Annual Report 2009
DEVK Deutsche Eisenbahn VersicherungSach- und HUK-Versicherungsverein a.G.Betriebliche Sozialeinrichtung der Deutschen Bahn
DEVK Rückversicherungs- und Beteiligungs-Aktiengesellschaft
DEVK Allgemeine Versicherungs-Aktiengesellschaft
DEVK Deutsche Eisenbahn VersicherungSach- und HUK-Versicherungsverein a.G.Betriebliche Sozialeinrichtung der Deutschen Bahn Group
Year
1948/49
1954
1960
1965
1970
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Motor
–
–
24
196
293
509
568
625
669
699
715
710
720
740
760
782
810
845
883
923
959
1,269
1,333
1,437
1,518
1,635
1,775
1,872
1,940
1,971
1,978
2,013
2,060
2,107
2,193
2,235
2,282
2,293
2,465
2,617
Liability
–
242
532
651
752
913
937
947
912
926
937
954
961
969
972
992
1,009
1,019
1,033
1,049
1,115
1,183
1,259
1,314
1,353
1,388
1,439
1,467
1,498
1,514
1,530
1,535
1,544
1,554
1,572
1,584
1,604
1,616
1,634
1,658
Legal expenses
–
–
–
–
–
–
–
–
–
–
2
65
85
101
123
141
161
183
204
223
245
278
309
346
377
403
433
457
480
504
530
550
575
596
621
650
678
702
724
754
Accident1)
–
37
83
94
128
201
215
231
249
276
304
306
326
340
356
369
380
394
412
434
453
490
518
547
569
585
861
879
886
880
872
864
868
877
879
889
912
950
988
1,022
Health2)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
31
158
252
362
457
515
581
630
685
717
747
777
826
885
967
1,041
Non-life
283
450
558
629
700
819
852
882
912
948
1,003
1,052
1,084
1,135
1,182
1,227
1,292
1,370
1,476
1,569
1,632
1,740
1,880
1,988
2,072
2,155
2,228
2,289
2,333
2,370
2,406
2,435
2,480
2,527
2,562
2,586
2,612
2,636
2,673
2,730
Premiums(in € m)
0,6
1,7
7,3
23,6
47,0
130,8
151,5
182,3
203,6
233,6
244,6
262,0
277,2
298,6
321,7
351,7
371,0
404,7
449,4
488,6
517,2
592,9
663,7
753,2
877,7
953,3
981,9
1,019,3
1,041,9
1,065,1
1,111,6
1,158,2
1,222,1
1,273,1
1,329,6
1,349,1
1,363,5
1,383,6
1,394,2
1,566,2
in Sach-/HUKR- and health insurance division of DEVK Versicherungen
Portlio (in ´000s.)
Business performance 1948/49 to 2009
1) as of 1996 incl. motor – accident2) No. of policyholders
DEVK
Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G.Betriebliche Sozialeinrichtung der Deutschen Bahn Group
Group management report 94Consolidated financial statements 112Cash flow statement 120Statement of shareholders’ equity 121Explanatory notes to consolidated financial statement 122Independent auditor’s report 135Supervisory Board report 136
Addresses and management 90Organizational chart of DEVK Versicherungen 91
DEVK
Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G.Betriebliche Sozialeinrichtung der Deutschen Bahn
Company bodies 6Management report 9Financial statements 20Annex 24Independent auditor’s report 36Supervisory Board report 37
Financial Year 2009
DEVK
Rückversicherungs- und Beteiligungs-Aktiengesellschaft
DEVK
Allgemeine Versicherungs-Aktiengesellschaft
Company bodies 38Management report 39Financial statements 48Annex 52Independent auditor’s report 61Supervisory Board report 62
Company bodies 63Management report 65Financial statements 76Annex 80Independent auditor’s report 92Supervisory Board report 93
ABSAGAGGAktGAltZertGa.ment.ann.approx.a.s.i.BaFinbnBGHBMFca.DAVDAXDCFdefi n.DrDRSEECe.g. EStGetc.fem.f.o.a.GDVGmbHHGBi.c.w.IDWIf nec.incl.i.ret.ITKonTraGKWGLAGmm.max.mon.Mot. veh.mut.No.NRWn.v.o.o.p.a.Para.Profp.s.g.p.s.n.PublGRechVersVreg. assoc.RPRresp.ret.’000sVAGVVaGVVGWpHGWSG
Asset Backed SecuritiesAktiengesellschaft (German public limited company)German Anti-Discrimination Act (AGG)German Companies Act (AktG)German Pension Contracts Certifi cation ActAbove listedAnnuallyApproximatelyAs specifi ed inGerman Financial Supervisory Authority (BaFin)Billion (s)German Federal Court of JusticeGerman Federal Finance MinisterCircaAssociation of German Actuaries (DAV)Deutscher Aktienindex (German stock market index)Discounted Cash FlowDefi nitiveDoctorGerman accounting standards (DRS)European Economic Community Exempli gratia (for example) German Income Tax Act (EStG)Et ceteraFemaleFor own accountGerman Insurance Association (GDV) German private limited company (GmbH)German Commercial Code (HGB)In conjunction withInstitute of German Public Accountants – IDWIf necessaryIncludingIn retirementInformation TechnologyGerman Control and Transparency in Business Act (KonTraG)German Banking Act (KWG)State labour courtMillion (s)MaleMaximumMonthlyMotor vehicleMutualNumberNorth Rhine-WestphaliaNew versionIn our opinionPer annumParagraphProfessorPay-scale group (s)Pay-scale numberGerman Company Disclosure Act (PublG)German Insurance Company Accounting Regulation (RechVersV)Registered associationReserve for premium refund (RfB) RespectivelyRetired ThousandGerman Law on the Supervision of Insurance Undertakings (VAG)Mutual benefi t society (VVaG)German Insurance Contract Act (VVG)German Securities Trading Act (WpHG)German Law for the Strengthening of Competition in Legal Health Insurance (WSG)
