Due to the investment structure and the high proportion of interest bearing titles, the interest rate risk forms a very important component of the financial risks. The following table shows the interest-bearing securities and the average interest coupons arranged by the most important investment categories and their average coupon interest rate on the reporting date.
|
Average interest coupon |
€ |
USD |
Other | |||
|
% |
2010 |
2009 |
2010 |
2009 |
2010 |
2009 |
|
Fixed interest securities |
|
|
|
|
|
|
|
High-grade bonds |
3.89 |
4.23 |
3.90 |
3.92 |
5.18 |
5.64 |
|
Bank/company bonds |
3.91 |
3.82 |
5.26 |
8.63 |
4.13 |
4.36 |
|
Emerging markets bonds |
5.71 |
5.97 |
9.67 |
12.88 |
10.06 |
9.70 |
|
High-yield bonds |
7.63 |
8.27 |
10.07 |
11.29 |
5.44 |
4.30 |
|
Other investments |
3.48 |
4.44 |
0.00 |
0.00 |
0.00 |
1.63 |
|
|
|
|
|
|
|
|
|
Fixed interest liabilities |
|
|
|
|
|
|
|
Subordinated liabilities |
5.34 |
5.34 |
|
|
|
|
|
Guaranteed interest life insurance |
2.71 |
2.75 |
|
|
|
|
Long-term policies and life insurance policies with guaranteed interest and profit sharing
Insurance policies with guaranteed interest and additional profit sharing contain the risk that the guaranteed interest rate will not be achieved over a sustained period of time. Capital income produced over and above the guaranteed interest rate will be shared between the policyholder and the insurance company, with the policyholder receiving an appropriate share of the profit. The following table shows the comparison of assets and debts for such insurance policies.
|
Investments for long-term life insurance policies with guaranteed interest and profit sharing |
31 Dec. 2010 |
31 Dec. 2009 |
|
Annuities |
9,440,828 |
8,220,882 |
|
Shares |
642,456 |
392,346 |
|
Alternatives |
708,594 |
674,353 |
|
Holdings |
411,382 |
680,592 |
|
Loans |
1,267,004 |
1,728,081 |
|
Real estate |
1,107,667 |
946,261 |
|
Liquidity |
743,515 |
1,172,910 |
|
123,284 |
121,760 | |
|
Total |
14,444,730 |
13,937,185 |
|
Difference between book value and market value |
|
|
|
Real estate |
264,055 |
361,773 |
|
Loans |
–27,812 |
38,695 |
|
Provisions and liabilities from long-term life insurance policies with guaranteed interest and profit sharing |
31 Dec. 2010 |
31 Dec. 2009 |
|
13,459,346 |
13,193,063 | |
|
Provision for profit-unrelated premium refunds |
1,869 |
226 |
|
Provision for profit-related premium refunds, i.e. policyholder profit sharing |
112,060 |
146,659 |
|
Other technical provisions |
23,806 |
23,451 |
|
108,309 |
92,365 | |
|
Deposits payable |
436,200 |
437,925 |
|
Total |
14,141,590 |
13,893,689 |
The following table shows the structure of the remaining terms of interest bearing securities and loans.
|
Remaining term |
31 Dec. 2010 |
31 Dec. 2009 |
|
Up to 1 year |
810,676 |
660,875 |
|
Of more than 1 year up to 3 years |
1,052,770 |
1,125,700 |
|
Of more than 3 years up to 5 years |
1,792,639 |
1,069,452 |
|
Of more than 5 years up to 7 years |
2,192,915 |
1,672,212 |
|
Of more than 7 years up to 10 years |
2,208,519 |
1,889,945 |
|
Of more than 10 years up to 15 years |
1,361,612 |
1,644,980 |
|
More than 15 years |
1,288,702 |
1,696,312 |
|
Total |
10,707,832 |
9,759,476 |
The capital-weighted average remaining term of technical liabilities is around 8.0 years (2009: 7.9 years).
