de@eulerhermes.com<br />

www.eulerhermes.de<br />

Branches and<br />

Regional Offices<br />

Branch Office Central Germany<br />

Grosse Gallusstrasse 1–7<br />

60311 Frankfurt<br />

Phone +49 (0) 69/13 48-0<br />

Fax +49 (0) 69/13 48-170<br />

nl.frankfurt@eulerhermes.com<br />

Hans-Joachim Schieffer<br />

Regional Sales Office Bielefeld<br />

Zimmerstrasse 8<br />

33602 Bielefeld<br />

Phone +49 (0) 5 21/9 64 56-0<br />

Fax +49 (0) 5 21/9 64 56-50<br />

gs.bielefeld@eulerhermes.com<br />

Thomas Büning<br />

Regional Sales Office Hanover<br />

Torhaus Hannover<br />

Aegidientorplatz 2b<br />

30159 Hanover<br />

Phone +49 (0) 5 11/3 64 01-0<br />

Fax +49 (0) 5 11/3 64 01-70<br />

gs.hannover@eulerhermes.com<br />

Holger Schreeck<br />

Branch Office Northern Germany<br />

Strassenbahnring 11<br />

20251 Hamburg<br />

Phone +49 (0) 40/2 36 36-0<br />

Fax +49 (0) 40/2 36 36-164<br />

nl.hamburg@eulerhermes.com<br />

Stefan Schiebeler<br />

Regional Sales Office Berlin<br />

An den Treptowers 1<br />

12435 Berlin<br />

Phone +49 (0) 30/20 28 43-00<br />

Fax +49 (0) 30/20 28 43-01<br />

gs.berlin@eulerhermes.com<br />

Heiko Siewert<br />

Regional Sales Office Bremen<br />

Martinistrasse 34<br />

28195 Bremen<br />

Phone +49 (0) 4 21/1 65 97-0<br />

Fax +49 (0) 4 21/1 65 97-49<br />

gs.bremen@eulerhermes.com<br />

Torsten Woelke<br />

Branch Office Western Germany<br />

Hohenzollernring 31–35<br />

50672 Cologne<br />

Phone +49 (0) 2 21/9 20 60-0<br />

Fax +49 (0) 2 21/9 20 60-159<br />

nl.koeln@eulerhermes.com<br />

Othmar Dingarten<br />

Regional Sales Office Dortmund<br />

Westfalen-Center<br />

Lindemannstrasse 79<br />

44137 Dortmund<br />

Phone +49 (0) 2 31/1 82 99-0<br />

Fax +49 (0) 2 31/1 82 99-99<br />

gs.dortmund@eulerhermes.com<br />

Karsten Bahns


Branch Office Southern Germany<br />

BUSINESS CENTER BAVARIA<br />

Radlkoferstrasse 2<br />

81373 Munich<br />

Phone +49 (0) 89/5 43 09-0<br />

Fax +49 (0) 89/5 43 09-166<br />

nl.muenchen@eulerhermes.com<br />

Volker Schwinge<br />

Regional Sales Office Leipzig<br />

Landsberger Strasse 23<br />

04157 Leipzig<br />

Phone +49 (0) 3 41/9 08 23-0<br />

Fax +49 (0) 3 41/9 08 23-10<br />

gs.leipzig@eulerhermes.com<br />

Dirk in der Beek<br />

Regional Sales Office Nuremberg<br />

Spittlertorgraben 3<br />

90429 Nuremberg<br />

Phone +49 (0) 9 11/2 44 05-0<br />

Fax +49 (0) 9 11/2 44 05-30<br />

gs.nuernberg@eulerhermes.com<br />

Rainer Seuling<br />

Branch Office South-western Germany<br />

Löffelstrasse 44<br />

70597 Stuttgart<br />

Phone +49 (0) 7 11/9 00 49-0<br />

Fax +49 (0) 7 11/9 00 49-70<br />

nl.stuttgart@eulerhermes.com<br />

Klaus Rehder<br />

Regional Sales Office Freiburg<br />

Rehlingstrasse 6e<br />

79100 Freiburg<br />

Phone +49 (0) 7 61/4 00 79-0<br />

Fax +49 (0) 7 61/4 00 79-50<br />

gs.freiburg@eulerhermes.com<br />

Marcus Sarafin<br />

Federal government<br />

export credit guarantees<br />

Branch Berlin<br />

Friedrichstadt-Passagen<br />