Abbreviations
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Company bodies
Board of Members
Wolfgang AßheurerDortmund
Heinz BodammerFriedrichshafen
Peter BolsingerRosbach
Jörgen BoßeLoddin
Steffen BoseckerDresden
Jürgen BrügmannEssen
Holger ConradLeetza
Gabriele DenglerMainz
Helmut DienerMarktredwitz
Hans-Jürgen DorneauOerlinghausen
Gerhard EhrentrautAugsburg
Heinz FuhrmannNeu-Anspach
Johann GebhardtMarkt Erlbach
Franz-Josef GroßKindsbach
Claus-Dieter HaasEttlingen
Dieter HäfkeDuisburg
Rolf HellmannLustadt
Frank HelmsBad Salzungen
Jörg HenselHamm
Helmut HeutzErkelenz
Berthold HillebrandKassel
Jürgen HoffmannHerten
Ralf IngwersenHamburg
Jessica IrleFrankfurt am Main
Klaus JustForst Lausitz
Hans-Joachim KernchenBerlin
Axel KleichLeipzig
Heinrich KlumpeWallenhorst
Hanka KnocheIdstein
Dr Siegfried KrauseBerlin
Axel KrollLanggöns
Manfred LeuthelNürnberg
Bernd MadernerNiefern-Öschelbronn
Uwe MatthiasBremervörde
Heinz-Werner MildeGronau Hans-Joachim MöllerAschersleben
Dr med. Helmut MüllerMünster
Wolfgang MüllerGau-Bischofsheim
Marlies PellnyDüsseldorf
Dieter PielhopWietzen
Beate RacheNeu Wulmstorf
Christian RespondekMünster
Ernst RichardtRonshausen
Uwe RosenbergerHagen
Hartmut SchaeferLutherstadt Eisleben
Gerfried ScholtzFrankfurt am Main
Alfred SchumannBiebertal
Jens SchwarzChemnitz
Heino SeegerHausham
Albert SpieglEichenau
Winfried ThubauvilleLeichlingen
Peter TrögeEngstingen
Peter WeinzierlKolbermoor
Richard WeisserPuschendorf
Bernd WernsdörferWürzburg
Thorsten WeskeGermersheim
Torsten WestphalMagdeburg
Albert WiegandFulda
Otto WilhelmPenzberg
Joachim ZiekauDahlem
76
Friedrich Wilhelm GieselerBergisch GladbachChairman
Engelbert FaßbenderHürth
Michael KlassCologne
Gottfried RüßmannCologne
Hans-Otto UmlandtOesterdeichstrich
Bernd ZensKönigswinter
Supervisory Board
Management Board
Lothar KraußRodenbachChairmanManaging Director of Vermögensverwaltung GmbH of TRANSNET Gewerkschaft GdED(until 05 June 2009)
Alexander KirchnerRunkelChairmanChairman of TRANSNET Gewerkschaft GdED [Union of German Railwaymen)(as of 05 June 2009)
Günter KirchheimEssenFirst Deputy ChairmanChairman of Group Works Council Deutsche Bahn AGChairman of European Works CouncilDeutsche Bahn AGChairman of the General Works Council DB Netz AG (Network)
Helmut Petermann *EssenSecond Deputy ChairmanChairman of the General Works Council DEVK Versicherungen
Dr rer. nat. Norbert Bensel (Doctor of Science)Berlin
Christian BormannWeimarChairman of Works Council DB Netz AG, Wahlbetrieb ErfurtMember of the General Works CouncilDB Netz AG (Network)
Udo Fels *WarendorfEmployed by DEVK Versicherungen (i.ret.)(until 31 January 2010)
Doris Fohrn *WesselingDeputy Chairperson of Works Council for DEVK Versicherungen, Cologne Headquarters
Ralf Gajewski *BerlinDeputy Group Head of KKC (Customer Competence Centre) DEVK Versicherungen,Regional Management Unit, Berlin
Dr Rüdiger GrubeGechingenCEO Deutsche Bahn AGCEO DB Mobility Logistics AG(as of 22 July 2009)
Horst HartkornHamburgChairman of the Works Council, S-Bahn Hamburg GmbH
Marlies HellingFrankfurt am MainManaging Director of Human Resources UnitDB Bahnbau GmbH (i.ret.) (Rail Construction)(until 05 June 2009)
Klaus-Dieter HommelFrankfurt am MainFederal Chairman of the GDBA (German Transport Trade Union)
Dr Hartmut MehdornBerlin(until 05 June 2009)
Jürgen PutschkunFellbachExecutive Offi cer Motor Vehicle Operations and Sach/HU-Betrieb DEVK Versicherungen, Regional Management Unit, Stuttgart(as of 01 February 2010)
Dr Karl-Friedrich RauschWeiterstadtMember of DB Mobility Logistics AG Management Board with responsibility for Transport and Logistics Unit
Thomas RennerKarlsruheChairman of Management Board Sparda-Bank Baden-Württemberg eG(as of 05 June 2009)
Margret SuckaleHamburgHead of Central Unit Global Human Resources BASF(until 05 June 2009)
Andrea Tesch *ZittowDeputy Group Head Sach-/HU-Betrieb and Head of SHU Unit, DEVK Versicherungen, Regional Management Unit, Schwerin
Ulrich WeberKrefeldMember of Deutsche Bahn AG Management Board with responsibility for Personnel UnitMember of DB Mobility Logistics AG Management Board with responsibility for Personnel Unit(as of 22 July 2009)
* Employees’ representative
Advisory Board
Rudi SchäferBergisch Gladbach– Honorary Chairman –Chairman of the German Railway Workers’ Union (ret.)
