1、Munich Re Group Annual ReportKey figures(IFRS)1 Including amounts attributable to minority interests and policyholders.2 Before elimination of intra-Group transactions across segments.3 The figure for 2011 is not adjusted for relief of 1.3 percentage points from economic risk transfer to the capital
2、 markets.4 Excluding health insurance conducted like life insurance.5 This includes own shares earmarked for retirement.Munich Re 2011 2010 2009 2008 2007Gross premiums written bn 49.6 45.5 41.4 37.8 37.3Operating result m 1,180 3,978 4,721 3,834 5,573Taxes on income m 552 692 1,264 1,372 801Consoli
3、dated result m 712 2,430 2,564 1,579 3,923Attributable to non-controlling interests m 10 8 43 24 83Investments bn 201.7 193.1 182.2 174.9 176.2Return on equity%3.3 10.4 11.8 7.0 15.3Equity bn 23.3 23.0 22.3 21.1 25.3Valuation reserves not recognised in balance sheet1 bn 5.7 3.6 3.2 2.5 0.8Net techni
4、cal provisions bn 181.2 171.1 163.9 157.1 152.4Staff at 31 December 47,206 46,915 47,249 44,209 38,634Reinsurance2 2011 2010 2009 2008 2007Gross premiums written bn 26.5 23.6 21.8 21.9 21.5Investments bn 88.7 83.7 76.8 78.4 81.9Net technical provisions bn 64.3 56.6 53.4 55.8 55.5Large and very large
5、 losses(net)m 5,126 2,228 1,157 1,507 1,126Natural catastrophe losses m 4,544 1,564 196 832 634Combined ratio property-casualty3%113.6 100.5 95.3 99.4 96.4Munich Health2 2011 2010 2009Gross premiums written bn 6.1 5.1 4.0Investments bn 5.9 4.1 3.1Net technical provisions bn 3.4 3.3 2.9Combined ratio
6、4%99.4 99.7 99.4Primary insurance2 2011 2010 2009 2008 2007Gross premiums written bn 17.6 17.5 16.6 17.0 17.3Investments bn 123.9 121.8 118.4 114.0 109.3Net technical provisions bn 113.5 111.2 107.7 101.4 96.9Combined ratio property-casualty%97.8 96.8 93.2 90.9 93.4Our shares 2011 2010 2009 2008 200
7、7Earnings per share 3.94 13.06 12.95 7.74 17.83Dividend per share 6.25 6.25 5.75 5.50 5.50Amount distributed m 1,110 1,110 1,072 1,073 1,124Share price at 31 December 94.78 113.45 108.67 111.00 132.94Munich Res market capitalisation at 31 December5 bn 17.0 21.4 21.5 22.9 29.0Book value per share 129
8、.86 126.31 114.89 106.42 119.33 Premium Consolidated resultPremium/result development201120102009200820071.5%70.7%5.2%59.8%8.9%62.4%11.5%9.5%0.5%9.9%80%60%40%20%0%20%40%60%80%Munich Re(Group)ReinsuranceMunich HealthPrimary insuranceMedNetERGO AustriaERGO DirektERGO VersicherungERGO Lebensversicherun
9、gERGO TurkeyERGO BelgiumERGO ItaliaalmedaAssistance and Health servicesDeutscher Automobil SchutzDeutsche KrankenversicherungERV DKV SegurosBelgiumDKV BelgiumLuxembourgDKV LuxembourgDKV GlobalityApollo Munich Health InsuranceStorebrandMunich ReWindsor Health GroupNew Reinsurance Company Ltd.The Hart
10、ford Steam Boiler Inspection and Insurance CompanyAmerican Modern Insurance Group,Inc.ERGO HestiaDaman National Health InsuranceAsset management MuniCH ERGO AssetManagementDiversified structure Diversified riskOur operations encompass all aspects of risk assumption in primary insurance and reinsuran
11、ce.We are one of the worlds largest reinsurers,and one of the largest primary insurers in Germany and Europe./Reinsurance:We have been in the business of insuring insurers since 1880./Munich Health:We have a strong footing in the international health market./Primary insurance:Our primary insurers of
12、fer security mainly for private clients and for small and medium-sized businesses./Our subsidiary MEAG manages our assets and offers investment products for private clients and institutional investors.The diagram provides a general overview of our Group and makes no claim to completeness.For further
13、 details,please see the list of shareholdings on page 277 ff.*Munich Res presence Europe-wideMunich Res global presence1 Reinsurance Primary insurance Reinsurance and primary insurance*Singapore1 Including Munich Healths primary insurance and reinsurance activities in the health market as at 31 Dece
14、mber 2011.Munich Res presence WorldwideMunich Re GRoup annual RepoRt 2011To our shareholders 001letter to shareholders 003notable events in 2011 007the Board of Management 008Munich Re shares 010our strategy 015 Corporate governance 019Report of the Supervisory Board 021corporate governance report a
15、nd corporate governance statement 026 Management report 049Munich Re 052Business environment 067Business performance 072Financial position 103other success factors 112Risk report 120prospects 141 Consolidated financial statements 149consolidated balance sheet 154consolidated income statement 156Stat
16、ement of recognised income and expense 157Group statement of changes in equity 158consolidated cash flow statement 160notes to the consolidated financial statements 161 Auditors report 288 Declaration of the Board of Management 289 Munich Re2011contentSMunich Re GRoup annual RepoRt 2011contentSGener
17、al information 291Glossary 292index of key terms 299important addresses 300Service 302locationsMulti-year and quarterly overviewimportant datesMore detailed lists of contents are provided on the pages separating the individual sections.to ouR ShaReholdeRSTo ourshareholders2Munich Re GRoup annual Rep
18、oRt 2011to ouR ShaReholdeRS/contentSletter to shareholders 003notable events in 2011 007the Board of Management 008Munich Re shares 010our strategy 015To ourshareholdersMunich Re GRoup annual RepoRt 2011We look back on a year that placed great demands on us.Our indus-try faced an unprecedented clust
19、er of severe natural catastrophes.On top of this,we had to contend with upheavals in government bond markets and persistently low interest-rate levels due to the continuing financial crisis.Against this backdrop,the expectations we had at the beginning of the year were not fulfilled.It became appare
20、nt after the first quarter of 2011 that the consolidated result of 2.4bn we had originally envisaged could no longer be attained.In this exceptional situation,our integrated business strategy com-bining primary insurance and reinsurance under one roof and our management philosophy once again proved
21、their worth.For we were able to conclude the year with a positive annual result:a notable achievement and impressive testimony to the Groups resilience.With our still robust capitalisation and favourable earnings prospects,we will be able to propose an unchanged dividend of 6.25 a share at the Annua
22、l General Meeting,thus expressing our thanks to you,our shareholders,for your confidence in us.Altogether,we will then have Dr.Nikolaus von Bomhardchairman of Munich Reinsurance companys Board of ManagementMunich Re GRoup annual RepoRt 2011Munich Re GRoup annual RepoRt 2011paid over 5bn in dividends
23、 since the beginning of the crisis,that is in the period from 2007 to 2011.In terms of dividend yield,this puts us at the head of the field among DAX 30 stocks.How did the individual fields of business perform?In primary insurance,ERGOs successful launching of its brand campaign in 2010 was followed
24、 by a setback in 2011.Severe trans-gressions by individual employees and agents came to light in con-nection with a series of disputes with intermediaries who had left HMI,an ERGO structured sales organisation.ERGO clearly acknow-ledged its responsibility,apologised,conducted an extensive inquiry an
25、d took the necessary corrective measures.As a consequence,with effect from 1 January 2012,the compliance function was strength-ened significantly and assigned to a separate organisational unit reporting to the ERGO CEO.Furthermore,shortcomings in process-ing business,which emerged in the course of i
26、nvestigations into various allegations,were immediately and comprehensively addressed.ERGO naturally remains committed to its goal of realising its brand mission“To insure is to understand”and is pursuing it with great resolve.Likewise,ERGO is further advancing the international-isation of its busin
27、ess,expanding its activities in growth markets such as Asia as well as central and eastern Europe.In reinsurance,market development is increasingly heterogeneous.Players who want their business to be successful must therefore maintain close proximity to their clients and the markets in order to iden
28、tify individual market trends early on.We are ideally positioned throughout the world and can steer our business according to the individual state of the market;we refer to this approach as cycle management.Overall,we are currently seeing largely stable price levels,although certain loss-affected se
29、gments and countries are showing significant price increases.It is also our aim to develop steadily profitable growth areas through innovation.A recent example of this strategy is the cover we provide in the field of renewable Munich Re GRoup annual RepoRt 2011Munich Re GRoup annual RepoRt 2011energ
30、ies,in which we see medium-term business potential for premium income in the mid three-digit billion euro range.In addition,we anticipate that demand for reinsurance will continue to rise as a consequence of the financial crisis and the introduction of Solvency II.The solutions we offer our clients
31、in this area are flexible,customised,and provide capital relief.Munich Health has continued its consolidation and achieved a solid result.The build-up of our companies in Saudi Arabia and Qatar provides the basis for further growth in health business in this region.A potential liberalisation of the
32、markets in the wake of the Arab Spring may also make private-sector solutions more accessible to the population and open up further opportunities for us.One thing is certain:the international healthcare market is growing and we are prepared for a rise in demand.How do we see the overall economic sit
33、uation for the current year?Given the ongoing strong influence of political events on the financial markets,we have every reason to believe that market volatility will continue to be significant.In this regard,the resolution of the sover-eign debt crisis in the eurozone remains the stiffest challeng
34、e.Polit-icians undoubtedly have a key role to play here.The right balance must be struck between short-term measures to secure the liquidity of governments and banks and long-term measures to cut public debt as well as reforms to strengthen competitiveness.Clearly,the latter will take time;the prior
35、ity must now be to restore confidence by seriously pursuing these goals.On this basis,greater integration of economic and fiscal policy in the EU can then follow.Munich Re broadly diversifies its investments across different asset classes and regions.With this strategy and our disciplined risk manag
36、ement,we are well equipped to cope with greatly varying capital market scenarios.And we will thus remain a strong and reliable partner for our clients,a safe and profitable investment for our shareholders,and an attractive employer for our staff.Munich Re GRoup annual RepoRt 2011Munich Re GRoup annu
37、al RepoRt 2011On behalf of my colleagues on the Board of Management and all employees in the Group,may I take this opportunity to thank you,our shareholders,for the trust you placed in us in a turbulent year.We will continue to make every effort to fulfil the justified expectations you have of your
38、investment in our shares.Yours sincerely,Nikolaus von BomhardMunich Re GRoup annual RepoRt 2011Munich Re GRoup annual RepoRt 20117to ouR ShaReholdeRS/notaBle eventS in 20112011Q1/20111 January 2011/Munich Re successfully concludes the acquisition of the uS Medicare provider Windsor health Group inc.