Long-term unit-linked and index-linked life insurance policies
In the segment of unit-linked and index-linked life insurance, the interest income and all fluctuations in value of the dedicated investments are reflected in the technical provisions. There is therefore no financial risk from the point of view of the insurer. The following table shows the investment structure of financial investments that are used to cover the technical provisions arising from unit-linked and index-linked life insurance policies.
|
Investments in unit-linked and index-linked life insurance policies |
31 Dec. 2010 |
31 Dec. 2009 |
|
Share-based funds |
988,689 |
805,713 |
|
Bond funds |
3,044,113 |
2,536,917 |
|
Liquidity |
81,107 |
86,935 |
|
Other investments |
78,821 |
43,987 |
|
Total |
4,192,730 |
3,473,553 |
Long-term health insurance policies
The actuarial interest rate for the actuarial provision in health insurance lines, which is selected depending on the type of life insurance, is 3%. However, this interest rate is not guaranteed and can, upon presentation of proof to the insurance supervisory authority, be reduced to any lower capital income that may be expected. The following table shows the investment structure available to cover insurance liabilities.
|
Investments for long-term health insurance policies |
31 Dec. 2010 |
31 Dec. 2009 |
|
Annuities |
1,238,629 |
1,203,938 |
|
Shares |
53,963 |
58,105 |
|
Alternatives |
93,450 |
64,839 |
|
Holdings |
199,705 |
8,666 |
|
Loans |
710,918 |
693,555 |
|
Real estate |
318,529 |
301,341 |
|
Liquidity |
169,333 |
275,175 |
|
Total |
2,784,528 |
2,605,618 |
|
Difference between book value and market value |
|
|
|
Real estate |
144,441 |
116,426 |
|
Loans |
3,828 |
–54,466 |
|
Provisions and liabilities |
31 Dec. 2010 |
31 Dec. 2009 |
|
Actuarial provision |
2,533,728 |
2,373,869 |
|
Provision for profit-unrelated premium refunds |
16,578 |
20,252 |
|
Provision for profit-related premium refunds, i.e. policyholder profit sharing |
44,876 |
42,224 |
|
Other technical provisions |
548 |
596 |
|
Provision for unearned premiums |
15,914 |
15,629 |
|
Provision for outstanding claims |
172,279 |
166,913 |
|
Deposits payable |
1,323 |
1,447 |
|
Total |
2,785,246 |
2,620,930 |
Property and casualty insurance policies
Most property and casualty insurance policies are short-term. The technical provisions are not discounted, meaning that no interest is calculated for the short-term investment. The average terms of interest bearing securities and loans invested to cover technical provisions are shown in the following table.
|
Remaining term |
31 Dec. 2010 |
31 Dec. 2009 |
|
Up to 1 year |
102,103 |
169,807 |
|
Of more than 1 year up to 3 years |
182,759 |
232,867 |
|
Of more than 3 years up to 5 years |
325,941 |
270,080 |
|
Of more than 5 years up to 7 years |
358,017 |
273,275 |
|
Of more than 7 years up to 10 years |
570,630 |
507,728 |
|
Of more than 10 years up to 15 years |
186,249 |
293,120 |
|
More than 15 years |
223,849 |
335,114 |
|
Total |
1,949,547 |
2,081,993 |
The investment structure in the property and casualty insurance is as follows.
|
Investments for short-term property |
31 Dec. 2010 |
31 Dec. 2009 |
|
Annuities |
1,606,661 |
1,451,018 |
|
Shares |
221,229 |
140,508 |
|
Alternatives |
62,332 |
64,162 |
|
Holdings |
120,430 |
215,805 |
|
Loans |
464,308 |
521,471 |
|
Real estate |
384,524 |
463,290 |
|
Liquidity |
483,748 |
551,497 |
|
13,510 |
14,389 | |
|
Total |
3,356,743 |
3,422,140 |
|
Difference between book value and market value |
|
|
|
Real estate |
332,259 |
197,569 |
|
Loans |
3,110 |
–35,805 |
|
Provisions and liabilities from short-term property and casualty insurance policies |
31 Dec. 2010 |
31 Dec. 2009 |
|
Provision for unearned premiums |
558,153 |
516,599 |
|
37,959 |
39,837 | |
|
Provision for outstanding claims |
1,871,810 |
1,746,904 |
|
Provision for profit-unrelated premium refunds |
30,991 |
27,011 |
|
Provision for profit-related premium refunds, i.e. policyholder profit sharing |
7,760 |
7,682 |
|
Other technical provisions |
20,032 |
19,980 |
|
Deposits payable |
11,701 |
12,278 |
|
Total |
2,538,406 |
2,370,291 |
The average policy term in property and casualty insurance is between three and five years.