Kay Uwe ArneckeHamburgManagement Spokesman of S-Bahn Hamburg and Head of the Northern Region of DB-Bahn Stadtverkehr GmbH
Werner BayreutherHeroldsbergLawyerManaging Director of German Employers’ Association of Mobility and Transport Service Providers reg. assoc., Berlin
Gerd BechtBad HomburgMember of Management Boards of Deutsche Bahn AG and DB Mobility Logistics AG responsible for Compliance, Data Protection and Legal Affairs
Prof Dr Rainer FreiseFriedrichsdorfManagement Member of DVA Deutsche Verkehrs-Assekuranz-Vermittlungs-GmbH and Head of DB AG insurancePresident of the International Railway Trans-portation Committee (CIT)
Michael HartingBornheimMinisterial Director in the Federal Ministry of Transport, Building and Urban developmentHead of the Rural Transportation Department
Thomas HupfeldVellmarDeputy Regional Chairman of the Trade Union of German Railroad Engineers, Frankfurt Region
Dr Volker KeferErlangenManagement Board member of Deutsche Bahn AG responsible for Technology, System Network and Services
Bernhard KesselMunichChairman of Partial General Works Council (Track) Veolia Verkehr GmbH
Volker KöhlerNürnbergChairman of the Management Board for Sparda-Bank Nürnberg eG
Volker KrombholzNeustrelitzDeputy Regional Chairman of the Trade Union of German Railroad Engineers, Northern Region
Armin LauerRödermarkManaging Director of Vermögensverwaltung GmbH der TRANSNET Gewerkschaft GdED
Rolf LutzkeBerlinHead of Policy and International Affairs TRANSNET Gewerkschaft GdED (Union of German Railwaymen)
Reiner MetzNideggenLawyerManaging Director of Local Public Transport Unit of the Association of German Transport Undertakings (VDV) (reg. assoc.)
Heike MollMunichChairman of the General Works Council DB Station & Service AG
Beate MüllerHeidelbergHead of South-West Offi ce of Bundeseisenbahnvermögen (special authority administered by the German Federal Ministry of Transport)
Ottmar NetzHohenahrManaging Director of Human Resources DB Vertrieb GmbH
Günther von NiebelschützGroßen-LindenDivision President in Bundeseisenbahnvermögen
Jürgen NiemannBerlinManaging Director of Human Resources DB Dienstleistungen GmbH
Marie-Theres NonnErftstadtPresident of Bundeseisenbahnvermögen
Ragnar NordströmBerlinCEO Veolia Verkehr GmbH
Ute PlambeckHamburgAuthorised Representative in the Group for the States of Hamburg and Schleswig-Holstein Deutsche Bahn AG
Alfred PossinBerlin
Bernhard ReinhartMunichManaging Director of Management Board ebm eisenbahner baugenossenschaft münchen-Hauptbahnhof eG
Peter RotheNiederlehmeHead of Human Resources Unit DB Netz AG, Neustrelitz/Schwerin
Wolfgang SchillingBonnDepartmental President in Bundeseisenbahnvermögen
Klaus-Peter SchölzkeGörlitzDeputy Chairman of the Trade Union of German Railroad Engineers, Berlin/Saxony/Brandenburg Region
Olaf Schulz-ArimondDüsseldorfDeputy Regional Chairman of the Trade Union of German Railroad Engineers, North Rhine-Westphalia Region
Ralf SkrzipietzMönchengladbachLawyer
Rolf StadiéBochumManagement Member of Knappschaft
Klaus VögeleEttenheimChairman of General Works Council Schenker AG
Franz-Georg WolpertStuttgartPresident of the German Automobile Club (ACV) Ministerial Council (ret.)
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Company bodies
9
Management report
Commercial environment and general conditions
Overview
DEVK Sach- und HUK-Versicherungsverein a.G. is a self-help organisation for railwaymen and is recognised as a commercial welfare institution by Deutsche Bahn and the Bundes-eisenbahnvermögen. It offers its members, generally railwaymen and employees from the expanded transport unit, comprehensive, bespoke and low-priced insurance coverage.
As a property & casualty insurer with a high proportion of motor vehicle business, our insurance society was hit particularly hard by the ongoing and prolonged price war in the motor vehicle insurance business in 2009.
On the property side, the industry saw only a slight increase in expenses. A storm balance which had improved in comparison with the previous year had a positive effect.
Government assistance programmes initiated in the course of the fi nancial crisis led to an economic upturn and the start of economic recovery. This manifested itself on the global capital markets, with most showing signifi cant gains. On the bond markets, risk premiums on securities and investments tightened again. The DAX rose by 23.9 % over the course of the year and stood at 5,957.4 points at the close of the year.
In view of this business environment, the business results for FY 2009 can be considered satisfactory. Society members and policyholders will once again benefi t from our com-mercial success in the form of additions to the reserve for premium refund this year. In the present instance, additions were made to the general casualty and householders’ comprehensive insurance.
Ratings
The ratings awarded by Standard & Poor’s for the fi rst time in 2008 were reconfi rmed in 2009. As in 2008, DEVK Sach- und HUK-Versicherungsverein a.G., DEVK Allgemeine Versicherungs-AG, DEVK Allgemeine Lebensversicherungs-AG and DEVK Rückversiche-rungs- und Beteiligungs-AG were given an “A+” rating. Standard & Poor’s considered the business outlook to be “stable”. On balance, therefore, this is confi rmation of the very good fi nancial strength of the DEVK companies.
Once again, DEVK Sach- und HUK-Versicherungsverein a.G. and DEVK Allgemeine Ver-sicherungs-AG were given an outstanding rating by the ASSEKURATA Assekuranz rating agency. As in the previous ten years, both companies were awarded the highest rating “A++” (excellent) in February 2010.
Customer satisfaction
A number of surveys, e.g. those conducted by ASSEKURATA or TÜV Saarland, attest to DEVK’s high customer satisfaction. The customer and claimant survey conducted by Cologne-based institution MSR Consulting also came to this conclusion. The past years’ survey values, which were already good, were further improved on in 2009, with the result that the non-life insurance unit now also occupies a best practice spot alongside
8
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Management report
the casualty division. The liability unit just missed out on this top ranking. In terms of third-party insurance, DEVK’s customer evaluation is also signifi cantly higher than the market average.
All of these external appraisals refl ect our company’s highly competitive position.