39、,thus strengthening Munich healths position in the uS healthcare market.in 2008,Munich Re had acquired Sterling life insurance company.Windsor and Sterling operate under the roof of the Windsor health Group,providing services to more than 200,000 members in the uSa.14 January 2011/eRGo sets up a joi
40、nt venture for life insurance with a local partner in china.in addition,eRGo acquires shares in a vietnamese insurance company and pursues its international growth strategy.11 March 2011/the strongest earthquake ever recorded in Japan triggers a massive tsunami that devastates the northeast coast of
41、 the main island honshu,claiming the lives of some 16,000 people.the tsunami leads to severe damage at several blocks of the Fuku-shima 1 nuclear power plant.according to independent estimates,the economic losses caused by the quake and the tsunami(without considering the consequences of the nuclear
42、 accident)come to uS$210bn.it is the costliest natural catastrophe of all time.the share of insured losses may be as much as uS$40bn.Q2/20115 April 2011/eRGo direkt is the first company in the insurance industry to offer cover for dental prosthetic treatment that is imminent or already ongoing.“Zahn
43、ersatz Sofort”is one of the product initiatives launched by eRGo as part of its new brand mission“to insure is to understand”.20 April 2011/the Munich Re annual General Meeting approves payment of a dividend of 6.25 per share.the overall dividend payout is 1.1bn.as successor to thomas Wellauer,who r
44、esigned from the Supervisory Board on 30 September 2010,annika Falkengren is elected to the Supervisory Board as a representative of the share-holders.Falkengren has been president and ceo of Skandinaviska enskilda Banken aB(publ)since 2005.Q3/201125 August 2011/eRGo appoints Stefanie held as chief
45、compliance officer.Following accusations levelled at agents and individual business units,eRGo strengthens its compliance rules and adopts a code of conduct for independent agents,thus giving top priority to the prevention and avoidance of infringements.8 September 2011/Munich Re and the chinese ins
46、urer ping an enter into a cooperation agreement in the field of renewable energy insurance.10 September 2011/new Munich Re software supports the qualitative and quantitative analysis of complex risk accumulations.the complex accumulation Risk explorer(caRe)combines expert knowledge from many discipl
47、ines.interdependencies between risks are revealed and can be analysed from an underwriting perspective.Q4/201119 October 2011/eRGos customer advisory board meets for the first time to discuss services,processes and products from the clients perspective,and make suggestions for improvement.the 25 mem
48、bers of the new board are elected for a period of two years and comprise clients of all German eRGo companies.the meetings are held twice a year and chaired by the eRGo customer advocate.25 October 2011/as part of Munich Res Rent investment programme,MeaG invests in German power grids and solar plan
49、ts in italy and Spain.By the end of the year,around 500m of the 2.5bn target has thus been invested.31 December 2011/devastating earthquakes and a large number of weather-related catastrophes in 2011 made it the costliest year ever in terms of natural catas trophe losses.Global economic losses total
50、led around uS$380bn,over two-thirds higher than in 2005.insured losses of uS$105bn also exceeded the 2005 record(uS$101bn).8Munich Re GRoup annual RepoRt 2011to ouR ShaReholdeRS/the BoaRd oF ManaGeMentJoachim WenninglifeThomas BlunckSpecial and Financial Risks;Reinsurance investments;central procure
51、mentWolfgang Strassl Board member responsible for personnel and welfare matters,within the meaning of Section 33 of the German Co-Determination Acthealthcare;human Resources Peter RderGlobal clients and north americaNikolaus von Bomhard Chairman of the Board of Management,Chairman of the Group Commi
52、tteeGroup development;Group investments;Group communications;Group auditFrom left to right9Munich Re GRoup annual RepoRt 2011to ouR ShaReholdeRS/the BoaRd oF ManaGeMentJrg SchneiderGroup Reporting;Group controlling;corporate Finance Mergers&acquisitions;integrated Risk Management;Group legal,complia
53、nce;Group taxation;investor and Rating agency RelationsTorsten Jeworrek Chairman of the Reinsurance CommitteeReinsurance development;corporate underwriting;accounting,controlling and central Reserving for Reinsurance;information technology;Global Business architecture;Geo Risks Research/corporate cl
54、imate centre Georg Daschnereurope and latin americaLudger ArnoldussenGermany,asia pacific and africa;ServicesFrom left to right10Munich Re GRoup annual RepoRt 2011to ouR ShaReholdeRS/Munich Re ShaReSWeak markets impact Munich Res share price the sovereign debt crisis had a major impact on the europe
55、an financial sector in 2011,and hence also on the performance of insurers share prices.investors were further unsettled by extremely low interest rates(particularly in Germany and the uSa),which are unfavourable for the insurance industrys earnings position in the long term.over the course of the ye
56、ar,these factors put increasing pressure on share prices,with companies focused on life insurance suffering especially,since their results are more dependent on the performance of the capital markets.Reinsurers and primary insurers with the main emphasis on property-casualty insurance fared better.t
57、hey profit ed from the fact that many investors saw them as comparatively defensive and crisis-resistant investments.Munich Re could only benefit from this development to a certain extent.We succeeded in clearly limiting the financial impact of the upheavals on the capital markets,thanks to the soli
58、d performance of large sections of our core operational busi-ness,our prudent risk management and our investment decisions based strictly on economic criteria.But our earnings position was substantially impaired by the record losses from an exceptional accumulation of severe natural catastrophes.clo
59、sing the year 16.5%down,Munich Re shares were outperformed in the year under review by the daX 30(14.7%)but performed better than the european insurance index dJ euRo StoXX insurance(18.4%).however,taking into consideration the dividend paid for the financial year 2010,Munich Re shares even outperfo
60、rmed the benchmark indices,with a change of 11.8%in the total return.our share price reached its year high of 125.20 on 17 February.the spring uprisings in many arab countries then triggered a trend reversal on the financial markets.Munich Res share price was also depressed by the grave consequences
61、 of the earthquakes in new Zealand and Japan,and a series of tornadoes in the uSa.the second half of the year was dominated by turbulence on the international financial markets.a worsening of the debt crisis in the eurozone and fear of recession in the uSa,with possible global impact,added to capita
62、l market uncertainty.Munich Re shares could not escape this trend,and our share price hit its year low of 79.55 on 12 September.total return outperforms benchmark indicesturbulence on capital markets hits share price in second half-year/Financial stocks hit by the sovereign debt crisis and upheavals
63、 on the financial markets/Munich Res shares were unable to match the performance of the daX 30 but out-performed the european insurance index dJ euRo StoXX insurance/Munich Re underlines dependability and capital strength:Board of Management and Supervisory Board to propose payment of an unchanged d
64、ividend of 6.25 per share at the annual General MeetingMunich Re sharesto ouR ShaReholdeRS/Munich Re ShaReS11Munich Re GRoup annual RepoRt 2011particularly in the last three months of the financial year,developments on the stock markets were greatly influenced by political efforts to find a solution
65、 to the debt crisis in europe.neither a series of financial stabilising measures and political initiatives nor concerted action by the central banks was able to calm the situation on the capital markets for long.Munich Res share price finished the year at 94.78.even allowing for the difficult busi-n
66、ess environment,we are not satisfied with its overall development in 2011.neverthe-less,the medium-and long-term performance of Munich Re shares is still convincing:over the last three-and five-year periods,their price performance has bettered that of the dJ euRo StoXX insurance.despite the substant
67、ial financial burdens of the past year,Munich Re shares continued to be generally rated an attractive investment in 2011,owing to our clear and predictable opportunity and risk profile.More than 40 analysts from banks and brokerage houses regularly evaluate our shares.at the end of december 2011,som
68、e 41%of the analysts gave our shares a positive assessment,49%a neutral one,and 10%a negative rating.long-term share performance still convincing Munich Re shares daX 30 dJ euRo StoXX insuranceSource:datastreamJan.Feb.Mar.apr.MayJun.Jul.aug.Sep.oct.nov.dec.Share price performance 1.1.2011=1001201151
69、10105100959085Weighting of Munich Re shares1%daX 30 2.9dJ euRo StoXX 50 1.1dJ euRo StoXX insurance 11.5MSci euRo 1.0FtSe euRotop 100 0.6dJ Sustainability World 0.31 Status:31 december 2011.to ouR ShaReholdeRS/Munich Re ShaReS12Munich Re GRoup annual RepoRt 2011active capital management remains an in
70、tegral part of Munich Res business policy.We pursue a flexible dividend policy,with the payout essentially based not only on the result for the year but also on our capital requirements.We were one of the few Ger-man listed companies to pay a higher dividend for the financial year 2010,up 8.7%to 6.2
71、5 per share.even though the turmoil on the capital markets and the high losses from natural catas-trophes clearly impacted our result for 2011,the Board of Management and Supervisory Board intend to propose an unchanged dividend of 6.25 for the financial year 2011 at the annual General Meeting on 26
72、 april 2012.altogether,this would mean a total pay-out of 1.1bn the same level as last year.Subject to approval by the annual General Meeting,the dividend will be paid on 27 april 2012.With a stable dividend even in a difficult year,we are once again underlining the stability of our business model a
73、nd the solidity of our capital position.With a dividend yield of approximately 6.6%(in relation to the year-end share price),Munich Re shares remain an attractive equity investment,which is also included in the divdaX,a subindex of deutsche Brse aG featuring the 15 daX companies with the highest div
74、idend yields.as announced,between May 2010 and april 2011 we bought back and retired more than nine million shares with a volume of around 1bn as part of our share buy-back programme.For the period 2005 to 2011,Munich Re thus returned nearly 12bn to its shareholders via share buy-backs and dividends
75、.Munich Re shares are no-par-value registered shares.First admitted for trading on the stock exchange in Munich on 21 March 1888,they are today listed on all the German stock exchanges,with trading nowadays taking place almost exclusively on the Xetra electronic trading platform.the average daily tu
76、rnover of Munich Re shares in Xetra and floor trading on the German stock exchanges was 121.0m in the year under review,putting our shares in 14th place among the daX stocks at year-end 2011.in terms of market capitalisation,we ranked 13th with around 17.0bn.dividend proposal of 6.25 at same level a
77、s last yearSecurities reference numbersReuters MuvGn ISIN de 000 843 002 6Bloomberg Muv2 WKN 843 002to our shareholders/munich re shares13munich re Group annual report 2011at the end of december 2011,a total of 151,000 shareholders were entered in our share register.the vast majority of shares were
78、held by institutional investors such as banks,insurers or investment companies;around 12.6%were in the hands of private investors.at around 72%,the percentage of international investors was at the same level as in the previous year.our largest shareholder at the end of 2011 continued to be Warren e.