Quartier 205<br />

Friedrichstrasse 69<br />

10117 Berlin<br />

Phone +49 (0) 30/20 94-53 10<br />

Fax +49 (0) 30/20 94-53 20<br />

aga.nl.berlin@eulerhermes.com<br />

Edna Schöne-Alaluf<br />

Contacts<br />

69


Contacts<br />

70<br />

Australia<br />

<strong>Euler</strong> <strong>Hermes</strong> Trade Credit<br />

Underwriting Agents Pty Ltd.<br />

Level 9 Forecourt<br />

Allianz Building<br />

2 Market Street<br />

Sydney<br />

NSW 2000<br />

Phone (+61 2) 8258 5108<br />

Fax (+61 2) 8258 5060<br />

Burke Steel<br />

Austria<br />

Prisma Kreditversicherungs-AG<br />

Himmelpfortgasse 29<br />

1010 Vienna<br />

Phone (+43 5) 01 02-0<br />

Fax (+43 5) 01 02-21 99<br />

office@prisma-kredit.com<br />

Bettina Selden<br />

Ludwig Mertes<br />

China<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Hong Kong Branch Office<br />

Suites 403-11, 4/F<br />

Cityplaza 4<br />

12 Taikoo Wan Road<br />

Island East<br />

Hong Kong<br />

Phone (+852) 2867 0061<br />

Fax (+852) 2869 8655<br />

info.hk@eulerhermes.com<br />

Henning Siess<br />

<strong>Euler</strong> <strong>Hermes</strong> Information Consulting<br />

(Shanghai) Co. Ltd.<br />

9/F, Mirae Asset Tower<br />

166 Lujiazui Huan Lu<br />

Pudong New Area<br />

Shanghai, 200120<br />

Phone (+86 21) 5012 2220<br />

Fax (+86 21) 5047 1390<br />

shanghai@eulerhermes.com.cn<br />

Henning Siess<br />

Czech Republic<br />

<strong>Euler</strong> <strong>Hermes</strong> Cescob,<br />

úvěrová pojist’ovna, a.s.<br />

Molákova 576/11<br />

186 00 Prague 8<br />

Phone (+420) 266 109 521<br />

Fax (+420) 266 109 520<br />

info.cz@eulerhermes.com<br />

Julius Kudla<br />

Denmark<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditforsikring Norden AB<br />

Amerika Plads 19<br />

2100 Copenhagen<br />

Phone (+45) 8833 3388<br />

Fax (+45) 8833 3389<br />

info.dk@eulerhermes.com<br />

Peter Hecht-Hansen<br />

Estonia<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Eesti filiaal (in liquidation)<br />

c/o Sorainen Law firm<br />

Jogailos 4<br />

01116 Vilnius<br />

Frank Wille


Finland<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditförsäkring Norden AB<br />

Filial i Finland<br />

Mannerheimintie 105<br />

00280 Helsinki<br />

Phone (+358 10) 850 8500<br />

Fax (+358 10) 850 8511<br />

info.fi@eulerhermes.com<br />

Timo Nisumaa<br />

Hungary<br />

<strong>Euler</strong> <strong>Hermes</strong> Magyar Hitelbiztosító Zrt.<br />

Kiscelli u. 104<br />

1037 Budapest<br />

Phone (+36 1) 453 9000<br />

Fax (+36 1) 453 9009<br />

info.hu@eulerhermes.com<br />

Gábor Varga<br />

India<br />

<strong>Euler</strong> <strong>Hermes</strong> Services India Pvt. Ltd.<br />

4th Floor, Voltas House<br />

23, JN Heredia Marg<br />

Ballard Estate<br />

Mumbai 400 001<br />

Phone (+91 22) 6623 2525<br />

Fax (+91 22) 6623 2555<br />

Hans-Peter.Schoettler@eulerhermes.com<br />

Hans-Peter Schöttler<br />

Japan<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Japan Branch Office<br />