Social responsibility
Being a successful insurer, DEVK is aware of its social responsibility. For several years, it has been training an above-average number of trainees compared to the sector as a whole, both for internal services and for marketing. This gives young people a good start in their professional careers and permits them to integrate well within society.
In 2009, DEVK, as an offi cial training company, again received special recognition from Cologne’s chamber of trade and commerce due to outstanding vocational training performance.
Since 2005, several of DEVK’s sites have taken part in the competition hosted by Deutsche Bahn AG, “Railway trainees against hatred and violence”. As a result of this, trainees are sensitised towards this topic and the public is addressed through a variety of concrete campaigns.
DEVK’s active social commitment is refl ected in several external reviews. Besides good performance in the “Germany’s Best Employer” competition, a particularly noteworthy achievement is the “Arbeit Plus” seal of honour, which the Protestant Church in Ger many (EKD) has awarded to DEVK several times for its social- and employment-oriented per-sonnel policies.
Personnel and sales representative trends
Joint/service contracts mean that people employed by DEVK Sach- und HUK-Versiche-rungs verein also work for its subsidiary companies. Employment both at DEVK Sach- und HUK-Versicherungsverein and for DEVK Lebensversicherungsverein falls within the ambit of “dual employment contracts” (Doppelarbeitsverträgen). As such there are no services rendered between the two companies.
On average in 2009, the company employed 2,735 members of staff internally, of which 2,497 had their contracts of employment with DEVK Sach- und HUK-Versicherungs-verein. This fi gure does not include any inactive work contracts; part-time employees were converted into full-time equivalents according to their working hours.
At the end of the year, 2,037 self-employed representatives (previous year 2,032) were engaged on behalf of DEVK. Furthermore, there were 650 sales representatives directly employed by DEVK Sach- und HUK-Versicherungsverein (previous year 630). However, the entire sales force is also active on behalf of the other DEVK companies. To this end, DEVK Sach- und HUK-Versicherungsverein has signed general agency agreements with the other DEVK companies.
1110
Business performance in general
Booked gross premiums increased by 0.2 % y-o-y to € 291.7 m. Contrary to our expecta-tions, income reductions in motor vehicle insurance, which remains fi ercely contested, were compensated by other lines of business.
Earned premiums for own account amounted to € 246.7 m (previous year € 247.9 m). The expenses for insurance claims for own account increased by 5.3 % to € 175.4 m. Their share of the net earned premiums therefore increased to 71.1 % (previous year 67.2 %). The ratio of expenses for the insurance business for own account to the earned premiums for own account was 26.4 % (previous year 23.8 %).
As forecast the previous year, a signifi cantly higher amount, € 9.6 m, was withdrawn from the equalisation reserve than in the previous year (€ 6.2 m). Due to the increase in net expenses for claims and costs, the underwriting result for own account fell to € 9.3 m (previous year € 22.2 m).
The investment income was substantially improved in comparison with the previous year. This was particularly attributable to signifi cantly lower write-down requirements. Due to the fi nancial market crisis, this was particularly high during the previous year.
After a remaining non-technical result on a par with the previous year, profi t on ordinary activities amounted to € 57.7 m (previous year € 41.5 m). Due to a decline in tax expense to € 15.0 m, net profi t for the year increased to € 42.7 m (previous year € 24.8 m).
Business performance in the individual lines of business
The insurance lines run by DEVK Sach und HUK-Versicherungsverein in business it con-cluded itself in 2009 are detailed in the notes to the management report. The following section describes the business performance in the individual insurance groups, lines of business and types.
Casualty insurance
Under this item, we report both general casualty insurance and motor vehicle accident in-surance. The decline in the number of policies by 2,348 in casualty insurance to 258,106 pol-icies resulted almost exclusively from motor vehicle accident insurance. Gross premiums grew by € 1.0 m to € 37.0 m. Following an addition to the reserve for premium refunds amounting to € 2.5 m (previous year € 2.1 m), the underwriting result fell to € 1.3 m (previous year € 5.4 m).
Liability insurance
The overall liability insurance portfolio covered 601,856 policies (previous year 608,078) at the end of the year. This included 94,244 employee’s liability insurance policies (incl. railwaymen professional liability insurance). Gross premiums were up 4.8 % y-o-y to € 34.8 m in 2009. Following an addition to the equalisation reserve amounting to € 2.7 m (previous year € 0.6 m), the underwriting result for own account stood at € 7.4 m (previ-ous year € 8.2 m).
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Management report
Motor vehicle liability insurance
As of 31 December 2009, the motor vehicle liability insurance line of business had 534,684 policies (previous year 528,277). In addition to this, there were 9,855 moped policies. Gross premiums fell by 3.7 % to € 80.0 m due to the prolonged price war. Fol-lowing a withdrawal from the equalisation reserve of € 4.2 m, the underwriting result amounted to € – 3.2 m (previous year € 1.5 m).
Other motor vehicle insurance
We pool the comprehensive and partial comprehensive (third-party, fi re and theft) motor insurance together under other motor vehicle insurance business. At the end of the year, the number of risks was 438,651 (previous year 426,977). Besides this, we counted 1,749 partial coverage insurance policies for mopeds. The gross premiums were 2.1 % lower at € 58.3 m. Following a withdrawal from the equalisation reserve of € 11.7 m (previous year € 8.5 m), the result amounted to € – 0.9 m (previous year € 0.9 m).
Fire and non-life insurance
The portfolio of fi re and non-life insurance at the end of 2009 covered a total of 982,074 policies (previous year 977,516). Gross premiums increased by 3.0 % to € 80.3 m. The underwriting result amounted to € 4.7 m (previous year € 5.7 m).
In detail, the performance in fi re and non-life insurance breaks down as follows:At the end of the year, the portfolio of house owners’ comprehensive insurance covered 445,300 policies (previous year 448,487). Gross premiums increased by 0.3 % to € 32.2 m. € 2.5 m were added to the reserve for premium refund (previous year € 1.0 m). The underwriting result decreased to € 3.5 m (previous year € 5.9 m).