79、Buffett who,according to the voting rights notification of october 2010,holds a stake of around 10.2%in munich reinsurance company via several companies in his group,Berkshire hathaway inc.,oBh inc.,national indemnity co.Warren e.Buffett and the aforementioned companies in his group also informed us
80、 in october 2010 that the objective of their investment is to generate trading profits,not to implement strategic objectives.they do not seek to exercise an influence on the composition of munich res management or supervisory boards or to fundamentally change the companys capital structure.secondlar
81、gest shareholder is asset manager Blackrock with around 6.2%,followed by the peoples Bank of china/saFe,china,with around 3%.Key figures for our shares 2011 2010share capital m 587.7 587.7number of shares at 31 december m 179.3 188.5Year high 125.20 123.55date 17.2.2011 15.4.2010Year low 79.55 98.38
82、date 12.9.2011 8.6.2010Yearend closing price 94,78 113.45annual performance(excluding dividend)%16.5 4.4Beta relative to daX(daily,raw)%0.9 0.7market capitalisation at 31 december bn 17.0 21.4market value/equity at 31 december1 0.7 0.9average trading volume 000 1,157 1,069earnings per share 3.94 13.
83、06dividend per share 6.25 6.25dividend yield at 31 december%6.6 5.5dividend payout(status at 28 Feb.2012)bn 1.1 1.11 including minority interests.1 percentage of share capital.status:31 december 2011.source:munich re share registerRegional distribution128%Germany33%north america1%other countries13%u
84、K25%rest of europeto ouR ShaReholdeRS/Munich Re ShaReS14Munich Re GRoup annual RepoRt 2011our corporate strategy geared to a sustained increase in value is accompanied by ongoing and open communication with all capital market participants.the main task of investor and Rating agency Relations at Muni
85、ch Re is to cultivate contact with exist-ing shareholders and attract new ones.We mainly use roadshows and investor con-ferences to initiate and intensify dialogue with institutional investors,our main focus being on financial centres in europe and the uSa.We regularly supplement our invest-or relat
86、ions activities with special events,such as the capital Markets day we held in new York in July 2011 to present our uS non-life business,or an event in december,when we spotlighted the expected implications of Solvency ii for Munich Re and the insurance sector.at the same time,we ensure that due acc
87、ount is taken of our investors opinions and preferences in internal decision-making processes.our investor relations work con-tinues to meet with a positive response.in several cross-sector analyses of the quality of investor dialogue,Munich Re once more achieved leading positions in 2011,with our b
88、usiness partners particularly appreciating the consistency and transparency of our reporting.all the presentations we use in our meetings with analysts and investors and in our conferences and roadshows are published on the internet and are sent to inter ested shareholders on request.Many of these e
89、vents are transmitted live via web-stream i ng.enquiries reaching us via our shareholder hotline or by e-mail are answered promptly by our team.additionally,the service pages of our shareholder portal on the internet provide our registered shareholders with a wide range of information and com-munica
90、tion options.our 124th annual General Meeting was held at the icM international congress center in Munich on 20 april 2011.Some 45.4%of the voting share capital was repre-sented in the votes.With online participation in the annual General Meeting and(elec-tronic)postal voting,Munich Reinsurance comp
91、any again offered its shareholders all the facilities for casting their votes on agenda items.For many years,Munich Re has been awarded consistently excellent ratings by the leading rating agencies.despite the exceptional strains on results in the financial year 2011,the outlook for all Munich Res r
92、atings remained stable at a high level.the confidence in our financial strength is reflected in trading in credit default swaps(cdSs),which are used on the capital market to hedge against the risk of an issuers default the lower the cdS spread,the higher the assessment of the issuers security.By bot
93、h national and international standards,Munich Re continues to be among the companies with a very low spread.open communication with all capital market participantsan overview of ratings from the leading rating agencies can be found on page 103to ouR ShaReholdeRS/ouR StRateGY15Munich Re GRoup annual
94、RepoRt 2011Turning risk into sustainable valueour business as an insurer and reinsurer is the professional handling of risk.We create value by using our extensive risk knowledge and sophisticated underwriting techniques to make risks from many different areas of private and economic life manageable
95、for our clients and for us.We integrate our three pillars of primary insurance,reinsurance and Munich health in one Group.this set-up allows us to cover the insurance industrys entire value chain.it benefits our clients,because we can offer them solutions that draw on our full spec-trum of knowledge
96、.as a Group,we are less dependent on cycles in individual lines of business and regional markets or on developments in the capital markets.the risks that we cover differ greatly in nature.their partial non-correlation in terms of potential loss occurrence enables us to balance the risks over time,ac
97、ross regions and across fields of business a diversification benefit that is key for our success.the size and mix of our risk portfolio mean we can cover comparatively more risks with the risk capital available.our business model is supported by disciplined financial management,based on Group-wide r
98、isk management,an investment policy geared to the structure of our liabilities,and active capital management.our risk management considers much more than just the risks from our insurance business.it includes investments,for example,and models interactions between the different risks.it is firmly em
99、bedded Group-wide and actively practised.our selection of investments takes into account the due dates,the currencies and the inflation inten-sity of our underwriting liabilities,thus reducing reinvestment,currency and inflation risks.With our active capital management,we ensure that Munich Res capi
100、talisation is always appropriate.our economic equity,calculated on a market-consistent basis,covers the capital requirement derived from our internal risk model and takes into account the stipulations of regulators and rating agencies.excess capital is returned to our shareholders in the form of div
101、idends and share buy-backs.three-pillar strategy reducescapital requirementsdisciplined financial management as the foundation/integrated business model covers the whole value chain in the insurance industry/disciplined financial management ensures appropriate capitalisation at all times/new insuran
102、ce solutions secure competitive edge,generate profitable growth and win clients loyaltyour strategyto ouR ShaReholdeRS/ouR StRateGY16Munich Re GRoup annual RepoRt 2011an important success factor is the constant improvement of the value-based methods and processes we use to write,control and manage o
103、ur business.our most important performance indicator in this context is return on risk-adjusted capital(RoRac),which relates the profit earned to the required risk capital,allowing the management of all activities in the Group to be geared to economic value added(see page 61).new,previously unknown
104、risks pose a particular challenge.We have to identify and evaluate these as swiftly as possible,with a view to maintaining our competitive advan-tage.in so doing,we aim to expand the boundaries of insurability,correctly structure the conditions,and calculate technically adequate prices.essential pre
105、requisites for this are our broad risk knowledge,our experience in the markets and intensive dialogue with our clients.With new insurance solutions,we aim to generate profitable growth,clearly set ourselves apart from the competition,and win our clients loyalty.Munich Res primary insurance operation
106、s are concentrated in the eRGo insurance Group.eRGo offers a comprehensive range of insurances,provision products and services,and is one of the leading insurance groups in Germany and europe.it is repre-sented in over 30 countries,focusing mainly on europe and asia.over 40 million clients place the
107、ir trust in the competence,security and assistance it provides in vari-ous fields of business.eRGo gears itself consistently to the needs and wants of its clients and aims to con-stantly improve through close communication with them.the claim“to insure is to understand”is being systematically implem
108、ented in the form of needs-based,customer-centric consultancy,clear and understandable communication,innovative ser vices and swift support when loss or damage occurs.Strong client focus is the yard-stick for action in all eRGos business units and companies,and distinguishes eRGo from its competitor
109、s.in combination with its broad range and financial strength,this makes eRGo and its specialists reliable partners for insurance and provision product needs.Beyond this,we attach great importance to complying with legal and ethical standards in all activities:in 2011,eRGo accordingly adopted a new p
110、ackage of meas-ures to strengthen compliance within the group.eRGo offers the appropriate sales channel for every client.over 20,000 full-time self-employed agents service private clients and firms.these are supplemented by direct sales staff,brokers and strong cooperation partners in Germany and ab
111、road.eRGo also has a range of sales partnerships with banks in Germany,various other european countries and india.Munich Re operates worldwide in virtually all classes of reinsurance.our products range from traditional reinsurance,extensive services and consultancy to complex indi-vidual solutions f
112、or assuming risks and optimising our clients capital.in our business,we pursue an underwriting policy consistently based on risk-commensurate prices,terms and conditions.the transfer of risks to the capital markets is another service we offer to clients.We write our business directly with primary in
113、surers and also via brokers.in addition to traditional reinsurance business,we participate in insurance pools,public-private part-nerships,and business in specialist niche segments.through our operating field Risk Solutions,we offer our clients in industrial and major-project business a wide range o
114、f specialised products,customised insurance solutions and services,which we manage from within our reinsurance organisation.these clients thus have direct access to the expertise and capacity of a leading global risk carrier.tapping earnings potential through innovationsprimary insurance to insure i
115、s to understandReinsurance Knowing risks,taking opportunitiesto ouR ShaReholdeRS/ouR StRateGY17Munich Re GRoup annual RepoRt 2011our extensive knowledge in identifying and assessing risks and in structuring insur-ance solutions enables us to create value in a highly dynamic and global environment an
116、d to stand out from our competitors.thanks to our capital management expertise,we are also a sought-after partner for products geared to the balance-sheet and solv-ency position of our clients.our reputation in the market and our client-focused set-up give us quick and direct access to all clients.t
117、he international healthcare market will continue to grow at an above-average rate.the ageing of whole societies and medical advances are leading to rising healthcare costs,often putting immense pressure on social security systems and increasing the need for private insurance solutions.We tap this pr
118、ofitable growth potential in our business field Munich health,where our specialists for international health business from primary insurance and reinsurance are pooled in a separate organisation.We sup-port our clients with needs-based products and innovative solutions in risk manage-ment.to this en
119、d,we frequently collaborate closely with those in charge of social secur ity systems,together making it possible for high-quality medical care to remain affordable.the common aim of all our activities is to create long-term value for our clients,share-holders and staff.For us,a forward-looking and r
120、esponsible approach is axiomatic.as one of the worlds leading insurance groups,we give our clients the promise that we will always fulfil the obligations we assume under insurance contracts.Munich health pioneer in the healthcare marketResponsibility as an integrated insurance group18Munich Re GRoup
121、 annual RepoRt 2011corporate governanceCorporategovernance20corporate governance/contentsCorporategovernanceReport of the Supervisory Board 021Corporate governance report and corporate governance statement 026corporate governance report 026remuneration report 032corporate governance/report of the su
