Bearing in mind the protracted low interest rate environment, we are thoroughly satisfied with the development of our total investments as at 31 December 2014. The portfolio of investments under own management stood at EUR 36.2 billion, a level comfortably higher than at the end of the previous year (31 December 2013: EUR 31.9 billion). The increase derived in large measure from the currency revaluation of our holdings in US dollars and pound sterling. Additional factors were the positive operating cash flow as well as a further increase in the hidden reserves for our fixed-income securities due to declining yields on government bonds in our main currency areas.

Despite the sustained low level of interest rates, ordinary investment income excluding interest on funds withheld and contract deposits came in at EUR 1,068.4 million, a slightly higher level than in the previous year (EUR 1,041.3 million). Interest on funds withheld and contract deposits improved to EUR 376.1 million (EUR 357.3 million).

Net realised gains on investments as at 31 December 2014 rose sharply to EUR 182.5 million (EUR 144.2 million), contrasting with negative fair value changes of -EUR 33.3 million (-EUR 27.1 million) in our financial assets measured at fair value through profit or loss. Write-downs were again taken in only a minimal volume in the year under review, the vast bulk of them being due to scheduled depreciation on real estate. Although conditions on financial markets remained challenging, income from assets under own management surpassed the previous year’s level to reach a pleasing EUR 1,095.8 million (EUR 1,054.5 million). The resulting annual return (excluding ModCo derivatives and inflation swaps) amounted to 3.3% (3.4%). It thus came in slightly higher than our anticipated figure of 3.2%; this was due to higher net realised gains in connection with the change in reporting currency at our Bermuda subsidiaries and the redemption of a bond issued in 2004. Steps taken to act on opportunities for realising gains in the real estate sector were also a positive factor here. Investment income including interest on funds withheld and contract deposits consequently increased to EUR 1,471.8 million (EUR 1,411.8 million), a gain of 4.3%.