The building insurance portfolio increased to a total of 168,652 policies (previous year 165,637). Gross premiums increased by 4.7 % to € 31.1 m. Following an addition to the equalisation reserve amounting to € 2.1 m (previous year € 0.9 m addition) the under-writing result for own account, at € – 1.4 m, was roughly on par with the previous year (€ – 1.2 m).
The portfolio contained 368,122 policies in the other lines of fi re and non-life insurance at the end of the year (previous year 363,392). The premium income amounted to € 16.9 m (previous year € 16.1 m). The underwriting result for own account amounted to € 2.6 m (previous year € 1.0 m).
Other insurance policies
The results for cheque card, breakdown service and travel health insurance are essentially pooled together under other insurance business. Gross premiums increased by 4.7 % to € 1.3 m. Following an addition to the equalisation reserve in breakdown service insurance, underwriting reported an almost balanced result at € – 0.1 m (previous year € 0.5 m).
1312
Reinsurance
The business ceded to reinsurance was distributed between several external reinsurers and our group’s own reinsurer, DEVK Rückversicherungs- und Beteiligungs-AG. Our selec-tion of the reinsurers took account of their ratings.
Investment and net investment income
As anticipated, 2009’s investment result was better y-o-y; this was essentially due to lower write-down and higher addition requirements.
In the year under review, the investment portfolio increased by 0.9 % to € 1,350.9 m (previous year € 1,338.9 m). There were no signifi cant material changes in the composi-tion of the investment portfolio.
The income from investments at € 66.2 m was higher than in the preceding year (€ 63.8 m). This includes a dividend payment from DEVK Rückversicherungs- und Beteili-gungs-AG amounting to € 15.0 m (previous year € 10.0). Besides this, earnings were booked from the divestment of investments worth € 3.9 m (previous year € 15.5 m) and proceeds from additions worth € 9.8 m (previous year € 0.4 m).
Investment expenses were far lower than the previous year at € 9.7 m (€ 36.4 m). This was largely due to lower write-down requirements (€ 7.6 m after € 32.9 m the previous year). Losses from the divestment of investments fell to € 0.3 m (previous year € 1.6 m).
On balance, net investment income was far higher than last year at € 56.5 m (pre vious year € 27.4 m).
Operating result and allocation of retained earnings
The net profi t for the year after tax of € 42.7 m (previous year € 24.8 m) was added to other retained earnings.
Affi liated companies, participations
DEVK Sach- und HUK-Versicherungsverein and DEVK Lebensversicherungsverein are not affi liated companies as defi ned by Section 271 Para. 2 of the German Commercial Code (HGB).
Details about our company’s direct and indirect shareholdings in affi liated companies and participations can be found in the notes.
Functional delegation, organisational co-operation
As a result of the general agency agreements signed with other DEVK insurance compa-nies, our company assumes uniform responsibility for insurance brokerage operations and the associated duties for DEVK.
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Management report
The general operational areas of accountancy, collection, IT, asset management, person-nel, auditing and general administration are centrally organised for all DEVK companies. With regard to the group’s insurance companies, this also applies to the areas of portfolio management and claims management (excl. DEVK Rechtsschutz-Versicherungs-AG). How ever, each company has separate leasing agreements and has its own inventory and own work equipment based on its own usage.
In accordance with the joint/service contracts, we provide the necessary internal staff to group companies DEVK Rückversicherungs- und Beteiligungs-AG, DEVK Allgemeine Versicherungs-AG, DEVK Rechtsschutz-Versicherungs-AG, DEVK Krankenversicherungs-AG, DEVK Allgemeine Lebensversicherungs-AG, DEVK Pensionsfonds-AG, DEVK Vermö-gensvorsorge- und Beteiligungs-AG and DEVK Service GmbH and many smaller group companies.
Opportunities and risks of future developments
In accordance with the German Control and Transparency in Business Act (KonTraG), and the minimum risk management requirements laid down in Sec. 64a of the German Act on the Supervision of Insurance Companies (VAG), we now report the opportunities and risks presented by future developments.
Within the DEVK Group, a risk management system is employed to identify and assess risks at an early stage. This is based on a risk-bearing capacity concept, which guarantees adequate coverage of all signifi cant risks via the company’s own funds. DEVK has installed a consistent system of limits to limit risks. The limit capacity is portrayed in the form of risk ratios. The risk ratios break the risk limits set in the risk strategy down to DEVK’s most important organisational areas. A comprehensive risk inventory is addition ally com-plied every six months. The risks are recorded and classifi ed according to type using a questionnaire. The risks are quantifi ed as far as possible. The actions required to manage the risks are recorded. Using this system, we can react immediately and appropriately to developments that represent a risk to the group. The effectiveness and suitability of this system are monitored by the Internal Auditing unit.
DEVK’s risk management organisation is both centralised and decentralised. The risk responsibility in the specialist units is defi ned as the decentralised risk management sys-tem. The persons in charge of the units and processes are in charge of and responsible for the management of risk in their specifi c operational areas. Central risk management is undertaken by the independent risk controlling function. This is responsible for dealing with the cross-departmental risks and for the conceptual development and maintenance of the company-wide risk management system. It co-ordinates the company’s risk man-agement functions and supports the risk owners in the specialist units.
Once the risk assessment has been examined, the major risks identifi ed are described in the so-called risk situation report, with a breakdown for every company, and are reported to the risk committee and each of the respective Members of the Management Board. The risk report and the risk control process (identifi cation, analysis, evaluation, manage-
1514
ment and monitoring) are updated every six months. The risk committee and the Mem-bers of the Management Board are the report’s recipients.
Underwriting risks
Specifi c underwriting risks include the premiums/ claims risk and the reserves risk.
In line with appropriate assumption guidelines, we regularly underwrite only straightfor-ward, standardised business. We counteract the risk of particularly high claims expenses resulting from extraordinary loss events with a corresponding reinsurance policy.
Our planning and management instruments permit us to identify undesirable, or hazard-ous operational, portfolio and claims trends at an early stage and take action to counter-act them if required.