122、pervisory board21Munich re group annual report 2011Dr.Hans-Jrgen Schinzlerchairman of the supervisory boardLadies and Gentlemen,2011 was an extraordinary year in many respects:Munich re had to absorb the highest losses from natural catastrophes in its history and this at a time when the financial ma
123、rkets found themselves in an extremely difficult situation.in this challenging environment,the supervisory board fulfilled with due care all the tasks and duties incumbent upon it under the law,the articles of association and the rules of procedure.We closely monitored the work of the board of Manag
124、ement,providing regular advice on its running of the company,and subjecting its conduct of the business to critical review and supervision.inspection measures in accordance with section 111 para.2 sentence 1 of the german stock companies act were at no time required.Collaboration between Supervisory
125、 Board and Board of Management the collaboration between the supervisory board and the board of Management was constructive and characterised by a spirit of mutual trust.the board of Management met its reporting obligations towards the supervisory board in full.in total,six ordinary meetings of the
126、supervisory board took place,with the board of Management participating in meetings where the topics discussed did not require its absence.this afforded the supervisory board an intensive exchange with the board of Management and gave us a good insight into the competitive position,strategic conside
127、rations,corporate planning and the groups development.the board of Management kept us constantly informed both orally and in writing about all important business transactions.the supervisory board was directly involved in all decisions of fundamental significance to the company.We reviewed and where
128、 necessary questioned the information supplied by the board of Management.between the meetings,the board of Management reported to us on an adhoc basis concerning important matters in the group for example the effects of the earthquake in Japan on the business,the incidents at ergo/hMi reported in t
129、he press and the necessary corrective measures,and the initial loss estimates for hurricane irene and the floods in thailand.beyond this,as chairman of the supervisory board,i was in regular contact with the chairman of the board of Management,particularly in connection with issues of strategy,corpo
130、rate risk management and current business performance.the chairman of the board of Management informed me promptly of significant events and developments in the group.between the meetings,Jrg schneider,member of the board of Management responsible for group reporting,provided timely updates on key e
131、vents and developments to henning Kagermann,chairman of the audit committee.in addition,the shareholder representatives and employee representatives frequently availed themselves of opportunities prior to the supervisory board meetings to discuss important topics separately with the chairman of the
132、board of Management.Focal points of the meetings of the full Supervisory Boardat five of the six meetings,we obtained detailed reports on Munich res performance.together with the board of Management,we concerned ourselves with the strategic risks and opportunities of the individual fields of busines
133、s and gave detailed consideration to the effects of the exceptional accumulation of very severe natural catastrophes and the continuing global financial crisis on the groups assets and results.in addition to obtaining regular reports on the development of the groups investments,at one of our meeting
134、s we received a presentation by Meags Managing director on how asset management is organised at Munich re,and on Meags tasks and role.the incidents at ergo reported in the press,their investigation and the changes necessary in this context were also a focus of our consultations.furthermore,we engage
135、d in discussions with the board of Management on economic risk capital requirements and riskbearing capacity,on the effects of pending reforms to key parameters such as those deriving corporate governance/report of the supervisory board22Munich re group annual report 2011from the new european superv
136、isory system,solvency ii,and the ifrs accounting revisions,and on the highly specific issue of the systemic relevance of insurers.at our first meeting in 2011,we dealt with the company and group financial statements for the financial year 2010 and prepared the motions for resolution by the 2011 annu
137、al general Meeting.besides taking the decision to extend the appointments of three members of the board of Management,we also reached a resolution on the evaluation of individual objectives for annual performance in 2010.in addition,we established the individual objectives for the board members vari
138、able remuneration components for 2011,and took reports on compliance and antifraud management.finally,we appointed the external auditors for the 2011 financial year.at our meeting in april,we concerned ourselves with matters relating exclusively to the board of Management.We assessed the extent to w
139、hich the board of Management had achieved its financial objectives,and determined the amount of bonus payments for the members of the board of Management based on their annual performance in 2010.as usual,at another meeting immediately prior to the annual general Meeting,the board of Management gave
140、 us an account of business performance thus far in the year under review.at its meeting in July,the supervisory board received reports on topics including the groups prospects in german life primary insurance business.We also discussed the main focuses of human resources work in the group.in the sam
141、e session,the board of Management gave us an account of the structure of the compensation systems in the group,thus fulfilling its annual obligation pursuant to section 3 para.5 of the german regulation on the supervisory law requirements for remuneration schemes in the insurance sector(versvergv).i
142、n october,the agenda included issues of corporate governance,an indepth report on the development and status of ergo international,and discussion of the positioning of Munich re(nonlife reinsurance)in greater china.at its last meeting in december,routinely attended by two representatives of the germ
143、an federal financial supervisory authority(bafin)as guests,the supervisory board dealt with the board of Managements remuneration from 2012 onwards.We decided on the weightings of the individual target categories and measurement bases for annual and multiyear performance for the financial objectives
144、 in connection with the variable remuneration for 2012.the chief risk officer gave his assessment of the risk situation and the groups riskbearing capacity and discussed the groups risk strategy in detail with us.We also concerned ourselves with the group planning for 2012 to 2014 presented by the b
145、oard of Management,in connection with which we also considered deviations in business performance from the planning for the year under review.a presentation on Munich health gave us an impression of the development of this business field,and we looked into the current challenges in health primary in
146、surance in germany.Work of the committeesthe supervisory board has a total of five committees in place that enable us to perform our tasks efficiently and deal with complex issues more intensively in smaller bodies.the committees main tasks include preparing resolutions to be taken by the full super
147、visory board and topics for its agenda.details regarding the responsibilities of the respective committees are available in the corporate governance report on page 26 f.the composition of each committee is shown on page 30 f.at all meetings of the full supervisory board,the committee chairmen submit
148、ted detailed reports on the topics dealt with by the committees and the results of these consultations.corporate governance/report of the supervisory board23Munich re group annual report 2011the personnel committee met six times in 2011.it prepared the proposals to be submitted to the full superviso
149、ry board regarding the individual variable remuneration targets for the members of the board of Management in the year under review.Moreover,it adopted proposals to the supervisory board regarding the extension of three board members contracts,the assessment of the individual and financial objective
150、s of the members of the board of Management,and the bonus payments from the 2010 annual performance.the committee obtained comprehensive reports on the fringe benefits and remuner ation in kind for the board of Management as disclosed in the 2010 annual report,and on the status of succession plannin
151、g for the board of Management.the personnel committee approved the acceptance of several seats on supervisory,advisory and similar boards by members of the board of Management.at the end of the reporting period,the committee very closely considered the proposal submitted to the full supervisory boar
152、d regarding the board of Managements remuneration from 2012 onwards.it also prepared submissions to the full board on the weightings of the individual target categories and measurement bases for the financial objectives in connection with the variable remuneration for 2012.at its four meetings in 20
153、11,the standing committee devoted itself mainly to the preparation of supervisory board meetings and to topics of corporate governance.the report on the share register was another regular item on the agenda.the audit committee held seven meetings in the period under review.at two meetings,it discuss
154、ed in detail the company and group financial statements,the company and group management report,the auditors report and the board of Managements proposal for the appropriation of the net retained profits for the financial year 2010.at one of these two meetings,the external auditor answered questions
155、.in addition,the audit committee considered the 2011 quarterly reports and the 2011 halfyear financial report,which it reviewed in the presence of the auditor.the head of group audit routinely provided information on the result of the 2010 audits and the audit planning for 2011.as usual,the complian
156、ce officer also reported to the committee.in fact,the audit committee dealt regularly with compliance topics,following in particular the events at ergo,their investigation and the measures subsequently resolved;at an extraordinary meeting,the audit committee received an indepth report on these matte
157、rs from the chairman of the board of Management and additionally at another meeting from the pwc representative tasked with performing the external review as well as the chairman of ergos board of Management.in this context,the committee also conferred about the groups compliance system,ultim ately
158、specifying more precisely the tasks and monitoring functions it has to perform in respect of matters involving group subsidiaries,in particular with regard to the delimitation of these tasks from those of the subsidiaries own bodies,especially where ergo is concerned.the development of the embedded
159、values in life reinsurance business and in life and health primary insurance business was a periodic item of discussion.furthermore,the audit committee obtained detailed information from Munich res head of information technology on it security.the audit committee looked into the impact of the financ
160、ial crisis on Munich re again in the financial year ended.asset management was thus a recurring topic of thorough debates at the meetings.the committee regularly monitored the groups risk situation;alongside quarterly written reports,it also received verbal updates from the chief risk officer,with w
161、hom the members of the audit committee gave detailed consideration to developments in risk management and the risk strategy.corporate governance/report of the supervisory board24Munich re group annual report 2011the committee reviewed and monitored the auditors independence.in this context,the audit
162、 committee took delivery of reports from the auditor on its auditing and nonauditrelated services.likewise,the audit committee prepared for the full supervisory board the appointment of the external auditor for the financial year 2011,determined the main points of the audits,and set the auditors fee
163、s.following a resolution by the full supervisory board,the chairman of the audit committee commissioned the audit for the financial year 2011.furthermore,it commissioned the external auditor with a review of the halfyear financial report 2011.the good close cooperation with the external auditor was
