Going forward, as in the past, we shall strive to be a reliable and sought-after business partner that offers its worldwide clients tailored and innovative reinsurance solutions. In so doing, we shall gear our activities towards our long-standing successful business model founded on the five pillars of conventional reinsurance, new markets, multinationals, bancassurance and financial solutions. Our business model enables us to meet individual customer requirements, on the one hand, while at the same time achieving excellent diversification of our international life and health reinsurance portfolio.

Worldwide demographic change, progressive globalisation and the continuous improvement in living standards in emerging countries are the key factors that will ensure life and health reinsurance remains a growing market. Insurers and reinsurers alike have accepted the challenge of giving fresh impetus to the constantly changing market requirements. The leading life and health reinsurers are faced with the difficult balancing act of satisfying both the value-added expectations of their shareholders and the needs of their clients.

The repercussions of the protracted sharp volatility on international financial and capital markets have also left their mark on the life insurance sector. The already established trend towards primary insurers making increased use of reinsurance as an equity substitute will continue in the coming year, opening up attractive business potential for our company as a financially strong reinsurer.

In our assessment, the greatest growth potential is offered by emerging markets such as China, India and Latin America. Yet we are also increasingly focusing on Russia and Arab markets, where we are optimally positioned thanks to our infrastructure, our “somewhat different” reinsurance concepts and – in the case of the Islamic markets – our successful Sharia-compliant reinsurance solutions. We are convinced that we can advance the development of these markets and further enlarge our business volume under the “new markets” pillar. Our leading technical expertise also opens up good prospects of enlarging our business with longevity risks.

In addition, the impending implementation of Solvency II is already casting its shadow. Set to enter into force in 2013, the new regime will compel European (re)insurers to satisfy more rigorous regulatory requirements and implement risk-based enterprise management and capital determination.

In the case of small to mid-sized insurers and mutual insurance companies, the increased capital requirement can be cost-effectively reduced through reinsurance; this is likely to further boost demand for reinsurance covers as an equity substitute. The advantages of group diversification enable us – also under the provisions of Solvency II – to offer our clients attractive reinsurance solutions.

In order to be optimally prepared for the implementation of Solvency II, we are engaged in a close dialogue with the Federal Financial Supervisory Authority (BaFin) and are currently working on an internal risk model that we are adjusting – taking our lead from the existing standard models, which tend to be more oriented towards primary insurers – to fit reinsurance-specific requirements. Beyond Europe’s borders, considerable efforts are presently being made to bring about regulatory equivalence between the regional supervisory systems of as many third countries as possible – including the United States, Bermuda, South Africa and Australia – and Solvency II.