We adequately size our underwriting reserves by cautiously evaluating the losses already reported, and by accruing additional reserves for losses that are statistically likely, but that have not yet been reported on the balance sheet date and for losses that will have to be re-opened after the balance sheet date. In addition, equalisation reserves are accrued in accordance with the calculations stipulated by commercial law.
Investment risks
The risks stemming from investments comprise:– the risk of unfavourable interest rate, equity market or exchange rate trends (market price risks),– the non-payment risk (reliability risk),– the risk of extensively correlated risks, which increases the risk of default (concentration risk) and– the liquidity risk, i.e., the risk of not being able to meet payment obligations at all times.
In the area of investments, we have observed the German Ordinance on the Investment of Restricted Assets of Insurance Undertakings (AnlV). We counteract the equity market and interest rate risks by creating a balanced mix of different types of investment. Through active portfolio management, we are able to utilise opportunities arising from market movements to positively impact our results. Furthermore, we limit the reliability risk and the concentration risk by adopting very stringent rating requirements and by continually monitoring the issuers we select, resulting in the absence of potentially ruinous depen-dencies on individual debtors. A permanent infl ux of liquidity is ensured by endowing the investments in debt instruments with a balanced maturity structure. If the economic recovery achieved as a result of state support programmes and expansive central bank policies fails to lead to a viable upswing due to the now tense state fi nancial situation, there is a risk of returning to a recessionary scenario with extensively defl ationary trends and correspondingly negative effects on the capital markets. Equity exposure is therefore at a moderate level. The equity investments are subjected to a portfolio insurance con-cept that limits share price risks. In case of extreme infl ation or defl ation as a result of economic trends, action options are in place.
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Management report
On the whole, the effects of the fi nancial crisis have remained manageable, as we have consciously avoided structured products with loan risks (asset backed securities, collater-alised debt obligations, collateralised loan obligations) issued in 2007 and 2008. The ABS in our direct portfolio are essentially European ABS with top ratings.
Our investment is focussed on German issuers with high creditworthiness, precluding Anglo-Saxon banks from causing any exposure. Investment commitment in the countries currently in the public eye – Portugal, Italy, Ireland, Greece and Spain – is minimal. In terms of issuer risks in ratio to total investments, 3.7 % of Sach-HUK-Versicherungsverein’s interest-bearing investments are in securities, 1.9 % in corporate bonds and 22.8 % in bank securities. For the most part, investments in banks are subject to the various legal and private deposit insurance systems or involve interest-bearing securities with special guarantee funds by force of law.
On balance, interest-bearing investments in fi xed assets in accordance with Section 341b of the German Commercial Code (HGB) reveal a positive valuation reserve of € 2.3 m. Fixed asset equities and equity funds reveal a positive valuation reserve of € 3.7 m. These do not contain any hidden liabilities.
In accordance with the BaFin Circular 1/2004 (VA), we have to subject our portfolio of in-vestments a stress test. This we did at the balance sheet date 31 December 2009 using the BaFin-specifi ed modifi ed stress test model from the German Insurance Association (GDV). All of the scenarios were passed successfully. The stress test verifi es whether the insurance undertaking would be in a position to meet the obligations it has entered into with regard to its policyholders even if the capital markets were to be subject to a prolonged crisis. The stress test simulates a temporary, adverse change on the capital markets and examines the impact on the insurance undertaking’s accounts. The target horizon is the next balance sheet date. The stress test assumes the following scenarios: 1) there is a negative trend on the equity market, while the bond market remains stable, 2) there is a negative trend on the bond market while the equity market remains stable, 3) there is a simultaneous crash on the equity and bond markets, 4) there is a simulta-neous crash on the equity market and real estate market.
Operational opportunities and risks
Operational risks stem from inadequate or abortive operational processes, the failure of technical systems, external variables, employee-related incidents and changes in the legal environment. The half-yearly risk inventory concentrates specifi cally on operational risks.
DEVK’s working procedures are performed based on internal guidelines. The risk of em-ployee-related incidents is limited by authorisation and proxy regulations as well as by the provision of generally automatic support for the working procedures. The effectiveness and functional capability of this system are monitored by the Internal Auditing unit.
17
Comprehensive access controls and preventative precautions have been taken in the area of IT, which ensure the security and integrity of programmes, data and ongoing operations. The link between internal and external networks is accordingly protected by state-of-the-art systems.
Based on a corporate contingency analysis, a contingency management guideline describing emergency prevention objectives and boundary conditions plus measures for overcoming these was drawn up.
Solvency
The premium and loss index suggests that the company’s own funds (which are to be certifi ed in accordance with Section 53c of the German Law on the Supervision of Insurance Undertakings (VAG) to ensure the liabilities under the insurance contracts can be met at all times) provide a very high level of excess cover.
Cash fl ow
In the current fi nancial year, the cash fl ow from investments, i.e., the funds required for the net investment volume, came to € 23.4 m. The funds required for this were essen-tially generated from the company’s ongoing operations (€ 23.1 m). Free funds totalling € 0.3 m were invested.
Summary of risk situation
There is currently no trend evident that could lead to a signifi cant impairment of our asso-ciation’s situation with regard to its assets, fi nancial standing or earnings position.
Supplementary report
After the reporting date, no developments or events were seen that could signifi cantly affect the company’s future situation with regard to its assets, fi nancial standing or earn-ings position.
Outlook report
We will give our members and policyholders a share of the satisfactory business perfor-mance in 2009 and transact a premium refund in 2010. In house owners’ comprehensive insurance, a premium refund of 25 % will be paid for all policies held throughout 2009 that have not been cancelled and that have remained claims-free, as long as the refund amount is at least € 5.
We expect total premium income in 2010 to be roughly on par with that seen last year. At the same time, we are also assuming increasing net expenses for claims and costs, not least due to cyclone “Xynthia” which cut a swathe across Germany at the end of February/beginning of March, but whose effects are nothing in comparison with “Kyrill” in 2007. On the whole, we anticipate a lower underwriting result for own account.