164、of notable benefit to the audit committee in its tasks and duties.at the beginning of 2011,the nomination committee concluded the discussions it had begun in the previous year about a successor to thomas Wellauer,who left the supervisory board as at 30 september 2010.the committee agreed to propose
165、annika falkengren,president and ceo of skandinaviska enskilda banken ab(publ),as a candidate to the shareholders.the conference committee as per item 7.5 of the rules of procedure for the supervisory board did not need to be convened in the financial year ended.Corporate governance and declaration o
166、f conformitythe efficiency audit of the supervisory boards work,this time conducted on a non formal basis,concluded that the measures to improve efficiency implemented in the previous year,which had been identified in an extensive study,had proven successful,and that the work of the supervisory boar
167、d is considered to be efficient and appropriate overall.a“first”in 2011 was an internal information event offered by Munich re for all members of the supervisory board.as warranted by concrete circumstances,this was devoted to various aspects of the topic“natural catastrophes”,and was attended by th
168、e majority of the members of the supervisory board,as recommended in item 5.4.1 of the german corporate governance code.in november 2011,the board of Management and supervisory board submitted their compulsory annual declaration of conformity with all the recommendations of the german corporate gove
169、rnance code as per section 161 of the german stock companies act and their intention to continue complying with it in future.further information on corporate governance in general is available in the joint report of the board of Management and supervisory board on page 26 ff.Changes on the Superviso
170、ry Boardon 20 april 2011,the annual general Meeting of shareholders elected annika falkengren,president and ceo of skandinaviska enskilda banken ab(publ),to the supervisory board to succeed thomas Wellauer.annika falkengrens appointment brings another exceptionally qualified and internationally expe
171、rienced figure to the supervisory board.Company and Group financial statementsKpMg bayerische treuhandgesellschaft aktiengesellschaft Wirtschaftsprfungsgesellschaft steuerberatungsgesellschaft duly audited the following documents and gave them an unqualified auditors opinion:the company and group ma
172、nagement reports and financial statements as at 31 december 2011.the respective reports and the board of Managements proposal for appropriation of the net retained profits were subsequently submitted directly to the members of the supervisory board.at its meeting on 1 february 2012,the audit committ
173、ee had already had the opportunity to confer in detail about the preliminary yearend figures as at 31 december 2011.on 11 March 2012,it prepared the supervisory boards resolution on the adoption of the company financial statements and the approval of the group financial statements.to this end,corpor
174、ate governance/report of the supervisory board25Munich re group annual report 2011the audit committee examined the company and group financial statements,the management reports and the board of Managements proposal for appropriation of the net retained profits.it discussed these at length with the a
175、uditor present at the meeting and gave detailed consideration to the auditors reports.the chairman of the audit committee briefed the full supervisory board about the outcome of its consultations at the balance sheet meeting on 12 March 2012.the full supervisory board also checked the company and gr
176、oup financial statements and management reports and the proposal of the board of Management for appropriation of the net retained profits.on the basis of its own examination and having heard the auditors report,the supervisory board had no objections and agreed to the outcome of the external audit.i
177、t approved the company and group financial statements on 12 March 2011.the financial statements were thus adopted.having carefully weighed all the relevant aspects,the supervisory board agreed with the proposal of the board of Management for appropriation of the net retained profits.Words of thanks
178、to the Board of Management and employeesthe supervisory board wishes to thank all the members of the board of Management and staff for their great personal commitment and excellent work in a financial year that was as eventful as it was challenging.Munich,12 March 2012for the supervisory boardDr.Han
179、s-Jrgen Schinzlerchairmancorporate governance/corporate governance report and corporate governance stateMent26Munich re group annual report 2011Corporate governance report the following report by the board of Management and supervisory board of Munich reinsurance company on the groups corporate gove
180、rnance within the meaning of item 3.10 of the german corporate governance code contains the remuneration report in accordance with item 4.2.5 of that code and the corporate governance statement as per section 289a of the german commercial code.how we view corporate governancecorporate governance sta
181、nds for a form of responsible company management and control geared to longterm creation of value.one of our aims in this context is to foster the confidence of investors,clients,employees and the general public.also of great significance for us are efficient practices on the board of Management and
182、 supervisory board,good collaboration between these bodies and with the groups staff,and open and transparent corporate communications.continually improving corporate governance is an important principle underlying our business activities.What rules apply to Munich re?as a result of its internationa
183、l organisation,Munich re has to consider corporate governance rules in different national legal systems.clearly,we observe not only the respective national standards but also internationally recognised best practices.in germany,where Munich reinsurance company has its headquarters,corporate governan
184、ce rules are laid down above all in the german stock companies act and the german corporate governance code.the german insurance control act standardises specific requirements for the business organisation of insurance companies and the“fit and proper”criteria for their board members.it also provide
185、s particular rules for insurance companies remuneration systems.these rules formed the basis for the regulation on remuneration schemes in the insurance sector(versvergv)issued by the german federal finance Ministry.also applicable to Munich reinsurance company is the german act on the codeterminati
186、on of employees in crossborder Mergers(Mgvg)and a codetermination agreement,which is published on our website.corporate governance report and corporate governance statement1 1 copy from the management report of Munich reinsurance company.some of the figures in the remuneration report deviate owing t
187、o the application of international accounting standards.corporate governance/corporate governance report and corporate governance stateMent27Munich re group annual report 2011the german corporate governance code contains the main legal rules to be observed by listed german companies.in addition,it i
188、ncludes recommendations and proposals based on nationally and internationally recognised standards of good and responsible management.every year,Munich reinsurance companys board of Management and supervisory board publish a declaration stating how far the codes recommendations have been and will be
189、 complied with.it is our conviction that good corporate governance creates lasting value.We there fore apply the highest standards to our operations and activities,complying with all the recommendations and proposals of the german corporate governance code.the declaration of conformity is permanentl
190、y accessible on our internet website ().corporate legal structure Munich reinsurance company is a jointstock company(“aktiengesellschaft”)within the meaning of the german stock companies act.it has three governing bodies:the board of Management,the supervisory board and the annual general Meeting.th
191、eir functions and powers derive from the relevant legal provisions,the codetermination agreement and the articles of association,which are published on our website.the principle of parity codetermination on the supervisory board has been maintained in the codetermination agreement,and strengthened b
192、y taking into account staff employed in the rest of europe.board of ManagementDuties and responsibilitiesthe board of Management is responsible for managing the company,setting objectives and determining strategy.in doing so,it is obliged to safeguard company interests and endeavour to achieve a lon
193、gterm increase in the companys value.the board of Management must ensure compliance with statutory requirements and internal company directives,and is responsible for effecting adequate risk management and risk control in the company.Internal regulation and working procedurepursuant to article 16 of
194、 the articles of association,the board of Management must comprise a minimum of two persons;beyond this,the number of members is determined by the supervisory board.Munich reinsurance companys board of Management had nine members in the 2011 financial year.an overview of its composition and distribu
195、tion of responsibilities can be found on page 63.additional information on individual members of the board of Management is available on our website.rules of procedure issued by the supervisory board regulate the work of the board of Management,in particular the allocation of responsibilities betwee
196、n the individual board members,matters reserved for the full board of Management,and the required majority for resolutions.the full board of Management decides on all matters for which the law,the articles of association or the rules of procedure prescribe a decision by the board of Management.in pa
197、rticular,it is responsible for matters requiring the approval of the supervisory board,for items which have to be submitted to the annual general Meeting,and for tasks which constitute fundamental management functions or are of exceptionally great importance,including significant personnel issues at
198、 top management level.Meetings of the board of Management take place as required,but at least once a month.the members of the board of Management cooperate closely to the benefit of the company and aim to reach unanimous decisions.the board of Management has two committees one for group matters and
199、one for reinsurance in order to enhance the efficiency of its work.corporate governance/corporate governance report and corporate governance stateMent28Munich re group annual report 2011Group Committee the group committee comprises the chairman of the board of Management and at least one other membe
200、r of the board of Management,i.e.nikolaus von bomhard and Jrg schneider.a further member is Munich reinsurance companys chief risk officer,Joachim oechslin.the chairman of the board of Management is also chairman of the group committee,which decides on all fundamental matters relating to its voting
201、members divisions unless the full board of Management is mandatorily responsible.in addition,it prepares decisions that have to be taken by the full board.Reinsurance Committee the reinsurance committee comprises those members of the board of Management that do not sit on the group committee,i.e.tor
202、sten Jeworrek,ludger arnoldussen,thomas blunck,georg daschner,peter rder,Wolfgang strassl and Joachim Wenning.a further member is the chief financial officer for reinsurance,hermann pohlchristoph.the chairman of the committee is appointed by the supervisory board.this office is held by torsten Jewor
203、rek.the reinsurance committee decides on all fundamental matters relating to the business field of reinsurance except where the full board of Management is mandatorily responsible.the committee meetings are held as needed,and usually take place every two weeks.only the members of the board of Manage
204、ment are entitled to vote.further details are regulated by the rules of procedure adopted by the full board of Management.Subcommittees both the group committee and the reinsurance committee have set up subcommittees,whose members include other senior executives from Munich reinsurance company and t
205、he group.they comprise the group investment committee,the group risk committee,the global underwriting and risk committee,and the strategy committee.only members of the board of Management have voting rights on these committees,each of which apart from the strategy committee has its own written rule
206、s of procedure.the group investment committee deals with all significant issues affecting the investments of the group and of the individual fields of business.both the group risk committee and the global underwriting and risk committee deal with risk management,albeit in different contexts.Collabor
