Investments
Market development
| Net investment income | ||||||
|---|---|---|---|---|---|---|
| in EUR million | 2012 | + / – previous year |
2011 | 2010 | 2009 | 2008 |
| Ordinary investment income1 | 1,088.4 | +12.7% | 966.2 | 880.5 | 810.5 | 829.8 |
| Result from participations in associated companies | 10.4 | +237.3% | 3.1 | 3.9 | (5.0) | 4.2 |
| Realised gains/losses | 227.5 | +26.7% | 179.6 | 162.0 | 113.0 | (113.6) |
| Appreciation | 2.7 | -92.7% | 36.8 | 27.2 | 20.1 | – |
| Impairments on investments2 | 21.7 | -29.8% | 31.0 | 23.8 | 142.5 | 480.4 |
| Unrealised gains/losses3 | 89.3 | (38.8) | (39.9) | 100.6 | (119.7) | |
| Investment expenses | 96.4 | +37.0% | 70.3 | 67.4 | 53.1 | 41.4 |
| Net investment income from assets under own management | 1,300.2 | +24.4% | 1,045.5 | 942.5 | 843.6 | 78.9 |
| Net investment income from funds withheld | 355.5 | +5.0% | 338.5 | 316.4 | 276.8 | 199.6 |
| Total investment income | 1,655.7 | +19.6% | 1,384.0 | 1,258.9 | 1,120.4 | 278.5 |
| 1 Excluding expenses on funds withheld and contract deposits 2 Including depreciation/impairments on real estate 3 Portfolio at fair value through profit or loss and trading |
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Capital markets in 2012 remained heavily under the shadow of the euro debt crisis and an expansionary monetary policy was again evident in our principal currency areas. The European Central Bank (ECB) further trimmed the key interest rate for the Eurozone in the middle of the year from 1.00% to its current level of 0.75%, while the US Federal Reserve (Fed) left the US dollar prime rate unchanged in the low range of 0.00% to 0.25%. Over the year US treasuries as well as German and UK government bonds experienced modest falls in yields in the maturity segments relevant to our company, while French government bonds saw more pronounced yield declines in some instances. The return on 10-year German government bonds, for example, fell to a historically low 1.16% as the year progressed and had rallied only slightly to 1.30% by year-end. This yield was facilitated not only by a monetary policy geared to a vigorous supply of liquidity, but also by the investor preference for government bonds of the highest quality. The government bonds issued by most European countries, which had come under increasing pressure in 2011 owing to the inadequate steps taken towards fiscal consolidation, posted gains in 2012. US treasuries also touched historic lows with yields of less than 1.4%. The United States continues to profit from the greenback’s status as the global reserve currency and the reputation of US treasuries as a safe haven investment. Risk premiums on European and US corporate bonds also decreased across all rating categories, sometimes appreciably so.
The picture on equity markets was a mixed one over the course of the year. Marked volatility and uncertainty once again characterised the market environment. After getting off to a bright start in the first three months, the DAX lost ground sharply in the second quarter against a backdrop of mounting economic concerns and worries about the stability of the Eurozone. In the second half of the year the DAX posted clear gains. The Dow Jones index significantly underperformed the DAX over the year as a whole.
Despite a period of softness around the middle of 2012, the euro ultimately closed largely unchanged year-on-year against the US dollar, pound sterling and the Canadian and Australian dollars.