16
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Management report
We anticipate the following capital market trend. Inline with economic research institu-tions, we only anticipate moderate economic growth in 2010 and 2011. This may lead to dashed expectations in certain industries, causing us to predict a sideways trend on the equity market on balance in 2010 – albeit with not inconsiderable, sharp swings.
On the interest markets, we foresee initial restrictive measures on the part of the central banks over the course of the year (tightening of the very generous liquidity supply, initial interest increases – presumably not until H2). Whilst these will impact on money market rates, we believe that they will barely lead to signifi cant increases in interest rates at the far end of the interest curve. Should an economic upswing stabilise in 2011, this may lead to rising interest rates.
We anticipate a lower investment result for DEVK Sach- und HUK-Versicherungsverein in 2010, as we are assuming lower addition requirements. A signifi cantly poorer situation would result if the signifi cant state economic programmes fail to produce a viable upswing. Interest at the far end would then be more likely to decline still further, and renewed, signifi cant share price falls are then likely on the equity markets.
Our current estimates do not suggest that there will be any major one-off charges in the other results that could signifi cantly impact the overall result. As things stand, we assume that the other income item will be slightly below that of last year.
Taking everything into consideration, we expect a net profi t for 2010 in line with that achieved in FY 2008.
We consider it possible that the underwriting result will stabilise in 2011. The prerequisite for this is an easing of the competitive situation in the motor vehicle insurance segment leading to an associated increase in price level.
Cologne, 16 April 2010
The Management Board
Gieseler Faßbender Klass Rüßmann Umlandt Zens
1918
Notes to management report
Index of operated classes of businesses in the
fi nancial year under review
Casualty insurance
General accident insuranceMotor vehicle accident insurance
Liability insurance
Motor vehicle liability insurance
Other motor vehicle insurance
Fully comprehensive motor insurancePartial comprehensive (third-party, fi re & theft) motor insurance
Fire and non-life property insurance
Fire insuranceBurglary insuranceWater damage insuranceGlass insuranceWindstorm insuranceHouseholders’ comprehensive insuranceHouse owners’ comprehensive insuranceEngeneering insurance Universal caravan insurance Extended coverage insuranceTravellers’ baggage insuranceAll risk insurance
Other insurance policies
Transport insuranceBreakdown service insurance Cheque card insurance
Travel health insurance
Balance sheet as of 31 December 2009
Financial statements
Assets
€ € € (Previous year € ’000s)
9,531,439 (3,841)
16,831,469 (17,516)
544,502,086 (542,402) 6,204,470 (7,457) 550,706,556 (549,859)
304,032,705 (307,555) 48,873,665 (18,395) 92,601,704 (99,320) 325,006,946 (334,042) 12,884,584 (12,246) 783,399,604 (771,558) 1,350,937,629 (1,338,933) 1,795,901 (1,208) 24,415,535 (24,462) 26,211,436 (25,670)
5,618,949 (6,880) (4,051)
120,925,527 (40,247) 152,755,912 (72,797) (33,756)
11,661,458 (6,373)
17,758,440 (18,072)
304,955 (148) 29,724,853 (24,593) 7,549,032 (7,604)
1,926,953 (2,132) 9,475,985 (9,736)
1,552,425,818 (1,449,900)
A. Intangible assets
B. Investments I. Real estate and similar land rights,
including buildings on third-party land
II. Investments in affi liated companies and participations 1. Shareholdings in affi liated companies 2. Participations
III. Other investments 1. Equities, fund shares and other non-fi xed-interest securities 2. Bearer bonds and other fi xed-interest securities 3. Mortgage loans 4. Other lending 5. Other investments
C. Receivables I. Receivables from insurance concluded
by the company itself: 1. Policyholders 2. Insurance brokers
II. Amounts receivable from reinsurance business, of which: Owed by affi liated companies: € 3,856,194
III. Other receivablesof which: Owed by affi liated companies: € 113,166,683
D. Other assets I. Tangible assets and inventories
II. Cash at banks in current accounts, cheques and cash assets
III. Other assets
E. Deferred income I. Deferred interest and rental income
II. Other prepaid expenses
Total assets
It is confirmed that the premium reserve amounting to € 7,065,403.98 accrued in the balance sheet under the items B.III. of the liabilities has been calculated in compliance with Sections 341f and 341g of the German Commercial Code (HGB) and based on Section 65 Para. 1 of the decreed statutory ordinance “Law on the Supervision of Insurance Undertakings (VAG)”.
Cologne, 15 April 2010 Responsible actuary | Dr Siegberg
I herewith certify that, pursuant to Section 73 of the German Law on the Supervision of Insurance Undertakings (VAG), the assets detailed in the index of guarantee assets are properly invested and guaranteed in accordance with the statutory and supervisory authority require-ments.