207、ation between Board of Management and Supervisory Boardthe board of Management and supervisory board cooperate closely to the benefit of the company.the board of Management coordinates the companys strategic approach with the supervisory board and discusses the current state of strategy implementati
208、on with it at regular intervals.it reports regularly to the supervisory board about all questions relevant to the company.the supervisory board has defined the board of Managements information and reporting requirements in detail.specific types of transaction such as investments and divestments of s
209、ubstantial size and individual capital measures(e.g.according to article 4 of the articles of association)generally require the supervisory boards consent.beyond this,the board of Management reports to the audit committee on specific topics falling within the latters scope of responsibility.supervis
210、ory board Duties and responsibilities the supervisory board monitors the board of Management and gives counsel where appropriate.certain transactions require its approval,but it is not authorised to take management action in place of the board of Management.the supervisory board also appoints the ex
211、ternal auditor for the company and group financial statements and for the halfyear financial report.in compliance with the articles of association,the supervisory board has 20 members.half are representatives of the shareholders,elected by the annual general Meeting,and half are elected representati
212、ves of the employees.under the codetermination corporate governance/corporate governance report and corporate governance stateMent29Munich re group annual report 2011agreement,employees of group companies in the european union(eu)and european economic area(eea)may also participate in the election of
213、 employee representatives.an overview of the members of the supervisory board can be found on page 63 f.additional information on the current members of the supervisory board is available on our website.the supervisory board has established its own rules of procedure,specifying responsibilities,work
214、 processes and required majorities.it has also adopted separate rules of procedure for the audit committee.as provided for in the german codetermination act and included in the provisions of article 12 of the articles of association,the chairman of the supervisory board and his first deputy must be
215、elected by a majority of twothirds of its constituent members.if a second vote is needed,the shareholder representatives elect the chairman of the supervisory board,and the employee representatives his first deputy,by a simple majority of the votes cast in each case.the supervisory board is quorate
216、if all its members have been invited to the meeting or called upon to vote and if ten members including the chairman or alternatively 15 members participate in the vote.if the chairman of the supervisory board so determines,meetings of the supervisory board may be conducted using telecommunications.
217、the chairman of the supervisory board is authorised to make declarations on the supervisory boards behalf based on prior resolutions.Objectives for composition of Supervisory Board in accordance with item 5.4.1 para.2 of the german corporate governance code,the supervisory board has set itself the f
218、ollowing objectives for its composition:/the main criteria for selecting future members of the supervisory board continue to be sustained corporate profitability,personal abilities,talents,experience(especially of an international nature),independence,professional knowledge and enterprise of the nom
219、inated persons./all members of the supervisory board should be free of relevant conflicts of interest./in selecting candidates for membership,the supervisory board should pay due regard to diversity,especially in terms of age,internationality and gender.by the beginning of the next term of office(sc
220、heduled for 2014),at least 20%of the members should be female,with this figure increasing to at least 30%by the start of the following term of office(scheduled for 2019).currently,four members of the supervisory board are women:two representatives of the employees and two shareholder representatives
221、.the aforementioned objectives apply to the supervisory board as a whole.shareholder and employee representatives will each contribute their share to meeting them,and the bodies responsible under the codetermination agreement for election proposals to the european electoral board are requested to ta
222、ke due consideration of the objectives within the framework of the current rules.in addition,the supervisory boards rules of procedure provide for a recommended age limit of 70 for candidates.corporate governance/corporate governance report and corporate governance stateMent30Munich re group annual
223、report 2011The five Supervisory Board committees Munich reinsurance companys supervisory board has set up five committees:the standing committee,the personnel committee,the audit committee,the nomination committee,and the conference committee.the full supervisory board is regularly informed about th
224、e work of the committees by their respective chairmen.their main responsibilities are as follows:Standing Committeethe standing committee prepares supervisory board meetings insofar as no other committee is responsible for doing so.it decides on matters of company business requiring the supervisory
225、boards approval unless the full supervisory board or another committee is responsible.it makes amendments to the articles of association that only affect the wording,and decides on whether and when guests may attend supervisory board meetings.besides this,it prepares the annual declaration of confor
226、mity with the german corporate governance code,in accordance with section 161 of the german stock companies act,and the supervisory boards report on the companys corporate governance in the annual report.every year,it reviews the efficiency of the supervisory boards work and submits appropriate prop
227、osals to the full supervisory board where necessary.it also approves loan transactions of the company with senior managers and supervisory board members or parties related to them,as well as company contracts with members of the supervisory board.Members of the standing committee are hansJrgen schin
228、zler(chairman),herbert bach,hans peter clauen,Wolfgang Mayrhuber and bernd pischetsrieder.Personnel Committee the personnel committee prepares the appointment of members of the board of Management and,together with the board of Management,concerns itself with longterm succession planning.it also pre
229、pares the supervisory boards resolution on the remuneration system for the board of Management,including the total remuneration of the individual members of the board of Management.the personnel committee represents the company visvis the members of the board of Management and is responsible for per
230、sonnel matters involving members of that board unless these are issues that have been allocated to the full supervisory board.it approves loan transactions between the company and members of the board of Management or parties related to them,as well as any material transactions between the company o
231、r its associated companies and members of the board of Management or parties related to them.it also decides on secondary occupations that members of the board of Management may pursue and seats they hold on the boards of other companies.Members of the personnel committee are hansJrgen schinzler(cha
232、irman),herbert bach and bernd pischetsrieder.Audit Committeethe audit committee prepares supervisory board resolutions on the adoption of the annual company financial statements and approval of the group financial statements,reviews the financial reporting,discusses the quarterly reports,and takes d
233、elivery of the audit reports and other reports and statements by the external auditor.the committee monitors the accounting process,including the effectiveness of the companys internal control system,the risk management system,the compliance system and internal audit system.furthermore,it initiates
234、the decision on the appointment of the external auditor and monitors the latters independence and quality.it appoints the external auditor for the company and group financial statements,determines focal points of the audits and agrees the auditors fee for the annual audit;the same applies to the rev
235、iew of the halfyear financial report.in addition,together with the board of Management,the audit committee prepares the annual discussion of the risk strategy held before the supervisory board and discusses any changes or deviations from the risk strategy with the board of Management during the year
236、.in this connection,the audit committee obtains reports not only from the board of Management but also directly from the compliance officer,the head of group audit,and the chief risk officer,or from corporate counsel.Members of the audit committee are henning Kagermann(chairman),christian fuhrmann,M
237、arco nrenberg,anton van rossum and hansJrgen schinzler.corporate governance/corporate governance report and corporate governance stateMent31Munich re group annual report 2011Nomination Committeecomprising solely representatives of the shareholders,the nomination committee suggests suitable candidate
238、s to the supervisory board for the latters election proposals to the annual general Meeting.it has drawn up and adopted a list of criteria on which these proposals are to be based.Members of the personnel committee are hansJrgen schinzler(chairman),henning Kagermann and bernd pischetsrieder.Conferen
239、ce Committeethe conference committee makes personnel proposals to the supervisory board if the requisite twothirds majority is not achieved in the first vote when it comes to appointing or dismissing members of the board of Management.its responsibilities have remained the same after application of
240、the codetermination agreement and are now laid down in the articles of association and the supervisory boards rules of procedure.Members of the conference committee are hansJrgen schinzler(chairman),herbert bach,hans peter clauen and bernd pischetsrieder.More details of the work of the supervisory b
241、oard committees in the financial year ended can be found in the report of the supervisory board to the annual general Meeting,which is printed on page 22 ff.annual general Meetingthe regular responsibilities of the annual general Meeting include reaching a resolution on the appropriation of profits
242、and approving the actions of the board of Management and supervisory board.at the companys annual general Meeting,the principle of“one share,one vote”applies.insofar as shareholders are entered under their own name as being the holders of shares which belong to a third party and exceed the upper lim
243、it of 2%of the share capital as stated in the articles of association,the shares entered do not carry any voting rights.the aim of this provision is greater transparency of the share register.besides this,it is intended to facilitate direct contact with the shareholders,especially in connection with
244、 the convening of the annual general Meeting and the exercising of voting rights.declaration of the board of Management and supervisory board of Munich reinsurance company in accordance with section 161 of the german stock companies act,dated november 2011“since the last declaration of conformity in
245、 november 2010,Mnchener rckversicherungsgesellschaft aktiengesellschaft in Mnchen has fulfilled all the recommendations of the german corporate governance code of 26 May 2010(published on 2 July 2010)and will continue to do so in future.”important rules of corporate governanceMunich Re Code of Condu
246、ctbeyond this,we have our own Munich re code of conduct specifying highlevel ethical and legal requirements that must be met by employees.this document is also published on our website.in our code of conduct we clearly state our views on corporate integrity,i.e.legally impeccable behaviour based on
247、ethical principles.the code of conduct contains regulations that are binding on all Munich re employees including the management.in this connection,employees also have the option of contacting an external and independent ombudsman,who reports cases of suspected fraud to the fraud prevention committe
248、e,comprising the fraud prevention officer and the compliance officer,thus corporate governance/corporate governance report and corporate governance statement32munich re group annual report 2011Remuneration report1structure of the remuneration system for the Board of management in conformity with the
