8.2 Related party disclosures
8.2 Related party disclosures
IAS 24 “Related Party Disclosures” defines related parties as group entities of a common parent, associated entities, legal entities under the influence of key management personnel and the key management personnel of the entity itself. Transactions between Hannover Rück SE and its subsidiaries, which are to be regarded as related parties, were eliminated through consolidation and are therefore not discussed in the notes to the consolidated financial statement. In the year under review the following significant business relations existed with related parties.
HDI Haftpflichtverband der Deutschen Industrie V.a.G. (HDI) holds an unchanged majority interest of 50.22% in Hannover Rück SE through Talanx AG.
With effect from the 1997 financial year onwards all new business and renewals written on the German market have been the responsibility of E+S Rück AG, while Hannover Rück SE has handled foreign markets. Internal retrocession arrangements ensure that the percentage breakdown of the business applicable to the previously existing underwriting partnership is largely preserved between these companies. In November 2013 the responsible bodies of Hannover Rück SE and E+S Rück AG decided to reorganise the business relationship between the two companies with effect from 1 January 2014.
Within the contractually agreed framework Talanx Asset Management GmbH performs investment and asset management services for Hannover Rück SE and some of its subsidiaries. In the year under review changes were made to the billing method and fee arrangements for real estate and asset management of own-use property, including such own-use property with a leased portion. Assets in special funds are managed by Ampega Investment GmbH. Talanx Immobilien Management GmbH performs services for Hannover Re under a number of management contracts.
Companies belonging to the Talanx Group granted the Hannover Re Group insurance protection inter alia in the areas of public liability, building, group accident and business travel insurance. Divisions of Talanx AG also performed services for us in the areas of taxes and general administration.
The Hannover Re Group provides reinsurance protection for the HDI Group. To this extent, numerous underwriting business relations exist with related parties in Germany and abroad which are not included in Hannover Re’s consolidation. This includes business both assumed and ceded at usual market conditions.
Talanx Reinsurance Broker AG grants Hannover Rück SE and E+S Rückversicherung AG a preferential position as reinsurers of cedants within the Talanx Group. In addition, Hannover Rück SE and E+S Rück AG are able to participate in the protection covers on the retention of Group cedants and share in the protection afforded by them. In certain circumstances Hannover Rück SE and E+S Rück AG are obliged to assume unplaced shares of the reinsurance of Group cedants from Talanx Reinsurance Broker AG.
| Business assumed and ceded in Germany and abroad | ||||
| in EUR thousand | 2013 | 2012 | ||
|---|---|---|---|---|
| Premium | Underwriting result | Premium | Underwriting result | |
| Business assumed | ||||
| non-life reinsurance | 508,628 | 33,646 | 443,469 | 39,727 |
| Life and health reinsurance | 184,373 | 26,079 | 209,342 | 17,083 |
| 693,001 | 59,725 | 652,811 | 56,810 | |
| Business ceded | ||||
| Non-life reinsurance | (15,830) | (6,950) | (13,894) | 558 |
| Life and health reinsurance | (53,127) | (8,579) | (51,869) | (9,023) |
| (68,957) | (15,529) | (65,763) | (8,465) | |
| Total | 624,044 | 44,196 | 587,048 | 48,345 |
The reinsurance relationships with related parties in the year under review are shown with their total amounts in the table.
The Group companies E+S Rück AG, Hannover Finance (Luxembourg) S.A., Hannover Re (Ireland) Plc and Hannover Re (Bermuda) Ltd. invested in a nominal amount of altogether EUR 150.0 million in a bearer debenture of Talanx AG with a term until 8 July 2013 and a coupon of 5.43%. Talanx AG redeemed this bearer debenture in the first quarter of 2013. The redemption gave rise to realised gains on investments of EUR 2.8 million before tax for the Hannover Re Group. In the context of a new bond issue by Talanx AG the Group companies Hannover Rück SE and E+S Rück AG invested in a nominal amount of EUR 47.0 million in the issued bearer debt, which has a coupon of 3.125%. The carrying amount of the instrument, which is recognised under fixed-income securities held to maturity, was EUR 48.3 million including accrued interest of EUR 1.3 million.
Under long-term lease arrangements companies belonging to the Hannover Re Group rented out business premises in 2013 to Talanx Service AG, Hannover, which also entered into the existing lease agreements. In addition, lease agreements exist with Talanx Service AG for use of a portion of the space in our data-processing computer centre.
Furthermore, IT and management services were performed for Talanx Reinsurance Broker AG, Hannover, under service contracts.
Actuarial opinions with respect to the pension commitments given to staff are drawn up for Hannover Rück SE and E+S Rück AG by Talanx Pensionsmanagement AG and HDI Lebensversicherung AG under an actuarial service contract.
Since 2012 a service agreement has existed between Hannover Rück SE and Talanx AG regarding the purchase of services for operation of data acquisition software.
In October 2013 Hannover Rück SE concluded a service contract with Talanx Service AG in the area of flight services as well as a contract regarding the reciprocal provision of business continuity management services.
Remuneration and shareholdings of the management boards of the parent company
The remuneration of the Executive Board of Hannover Re amounted to altogether EUR 7.2 million (EUR 7.3 million). The total remuneration (excluding pension payments) of former members of the Executive Board and their surviving dependants stood at EUR 0.4 million (EUR 2.4 million). The pension payments to previous members of the Executive Board and their surviving dependants, for whom 14 (13) pension commitments existed, totalled EUR 1.4 million (EUR 1.4 million) in the year under review; altogether, a provision of EUR 21.4 million (EUR 22.5 million) has been set aside for these commitments.
The total remuneration of the Supervisory Board of Hannover Re amounted to EUR 0.9 million (EUR 0.9 million). There are no pension commitments to former members of the Supervisory Board or their surviving dependants.
The members of the governing bodies did not receive any advances or loans in the year under review. Nor were there any other reportable circumstances or contractual relationships as defined by IAS 24 between companies of the Hannover Re Group and the members of the governing bodies or their related parties in the year under review.
Furthermore, above and beyond the aforementioned remuneration as Supervisory Board members at Group companies, the members of the Supervisory Board were not in receipt of any remuneration or benefits for personally rendered services as defined by Item 5.4.6 Paragraph 3 of the German Corporate Governance Code.
All other information on the remuneration of the governing bodies, directors’ dealings and shareholdings as well as the structure of the remuneration system for the Executive Board is contained in the remuneration report. This remuneration report is based on the recommendations of the German Corporate Governance Code and contains information which also forms part of the notes to the 2013 consolidated financial statement as required by IAS 24 “Related Party Disclosures”. In addition, we took into account the more specific provisions of DRS 17 “Reporting on the Remuneration of Members of Governing Bodies”. Under German commercial law, too, this information includes data specified as mandatory for the notes (§ 314 HGB) and the management report (§ 315 HGB). These details are discussed as a whole in the remuneration report. Consequently, we have not provided any further explanation in the notes.