Kyobashi Nisshoku Bldg. 7F<br />

8–7, Kyobashi 1-chome<br />

Chou-ku, Tokyo 104-0031<br />

Phone (+81 3) 3538 5403<br />

Fax (+81 3) 3538 5395<br />

mailbox@eulerhermes.co.jp<br />

Yutaka Tanaka<br />

Latvia<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Latvijas filiale (in liquidation)<br />

c/o Sorainen Law firm<br />

Jogailos 4<br />

01116 Vilnius<br />

Frank Wille<br />

Lithuania<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Lietuvos Filialas (in liquidation)<br />

c/o Sorainen Law firm<br />

Jogailos 4<br />

01116 Vilnius<br />

Frank Wille<br />

New Zealand<br />

<strong>Euler</strong> <strong>Hermes</strong> Trade Credit Ltd.<br />

Level 1<br />

152 Fanshawe Street<br />

Auckland 1010<br />

Phone (+64 9) 354 2995<br />

Fax (+64 9) 354 2991<br />

Burke Steel<br />

Norway<br />

Contacts<br />

<strong>Euler</strong> <strong>Hermes</strong> Kredittforsikring Norden AB<br />

Holbergsgate 21<br />

0166 Oslo<br />

Phone (+47) 2325 6000<br />

Fax (+47) 2325 6010<br />

info.no@eulerhermes.com<br />

John Justad<br />

71


Contacts<br />

72<br />

Poland<br />

<strong>Euler</strong> <strong>Hermes</strong><br />

Towarzystwo Ubezpieczeń S.A.<br />

ul. Domaniewska 50 B<br />

02-672 Warsaw<br />

Phone (+48 22) 385 4655<br />

Fax (+48 22) 385 4662<br />

info@eulerhermes.pl<br />

Krzysztof Chechlacz<br />

Romania<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Sucursala Bucuresti<br />

Str. Petru Maior Nr. 6<br />

Sector 1<br />

011264 Bucharest<br />

Phone (+40 21) 302 0300<br />

Fax (+40 21) 302 0302<br />

info.ro@eulerhermes.com<br />

Christina Rusuleanu<br />

Russia<br />

<strong>Euler</strong> <strong>Hermes</strong> Credit Management OOO<br />

Krymskiy Val 3/2<br />

Office 210<br />

Moscow 119049<br />

Phone (+7 495) 649 8008-1001<br />

Fax (+7 495) 627 7308<br />

info.ru@eulerhermes.com<br />

Dominique Spiranski<br />

Singapore<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Singapore Branch Office<br />

3 Temasek Avenue<br />

# 03-02 Centennial Tower<br />

Singapore 039190<br />

Phone (+65) 6395 8977<br />

Fax (+65) 6297 4529<br />

info@eulerhermes.com<br />

Joachim Olszewski<br />

Sweden<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditförsäkring Norden AB<br />

Klarabergsviadukten 90<br />

11164 Stockholm<br />

Phone (+46 8) 5551 3600<br />

Fax (+46 8) 5551 3601<br />

info.se@eulerhermes.com<br />

Lars Gustafsson<br />

Switzerland<br />

<strong>Euler</strong> <strong>Hermes</strong> Kreditversicherungs-AG<br />

Zweigniederlassung Zürich<br />

Tödistrasse 65<br />

8002 Zurich<br />

Phone (+41 44) 283 6565<br />

Fax (+41 44) 283 6566<br />

info.ch@eulerhermes.com<br />

Jules Kappeler<br />

<strong>Euler</strong> <strong>Hermes</strong> Assurance Crédit<br />

Agence Lausanne<br />

Avenue de Gratta-Paille 2<br />

1018 Lausanne<br />

Phone (+41 21) 643 7420<br />

Fax (+41 21) 643 7210<br />

info.ch@eulerhermes.com<br />

Samuel Engel<br />

<strong>Euler</strong> <strong>Hermes</strong> Assicurazione Crediti<br />

Agenzia Lugano<br />

Via Dufour 4<br />

6900 Lugano<br />

Phone (+41 91) 922 7364<br />

Fax (+41 91) 922 7365<br />

info.ch@eulerhermes.com<br />

Samuel Engel


United Arab Emirates<br />

<strong>Euler</strong> <strong>Hermes</strong> Credit Insurance<br />

c/o Alliance Insurance<br />

Warba Center 4th Floor<br />

Office # 405 & 502<br />

Dubai<br />

Phone (+971 4) 211 6000<br />

Fax (+971 4) 211 6060<br />

anil.berry@eulerhermes.com<br />

Anil Berry<br />

Contacts<br />

73


<strong>Euler</strong> <strong>Hermes</strong><br />

Kreditversicherungs-AG<br />

Friedensallee 254<br />

22763 Hamburg<br />

GERMANY<br />

Phone +49 (0) 40/88 34-0<br />

Fax +49 (0) 40/88 34-77 44<br />

info.de@eulerhermes.com<br />

www.eulerhermes.de 01 7000

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