249、 german corporate governance code,we here explain the principles of the remuneration system for munich res Board of management and the structuring of the individual remuneration components.in accordance with item 4 of the german corporate governance code,the remuneration system for the Board of mana
250、gement is determined by the full supervisory Board.the personnel committee of the supervisory Board,comprising the chairman of the supervisory Board,one shareholder representative and one employee representative,prepares the resolution for the full supervisory Board.the remuneration system for membe
251、rs of the Board of management in place since 1 January 2010 focuses more strongly than before on longterm targets and thus creates an even greater incentive for sustainable corporate development.no changes were made with effect from 1 January 2011.1 this remuneration report is part of the group mana
252、gement report.supporting munich res antifraud management.in the ergo group,as from 1 January 2012,the Board of management has transferred responsibility for overseeing adherence to corporate rules of conduct to a separate compliance unit,which reports directly to the chairman of the Board.through th
253、is new setup,the prevention and avoidance of compliance violations are assigned top priority.Global Compactto make clear munich res understanding of important values and thus also its corporate responsibility inside and outside our group,munich re joined the united nations global compact in 2007.the
254、 ten principles of this declaration form the benchmark for our actions throughout the group and thus provide the fundamental framework for our corporate responsibility.our annual communication on progress for the un global compact is integrated into the corporate responsibility portal on our website
255、.Principles for Responsible Investmentin 2006,munich re became the first german company to sign the un principles for responsible investment(pri).there is a link to the pri via the corporate responsibility portal on our website,where we also report on how we implement these principles for sustainabl
256、e investment.corporate governance/corporate governance report and corporate governance stateMent33Munich re group annual report 2011Structure of the remuneration system for the Board of Management ComponentShare1Assessment basis/parametersCorridorPrecondition for paymentPaymentBasic remunerationplus
257、 remuneration in kind/fringe benefits(company car,healthcare,security measures,insurance)30%functionresponsibilitylength of service on boardfixedcontractual stipulationsMonthlyVariable remuneration30%annual performance(for 100%achievement of objectives)70%corporate performance result contribution of
258、 organisational unit(s)personal performancegroup objectivecompany objectivedivisional objectivesindividual objectives0200%(fully achieved=100%)achievement of annual objectivesin the second year,on condi-tion that 50%of the net amount paid out is invested by the Board member in Munich Re shares that
259、must be held for at least a four-year period70%multi-year performance(for 100%achievement of objectives)objectives for the business fields reinsurance primary insurance Munich healthindividual objectives 0200%(fully achieved=100%)achievement of threeyear objectivesin the fourth year,on condi-tion th
260、at 25%of the net amount paid out is invested by the Board member in shares that must be held for at least a two-year periodPensiona)Defined benefits plan(board members appointed before 2009 who had reached the age of 55 in 2008)pensionable basic remuneration(=25%of target overall direct remuneration
261、)number of years on the boardfixed retirement insured event premature termination or nonextension of employment con tract under certain circumstancesb)Defined contribution plan(board members appointed before 2009 who had not reached the age of 55 in 2008 and board members appointed since 2009)target
262、 overall direct remunerationpension contribution1 for the variable remuneration,the share shown presupposes 100%achievement of the objectives.Fixed componentsbasic remunerationthe fixed annual basic remuneration is paid in the form of a monthly salary.remuneration in kind/fringe benefitsremuneration
263、 in kind and fringe benefits are granted according to function,and are commensurate with market conditions(daX 30 companies).income tax on the benefits in question is paid individually for each member of the board of Management,with the company bearing the amount due.remuneration in kind and fringe
264、benefits are valued on the basis of expenditure for disclosure in the annual report.corporate governance/corporate governance report and corporate governance stateMent34Munich re group annual report 2011Variable remunerationthe variable remuneration component is geared to the overall performance of
265、the group and defined organisational units and to the personal performance of the individual members of the board of Management.its amount depends on the degree to which annually set objectives for annual and multiyear performance are pliance with the processes laid down for specifying objectives an
266、d assessing their achievement is critically reviewed by the external auditor,who verifies whether the envisaged financial objectives are measurable and whether their achievement is in accordance with the guidelines established by Munich re.the outcome of this review and any potentially controversial
267、 aspects are rendered transparent for the supervisory board.achievement of objectives is measured at the end of the performance terms,there being no adjustment of the targets during these periods.payouts are made at the end of the one and threeyear periods under consideration.With a view to promotin
268、g a management approach that takes due account of the companys longterm interests,the members of the board of Management are obliged to invest 50%and 25%of the paidout variable remuneration in Munich reinsurance company shares.variable remuneration based on annual performanceannual performance targe
269、ts for the variable remuneration component geared to annual performance are set on the basis of divisional results and individual objectives as well as the company result(propertycasualty reinsurance)and group result.30%of the target amount for variable remuneration can be earned in the event of ful
270、l achievement(=100%)of the objectives.the targets and scaling for group,company and divisional objectives are geared to particular indicators,while individual objectives form the basis for the achievement of personal targets.the key indicator used for the group result is rorac(return on riskadjusted
271、 capital),which is derived from key figures in external accounting and from other important portfolio and performance data.information on the definition of rorac is provided on page 61.the performance measures embodied in valuebased management are used for the company result and the divisional resul
272、ts.the objectives are weighted individually according to the responsibilities of the individual members of the board of Management.the variable remuneration for annual performance is reviewed and decided on by the full supervisory board and then paid out in the year after the oneyear period under co
273、nsideration.payment is effected on condition that 50%of the net payout amount is invested in Munich reinsurance company shares that must be held for at least a fouryear period.variable remuneration based on multiyear performancefor the multiyear performance remuneration component,threeyear targets b
274、ased on the performance of the reinsurance,Munich health and primary insurance segments and on individual objectives are fixed every year.70%of the overall target amount for variable remuneration can be earned in the event of full achievement(=100%)of the objectives.the targets and scaling for the b
275、usiness field targets are geared to vbM performance indicators,and the individual targets are based on individual objectives.the objectives are weighted individually according to the responsibilities of the individual members of the board of Management.the variable remuneration for the multiyear per
276、formance is reviewed and decided on by the full supervisory board and then paid out in the year after the threeyear period under consideration.payment is effected on condition that 25%of the net payout amount is invested in Munich reinsurance company shares that must be held for at least a twoyear p
277、eriod.corporate governance/corporate governance report and corporate governance stateMent35Munich re group annual report 2011full and prorata calculation of the variable remuneration for annual and multiyear performancethe basis for the full and prorata calculation of the variable remuneration is th
278、e first year.only the full“eligible”months in this year are taken into account(pro rata temporis).in the case of retirement,occupational disability,death or premature departure from the company for other reasons,the rules for the full and prorata calculation apply.Share-based remuneration agreements
279、 in force during the reporting periodMidterm incentive plan 20092011 this plan is based on performance over a threeyear period.it promotes the medium and longterm increase in Munich res value in terms of internal value creation(valuebased success factors)and improvement in the total shareholder retu
280、rn(tsr)of Munich re shares.the plan provides for the granting of performance share units,free of charge,to members of the board of Management for the first and last time for 2009.plan participants have the opportunity to share in the development of Munich res value if they achieve their performance
281、targets and increase the tsr.for the valuebased performance objectives,threeyear average targets are set for each of the business fields reinsurance,primary insurance and Munich health.achievement of objectives is measured at the end of the plans term,there being no adjustment of the targets during
282、the course of the plan.the tsr represents the total return on shares,comprising both the rise in the share price and the dividends paid over a period of three years.further information on the Midterm incentive plan can be found in the notes to the financial statements under(45)Midterm incentive plan
283、.longterm incentive planthis remuneration component,with a longterm perspective,is linked to the sustained appreciation of Munich res share price.the longterm incentive plan,launched each year as from 1999,was set up for the last time in 2009 for members of the board of Management and in 2010 for ot
284、her eligible participants.the participants were granted a certain number of stock appreciation rights.these can only be exercised if,after a twoyear vesting period,Munich res share price has risen by at least 20%since inception of the plan and the shares have outperformed the euro stoXX 50 at least
285、twice over a threemonth period during the term of the plan.Whether the stock appreciation rights can be exercised and,if so,when,is not certain.the exercising and proceeds depend on the development of the share price and on fulfilment of the exercise conditions.future obligations arising from the lo
286、ngterm incentive plans are safeguarded in such a way that the expenses resulting from a growth in value of the stock appreciation rights are neutralised as far as possible by an increase in the value of the share portfolio.the amount of income is limited.up to now,it has only been possible to exerci
287、se stock appreciation rights under the plans set up in 1999 and 2003 to 2005.further information on the longterm incentive plan can be found in the notes to the financial statements under(44)longterm incentive plan.Weighting of remuneration componentsin the case of 100%achievement of objectives(annu
288、al performance and multiyear performance),the weightings of the individual components in terms of total remuneration for 2011 were as follows:basic remuneration around 30%and variable remuneration around 70%,of which 30%was based on annual performance and 70%on multiyear performance.annual objective
289、s,multiyear objectives and investment in shares together form a wellbalanced and economic,i.e.strongly riskbased,incentive system,designed to ensure that the targets set for the members of the board of Management do not have undesirable effects.no guaranteed variable salary components are granted.co
290、rporate governance/corporate governance report and corporate governance stateMent36Munich re group annual report 2011all in all,the remuneration system for members of the board of Management was in conformity with the recommendations of the german corporate governance code for 2011.in particular,it
291、also complies with the german regulation of 6 october 2010 concerning the supervisory law requirements for remuneration schemes in the insurance sector(insurance compensation regulation versvergv).beyond the actual remuneration system,the level of total remuneration is set and regularly monitored by
