Annual Report 2006 - Notes 1

1 | Self-used land and buildings

		31 Dec. 2006 Group total € 000	31 Dec. 2005 Group total € 000
Book values for
	Property and casualty insurance	104,338	163,506
	Life insurance	116,025	58,621
	Health insurance	13,635	14,260
		233,997	236,388
Market values for
	Property and casualty insurance	132,918	188,385
	Life insurance	124,789	63,430
	Health insurance	18,338	20,043
		276,045	271,859
Acquisition values		323,175	323,696
Cumulative depreciation		-89,177	-87,309
Book value		233,997	236,388

Useful life for land and buildings		10-80 years	10-80 years

Additions from company acquisition		31 Dec. 2006 € 000	31 Dec. 2005 € 000
Self-used land and buildings		2,087	2,448

The market values are derived from expert reports.

2 | Other tangible assets

	31 Dec. 2006 Group total € 000	31 Dec. 2005 Group total € 000
Tangible assets	44,608	47,842
Inventories	4,844	7,296
Other assets	61,661	80,160
Total	111,113	135,299

Tangible assets Development in financial year	Group total € 000
Acquisition values as at 31 Dec. 2005	156,710
Cumulative depreciation up to 31 Dec. 2005	-108,867
Book value as at 31 Dec. 2005	47,842

Currency translation changes	171
Additions	14,052
Disposals	-2,766
Transfers	-52
Appreciation and depreciation	-14,638
Book value as at 31 Dec. 2006	44,608

Acquisition values as at 31 Dec. 2006	159,825
Cumulative depreciation up to 31 Dec. 2006	-115,216
Book value as at 31 Dec. 2006	44,608

Tangible assets refer mainly to office equipment. They are depreciated over a useful life of four to ten years. The amounts of depreciation are recognised in the income statement on the basis of allocated operating expenses under the items insurance benefits, operating expenses and net investment income.

Additions from company acquisition	31 Dec. 2006 € 000	31 Dec. 2005 € 000
Tangible assets	1,081	449

3 | Land and buildings held as financial investments

		31 Dec. 2006 Group total € 000	31 Dec. 2005 Group total € 000
Book values for
	Property and casualty insurance	334,423	384,362
	Life insurance	411,829	285,862
	Health insurance	181,204	186,127
		927,456	856,351
Market values for
	Property and casualty insurance	456,839	502,804
	Life insurance	566,932	425,911
	Health insurance	408,361	408,462
		1,432,132	1,337,177
Acquisition values		1,257,256	1,150,615
Cumulative depreciation		-329,800	-294,264
Book value		927,456	856,351

Useful life for land and buildings		10-80 years	10-80 years

Additions from company acquisition		31 Dec. 2006 € 000	31 Dec. 2005 € 000
Land and buildings used by third parties		52,667	303

The market values are derived from expert reports.

		31 Dec. 2006 € 000
Change on impairment for current year		11,451
	of which reallocation	11,451

4 | Deferred acquisition costs

		2006 Group total € 000	2005 Group total € 000
Property and casualty insurance
	Situation as at 1 Jan.	97,131	89,209
	Currency translation changes	352	630
	Changes to scope of consolidation	168	0
	Capitalisation	57,065	47,851
	Depreciation	-44,665	-40,560
	Situation as at 31 Dec.	110,050	97,131

Life insurance
	Situation as at 1 Jan.	496,159	456,035
	Currency translation changes	268	59
	Capitalisation	105,867	106,800
	Interest surcharge	22,778	25,497
	Depreciation	-85,643	-92,232
	Situation as at 31 Dec.	539,428	496,159

Health insurance
	Situation as at 1 Jan.	214,008	192,754
	Currency translation changes	1	1
	Changes to scope of consolidation	0	20,273
	Capitalisation	14,371	15,119
	Interest surcharge	9,166	8,468
	Depreciation	-23,593	-22,608
	Situation as at 31 Dec.	213,952	214,008

Consolidated Financial Statements
	Situation as at 1 Jan.	807,297	737,998
	Currency translation changes	620	690
	Changes to scope of consolidation	168	20,273
	Capitalisation	177,302	169,770
	Interest surcharge	31,944	33,965
	Depreciation	-153,901	-155,400
	Situation as at 31 Dec.	863,430	807,297

5 | Goodwill

		Group total € 000
Acquisition values as at 31 Dec. 2005		315,826
Cumulative depreciation up to 31 Dec. 2005		-92,408
Book value as at 31 Dec. 2005		223,418

Acquisition values as at 31 Dec. 2006		353,975
Cumulative depreciation up to 31 Dec. 2006		-100,911
Book value as at 31 Dec. 2006		253,064

		Group total € 000
Cumulative depreciation up to 31 Dec. 2006		100,911
	of which relating to impairment	16,648
	of which current depreciation	84,263

		31 Dec. 2006 € 000
Change in impairment for current year		0
	of which reallocation	0

The values mentioned above include the goodwill and the purchase price paid for the total acquired insurance policies.

