OREANDA-NEWS. Talanx aims to take advantage of emerging signs of market hardening in major insurance markets and divisions. This is to further improve profitability while seizing opportunities for profitable growth. By consequence, the successful Balanced Book initiative is to be systematically continued in domestic Industrial Lines and carried over to foreign sub-portfolios as well. Accompanying this, the Industrial Lines Division is committed to achieving further growth with SMEs and mid-market clients. The Retail Germany Division is making impressive headway in its KuRS strategic programme while selectively using a portion of its above-target savings to further accelerate the pace of its modernisation and digitalisation initiative. Total savings from 2015 to 2017 exceeded the original plan by more than EUR 100 million. The rapid pace of organic growth in the international retail business – with annual premium growth of roughly 10 percent targeted by 2020 at a combined ratio of around 96 percent – should make a substantial contribution to increasing the foreign premium share in Primary Insurance from just above one half of late to roughly two thirds on a long-term basis.

Our strategy since our IPO is proving successful, as evidenced by the operational improvement achieved in recent years. Accordingly, we will continue to pursue our strategic agenda; at the same time, however, we will also remain receptive to new aspects”, says Herbert K. Haas, Chairman of the Board of Management of Talanx AG. An integral component is the systematic digitalisation and modernisation of the business model, to which end Talanx will be presenting a number of implementation measures at its Capital Markets Day. Also on the agenda is the further enhancement of the cash-generating capacity of the Primary Insurance divisions. They already account for roughly 55 percent of cash inflow to the holding company for the period 2012-2017 before holding and financing costs. After dividend payments, Talanx AG used around one-half billion euros for its internal financing and for building up its cash pool while at the same time reducing the leverage. The pool of liquidity currently covers roughly one annual dividend and is targeted to be increased to 1.5-2 annual dividends.

On the basis of three extreme scenarios – Italy’s exit from the eurozone, a global pandemic and a series of earthquakes in New Madrid/US – the Talanx Group has modeled its resilience to extreme risks of this type. The results show that it would well withstand these losses (far exceeding the large losses in 2017). In all three scenarios, the Solvency II ratios would decline, but remain robust.

This resilience is also reinforced by further risk reduction in the German Life insurance business. Risk-weighted across all German risk carriers in life insurance, the Solvency II Ratio before transitional measures as at 30 June 2017 significantly improved to 162 percent (December 2016: 116 percent).