292、 the full supervisory board,acting on recommendations from the supervisory boards personnel committee.the consideration of what is appropriate remuneration takes into account data from peergroup companies and the relation to remuneration of other Munich reinsurance company employees.criteria also in
293、clude the respective board members duties,the board members personal performance,the performance of the board as a whole and the financial situation,performance and future prospects of Munich re.new board members are generally placed at a level which allows sufficient potential for development in th
294、e first three years.Continued payment of remuneration in the case of incapacity to workin the case of temporary incapacity to work due to illness or for other cause beyond the board members control,the remuneration is paid until the end of the contract of employment.the company may terminate the con
295、tract prematurely if the board member is incapacitated for a period of longer than 12 months and it is probable that he will be permanently unable to fully perform the duties conferred on him(permanent incapacity to work).in this event,the board member will receive a disability pension.Other remuner
296、ationin the case of seats held on other boards,remuneration for board memberships must be paid over to the company or is deducted in the course of regular remuneration computation.exempted from this is remuneration for memberships explicitly recognised by the company as private.the members of the bo
297、ard of Management have no contractual entitlement to severance payments.if the board members activities on the board are terminated prematurely without good cause within the meaning of section 626 of the german civil code,payments due may not surpass the equivalent of two years total remuneration(th
298、ree years total remuneration in the event of acquisition of a controlling interest or change of control within the meaning of section 29 para.2 of the german securities acquisition and takeover act)and may not cover more than the remaining period of the employment contract.the calculation is to be b
299、ased on the overall remuneration for the past financial year and,if necessary,on the probable overall remuneration for the current financial year.in the event of a change of control,only the conditions of the longterm incentive plan(under which stock appreciation rights were granted to members of th
300、e board of Management for the last time in 2009)provide for special exercise options.details of this are available in the notes to the financial statements under(44)longterm incentive plan.Pensionsup to and including 2008,the members of the board of Management were members of a defined benefit plan,
301、providing for payment of a fixed pension amount depending on their basic remuneration and years of service on the board.the pension level started at 30%and could reach a maximum of 60%of annual basic remuneration.beginning in 2009,pension plans for board members were changed to a defined contributio
302、n system.the main aim of this change was the fullest possible outsourcing of all pensionspecific risks from the companys balance sheet.this major risk transfer was achieved by financing increases in entitlements exclusively by paying premiums corporate governance/corporate governance report and corp
303、orate governance stateMent37Munich re group annual report 2011into insurance policies concluded to cover these benefit obligations.this means the company is no longer liable for the pension benefits,as these are covered by the aforementioned insurance policies.the longevity risk,the biometric risks
304、of premature occurrence of a pensionable event(e.g.disability or death of a member of the board during active service),and the capital market risk were thus transferred to the insurer and the individual board members.as of 2009,newly appointed members of the board hence become members of a defined c
305、ontribution plan.for this plan,the company provides the board members with a pension contribution,which in 2009 was related to basic remuneration,for each calendar year(contribution year)during the term of their contract.the pension contribution is paid over to an external pension insurer.this insur
306、ers guaranteed interest rate is 2.25%.the insurance benefits that result from the contribution payments to the external insurer constitute the companys pension commitment to the board member.for board members newly appointed as from 1 January 2009,a uniform pension contribution rate has been set;the
307、 annual basic remuneration is multiplied by this rate to arrive at the pension contribution payable.board members who had not reached the age of 55 by the end of 2008 retained as a vested pension their pension entitlement under the previous defined benefit plan(fixed amount in euros)existing at the
308、point of transition on 31 december 2008.as of 1 January 2009,these board members receive an incremental pension benefit generally based on the defined contribution plan for new board members.since the conversion of the pension system took place while board members contracts were in force,the pension
309、 contributions were calculated in such a way that the total of vested pension,pensionfund pension and incremental pension benefit results in an expected pension at age 60 equivalent to that of the previous pension benefit based on realistic estimates.board members who had already reached the age of
310、55 at the conversion date were not transferred to a defined contribution system and remain members of the previous systems defined benefit plan.owing to the increase from 25%to 30%in the share of basic remuneration in overall remuneration as at 1 January 2010,there was a change in the assessment bas
311、is for the board members pensions.an unintended rise in the pensions would otherwise have been the consequence.from 1 January 2010 onwards,the defined benefits are fixed on the basis of“pensionable basic remuneration”,which corresponds to 25%of the target overall direct remuneration(=basic remunerat
312、ion+variable remuneration on the basis of 100%achievement of objectives).in the case of the defined contribution plan,the rate is fixed on the basis of the target overall direct remuneration.benefits on termination of employmentOccupational pensionboard members are entitled to an occupational pensio
313、n on retiring from active service with the company after reaching the age of 60 or,at the latest,65.benefit amount:/for a period of six months,previous monthly basic remuneration(only for board members appointed prior to 2006)/under the defined contribution plan for new members as from 2009:annuity
314、based on the policy reserve built up under the external insurance or payment of the policy reserve as a lump sum/for board members transferred from the old system to the new:vested pension from the defined benefit plan up to 2008 and annuity or lump sum from the policy reserve under the defined cont
315、ribution plan/in the case of defined benefit plans:defined benefit of between 30%and 60%of pensionable basic remunerationcorporate governance/corporate governance report and corporate governance stateMent38Munich re group annual report 2011Disability pensionboard members are entitled to a disability
316、 pension if,due to permanent incapacity to work,their contract ends by mutual agreement,is terminated by the company,or their appointment is not extended or revoked.permanent incapacity to work means that the board Member is incapacitated for a period of longer than 12 months and it is probable that
317、 he will be permanently unable to fully perform the duties conferred on him.benefit amount:/for a period of six months,previous monthly basic remuneration(only for board members appointed prior to 2006)/under the defined contribution plan for new members as from 2009:80%of the insured occupational p
318、ension up to the age of 59,with subsequent occupational pension/for board members transferred from the old system to the new:vested pension from the defined benefit plan up to 2008 and 80%of the insured occupational pension benefit up to age 59 with subsequent occupational pension based on the defin
319、ed contribution plan/in the case of defined benefit plans:defined benefit of between 30%and 60%of pensionable basic remunerationReduced occupational pension on early retirementboard members are entitled to an occupational pension if the contract of employment is terminated as a result of nonextensio
320、n or revocation of the board members appointment without the board member having given cause for this through a gross violation of his duties or at his own request.the precondition is that the board member has already passed the age of 50,has been in the employment of the company for more than ten y
321、ears when the contract terminates,and has had his appointment to the board of Management extended at least once.benefit amount:/for a period of six months,previous monthly basic remuneration(only for board members appointed prior to 2006)/under the defined contribution plan for new members as from 2
322、009:annuity based on the policy reserve built up under the external insurance or payment of the policy reserve as a lump sum at the date the pension benefit is claimed/for board members transferred from the old system to the new:entitlement of between 30%and 60%of pensionable remuneration,reduced by
323、 2%for each year or part thereof short of the board members 65th birthday;the company assumes payment of the difference between the monthly occupational pension and the monthly incremental pension from the external insurance.the policy reserve available at the date the pension benefit is claimed can
324、 be paid out as an annuity or as a lump sum./in the case of defined benefit plans:defined benefit of between 30%and 60%of the pensionable basic remuneration,reduced by 2%for each year or part thereof short of the board members 65th birthdayVested benefits for occupational pension,disability pension
325、and surviving dependantsvested benefits are paid upon the board member reaching the age of 60,in the case of incapacity to work,or in the event of the board members death.Vested benefits under the German Employers Retirement Benefits Act/board members have vested benefits under the german employers
326、retirement benefits act if they leave the company before reaching the age of 60 and the pension commitment has existed for at least five years before.corporate governance/corporate governance report and corporate governance stateMent39Munich re group annual report 2011benefit amount:/under the defin
327、ed contribution plan for new members as from 2009:annuity based on the policy reserve built up under the external insurance or payment of the policy reserve as a lump sum at the date the insured event occurs/for members of the board of Management transferred from the old system to the new:the entitl
328、ement under the vested pension is a proportion of the vested pension based on the ratio of actual service with the company to the period the board member would have worked for the company altogether up to the fixed retirement age(section 2 para.1 of the german employers retirement benefits act).the
329、entitlement from the incremental pension comprises the pension benefits fully financed under the insurance contract up to the occurrence of the insured event based on the pension contributions made up to the date of leaving the company(section 2 para.5a of the german employers retirement benefits ac
330、t).this entitlement is paid out as an annuity or a lump sum./in the case of defined benefit plans:defined benefit of between 30%and 60%of pensionable basic remuneration.the vested benefits are a proportion of the occupational pension,based on the ratio of actual service with the company to the perio
331、d the board member would have worked for the company altogether until his 65th birthday(section 2 para.1 of the german employers retirement benefits act).Improved vested benefits/improved vested benefits are granted if the contract ends owing to nonextension of the board members appointment(by the c
332、ompany)but not due to gross violation of duties or to the board member giving notice.a further precondition is that the board member leaves the board before reaching the age of 60 and has at least ten years service with the company.the improved vested benefits do not apply to board members appointed
333、 as from 2009.for board members transferred from the old system to the new,the improved vested benefits apply only to that part of their pension resulting from the vested pension under the defined benefit plan.benefit amount:/for a period of six months after leaving the board,previous monthly basic remuneration(only for board members appointed prior to 2006)/for the share from the defined benefit
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