Company acquisitions 2006	Amounts placed at the time of acquisition € 000	Book value of the acquired companies € 000
Assets	106,191	106,191
Tangible assets	3,168	3,168
Land and buildings held as financial investments	52,667	52,667
Intangible assets	1,663	1,663
Shares in associated companies	0	0
Investments	20,389	20,389
Investments held for unit-linked and index-linked life insurance policyholders	0	0
Share of reinsurance in the technical provisions	963	963
Receivables including receivables under insurance business	12,209	12,209
Receivables from income tax	329	329
Deferred tax assets	1,842	1,842
Liquid funds	12,961	12,961

Equity and liabilities	106,191	106,191
Total equity	53,056	53,056
Subordinated liabilities	0	0
Technical provisions	19,050	19,050
Technical provisions for life insurance policies held on account and at risk of policyholders	0	0
Financial liabilities	3,717	3,717
Other provisions	211	211
Payables and other liabilities	22,577	22,577
Liabilities from income tax	26	26
Deferred tax liabilities	7,554	7,554

6 | Other intangible assets

	Self-produced software Group total € 000	Acquired intangible assets Group total € 000
Acquisition values as at 31 Dec. 2005	39,378	137,295
Cumulative depreciation up to 31 Dec. 2005	-26,423	-101,222
Book value as at 31 Dec. 2005	12,955	36,074

Acquisition values as at 31 Dec. 2006	40,003	149,972
Cumulative depreciation up to 31 Dec. 2006	-32,094	-110,714
Book value as at 31 Dec. 2006	7,909	39,258

Other intangible assets as at 31 Dec. 2006 comprised:

	31 Dec. 2006 € 000	31 Dec. 2005 € 000
Computer software	40,034	43,096
Licences	2,438	3,063
Other intangible assets	4,695	2,870
	47,167	49,029

Useful life	years	years
Self-produced software	2-5	2-5
Acquired intangible assets	2-5	2-5

The intangible assets include paid-for and self-produced computer software and licences.

The amortisation of the other intangible assets were recognised in the income statement on the basis of allocated operating expenses under the items insurance benefits, operating expenses and net investment income.

Intangible assets are depreciated using the straight-line method.

Additions from company acquisition	31 Dec. 2006 € 000
Self-produced software	0
Acquired intangible assets	1,496

	31 Dec. 2005 € 000
Research and development expenditures recorded as an expense during the period under review	2,105

7 | Shares in affiliated companies and companies valued at equity

		31 Dec. 2006 € 000	31 Dec. 2005 € 000
Current market value for
	Shares in affiliated companies of minor importance¹⁾	18,804	18,407
	Shares in associated companies of minor importance	26,722	1,522

Book value for
	Shares in associated companies valued at equity	345,276	217,947

Equity for
	Shares in affiliated companies of minor importance	13,919	17,999

Annual net profit/deficit for the year
	Shares in affiliated companies of minor importance	-4,019	-447
¹⁾ The shares in affiliated companies of minor importance are shown on the balance sheet as available for disposal at any time under variable yield securities (Assets E. I. 1.).

Shares in associated companies	31 Dec.2006 € 000
Current market value of associated companies listed on a public stock exchange	0
Profits/losses for the period	45,017
Unrecorded, proportional loss, ongoing, if shares of loss are no longer recorded	0
Unrecorded, proportional loss, cumulative, if shares of loss are no longer recorded	0

Due to restructuring measures at STRABAG SE, the share of equity relevant to the adjustment at equity was increased. The resulting adjustment effect is €18.830 million.

8 | Securities, available for sale

Type of investment

Shares in affiliated companies
Shares
Equity funds
Debenture bonds not capital-guaranteed
Other variable-yield securities
Participating interests and other investments
Fixed interest securities
Total

Acquisition costs		Fluctuation in value not affecting income		Accumulated value adjustments		Foreign currency differences affecting income		Market values
31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000
18,804	18,407	0	0	0	0	0	0	18,804	18,407
901,955	948,712	38,249	68,456	–26,771	–17,109	0	0	913,433	1,000,059
467,114	549,053	32,194	47,395	0	–981	0	0	499,309	595,467
700,879	518,206	40,131	25,673	0	270	–12,681	15,645	728,329	559,793
864,862	563,593	3,639	14,432	–2,229	–84	0	0	866,272	577,941
241,096	316,304	209,174	13,235	–14,080	–287	0	0	436,190	329,251
10,793,413	9,774,805	33,575	207,805	–129,260	–53,052	–62,959	–3,285	10,634,769	9,926,273
13,988,124	12,689,079	356,963	376,996	–172,341	–71,244	–75,640	12,360	14,097,106	13,007,192

The market values listed for participating interests contain participating interest valuations for the first time, resulting in an appreciation in the amount of €153.145 million. In 2005, application of this valuation method would have resulted in an appreciation of €96.443 million.

Type of investment	Accumulated value adjustments		Of which accumulated from previous years		Of which from current year
	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000
Shares in affiliated companies	0	0	0	0	0	0
Shares	–26,771	–17,109	–10,550	–10,388	–16,221	–6,721
Equity funds	0	–981	0	0	0	–981
Debenture bonds not capital-guaranteed	0	270	0	270	0	0
Other variable-yield securities	–2,229	–84	0	0	–2,229	–84
Participating interests and other investments	–14,080	–287	0	0	–14,080	–287
Fixed interest securities	–129,260	–53,052	–38,106	–31,616	–91,154	–21,436
Total	–172,341	–71,244	–48,656	–41,735	–123,684	–29,509

Type of investment	Change in value adjustment current year	Of which write-down/write-up affecting income	Of which write-up of equity
	31 Dec. 2006 € 000	31 Dec. 2006 € 000	31 Dec. 2006 € 000
Shares in affiliated companies	0	0	0
Shares	–14,385	–16,221	1,836
Equity funds	0	0	0
Debenture bonds not capital-guaranteed	200	200	0
Other variable-yield securities	–2,145	–2,145	0
Participating interests and other investments	–14,080	–14,080	0
Fixed interest securities	–86,983	–86,983	0
Total	–117,393	–119,229	1,836

Change in equity as at 31 Dec. 2006		Allocation not affecting income		Withdrawal* due to disposals affecting income		Change in unrealised gains/losses
		31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000
Other securities
	Available for sale	115,846	62,956	–50,297	–23,734	65,549	39,222
* Withdrawal affecting the income statement due to disposals and impairments.

Remaining contractual term	Acquisition costs		Market values
	31 Dec. 2006 € 000	31 Dec. 2005 € 000	31 Dec. 2006 € 000	31 Dec. 2005 € 000
Infinite	46,558	0	47,347	0
Up to 1 year	657,301	335,663	656,151	339,713
Of more than 1 year up to 5 years	3,942,155	3,092,007	3,922,674	3,157,522
Of more than 5 years up to 10 years	4,212,410	4,692,078	4,156,568	4,748,540
More than 10 years	3,500,730	2,736,856	3,446,630	2,818,232
Total	12,359,154	10,856,603	12,229,370	11,064,007

The remaining maturities stipulated by contract refer to fixed income securities, other variable-rate securities and bonds without capital guarantee.

Risk of default rating		31 Dec. 2006 € 000
Fixed interest securities
	Rating AAA	3,343,467
	Rating AA	2,657,943
	Rating A	3,637,927
	Rating BBB	1,024,734
	Rating < BBB	1,152,657
	Not assigned	412,642
Rating total of fixed interest securities		12,229,370

Issuer countries
Share securities
	IE, NL, UK, US	298,865
	AT, BE, CH, DE, DK, FR, IT	691,356
	ES, FI, NO, SE	113,819
	Remaining EU	231,323
	Other countries	190,450
Issuer countries total of share securities		1,525,812
Other shareholdings		323,120
Total variable-yield securities		1,848,932

9 | Derivative financial instruments

		31 Dec. 2006 € 000	31 Dec. 2005 € 000
Market values
Share risk		42,278	5,217
Interest rate change risk		6,045	311
Currency risk		27,790	–25,112
Structured risk		18,648	30,961
Total		94,761	11,376
Structured risk – of which:
	Share risk	18,925	18,438
	Interest rate change risk	–12,108	3,391
	Currency risk	10,428	7,566
	Credit risk	1,404	1,567
Balance sheet value
Investments		95,970	48,405
Financial liabilities		–1,209	–37,029

Notes 1 - 9