Cologne, 15 April 2010 Trustee | Thommes
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
2120
Liabilities and shareholders’ equity
A. Equity
– Other retained earnings 1. Loss reserve in acc. with Section 37 of German Act on the Supervision of Insurance Companies (VAG) 2. Other retained earnings
B. Technical reserves I. Unearned premiums 1. Gross amount 2. Of which deducted: Allotment for the insurance
business ceded to reinsurance
II. Actuarial reserve
III. Reserve for insurance claims not yet settled
1. Gross amount 2. Of which deducted: Allotment for the insurance
business ceded to reinsurance
IV. Reserve for performance-related and non-performance-related premium refunds
V. Equalisation reserve and similar reserves
VI. Other technical reserves 1. Gross amount 2. Of which deducted: Allotment for the insurance
business ceded to reinsurance
C. Other reserves I. Tax provisions
II. Other reserves
D. Deposits liabilities incurred from insurance business ceded to reinsurance
E. Other liabilities I. Liabilities stemming from self-generated business
with respect to:1. Policyholders 2. Insurance brokers
II. Reinsurance payable of which: Owed to affi liated companies: € 197,890
III. Other liabilities of which: From taxes: € 6,972,798 As part of social security programme: € 2,824 Owed to affi liated companies: € 21,316,104
F. Deferred income
Total liabilities
€ € € (Previous year € ’000s)
151,521,407 (151,521) 698,609,234 (655,957) 850,130,641 (807,478)
105,731 (59) 6,475 (4) 99,256 (55)
17,231 (21)
438,789,117 (434,211)
134,849,317 (138,701) 303,939,800 (295,510)
28,060,801 (30,213)
41,900,347 (51,541)
1,641,254 (1,638)
146,937 (376) 1,494,317 (1,262) 375,511,752 (378,602)
28,694,219 (27,696)
26,386,466 (27,095) 55,080,685 (54,791)
62,159,180 (62,552)
25,054,911 (24,383) 135.299 (385) 25,190,210 (24,768)
977,574 (270)
(139)
183,073,527 (121,112) 209,241,311 (146,151) (7,075) (4) (29,081)
302,249 (326)
1,552,425,818 (1,449,900)
Profi t and loss account for the period from 1 January to 31 December 2009
Items
I. Technical account
1. Earned premiums for own account a) Booked gross premiums b) Ceded reinsurance premiums
c) Change in gross unearned premiums d) Change in reinsurers’ allotment of gross unearned premium
2. Technical interest income for own account
3. Other underwriting income for own account
4. Expenses for claims for own account a) Payments for insurance claims aa) Gross amount bb) Reinsurers’ allotment
b) Change in reserve for insurance claims not yet settled aa) Gross amount bb) Reinsurers’ allotment
5. Change in other net underwritingreservesa) Net actuarial reserve b) Other net underwriting reserves
6. Expenses for performance-related and non-performance-related premium refunds for own account
7. Expenses for insurance business for own account a) Gross expenses for insurance businessb) of which deducted: Commissions and participations in earnings received from insurance business ceded to reinsurance
8. Other underwriting expenses for own account
9. Sub-total
10. Change in equalisation reserve and similar reserves
11. Technical result for own account
Amount carried forward:
€ € € (Previous year € ’000s)
291,702,573 (291,078) 44,908,744 (43,251) 246,793,829 (247,827) – 46,317 (3)
2,155 (1) – 44,162 (4) 246,749,667 (247,831)
– 164,681 (– 194)
125,551 (125)
196,243,773 (200,755) 29,226,156 (33,916) 167,017,617 (166,839)
4,578,432 (– 9,875) 3,852,014 (9,698) 8,430,446 (– 177) 175,448,063 (166,662)
3,499 (6) – 260,179 (135) – 256,680 (141)
5,190,636 (5,300)
74,567,749 (68,109)
9,312,435 (9,081) 65,255,314 (59,028)
935,182 (904)
– 375,338 (16,009)
9,640,573 (6,234)
9,265,235 (22,243)
9,265,235 (22,243)
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Financial statements
2322
Items
Amount carried forward:
II. Non-technical account
1. Income from investmentsa) Income from participations of which: From affi liated companies: € 15,320,000 b) Income from other investments
aa) Income from real estate and similar land rights including buildings on third-party land
bb) Income from other investments of which: From affi liated companies: € –
c) Income from additions d) Profi ts from the divestment of investments
2. Expenses for investments a) Expenses for the administration of investments, interest expenses, and other expenses for the investments b) Write-downs on investments c) Losses from the divestment of investments
3. Technical interest income
4. Other income
5. Other expenses
6. Profi t on ordinary activities
7. Taxes on income a) Own
b) Allocation passed on
8. Other taxes
9. Net profi t for the year
10. Allocations to retained earnings – to other retained earnings
11. Unappropriated retained earnings
€ € € € (Previous year € ’000s)
9,265,235 (22,243)
15,429,500 (10,225) (10,215)
2,346,871 (2,352) 34,776,680 (35,342) 37,123,551 (37,494) (–)
9,778,158 (352) 3,915,377 (15,491) 66,246,586 (63,762)
1,871,161 (1,917) 7,557,054 (32,883) 308,305 (1,609) 9,736,520 (36,409)
56,510,066 (27,353) 1,089,905 (1,091) 55,420,161 (26,261)
315,102,488 (291,483)
322,086,647 (298,474) – 6,984,159 (– 6,990)
57,701,237 (41,514)
13,996,922 (23,023) 500,580 (– 6,672) 14,497,502 (16,351)
551,735 (398) 15,049,237 (16,749)
42,652,000 (24,765)
42,652,000 (24,765)
– (–)
Notes
Accounting, evaluation and valuation methods
The intangible assets (IT software) were assessed at procurement cost and subjected to scheduled depreciation.Low-value assets, that were added to the collective items, were written off over a period of fi ve years, starting with the year of their acquisition. These items were otherwise recorded in the year of their acquisition as operating expenses.
The land, land rights and buildings, including buildings on third-party land were subject to scheduled depreciation using the purchase and manufacturing costs.
The shareholdings in affiliated companies and participations were reported at the procurement cost or the lower attributable value.
The approach for the equities, fund shares and other non-fixed interest securities, for the bearer bonds and for other fixed interest securities was based on the purchase cost or the market price if lower. Investments allocated to the fi xed assets in accordance with Section 341b Para. 2 of the German Commercial Code (HGB) were assessed in accordance with the modifi ed principle of lowest cost or market value. Investments allo-cated to the current assets were evaluated in accordance with the strict principle of low-est cost or market value. If a depreciation was applied to a lower value in previous years, an addition was made if this asset could be assigned a higher value once again on the balance sheet date. The additions were made up to the level of the procurement cost or the market value if lower.
The mortgage loans have been reported at their nominal values minus individual valua-tion adjustments to take account of the inherent default risk. The discount was included under deferred income and received depending on the term.
The balance sheet values of the registered bonds, claims backed by borrowers’ notes and loans correspond to the nominal value. The other lendings are reported at their nominal values. The premium and discount were distributed throughout the term using deferrals and accruals.Zero promissory note bonds were capitalised at their procurement costs plus the interest entitlement depending on the volume of capital and the interest agreement.
The other investments were partly valued at their procurement costs or lower market values or at the nominal values.
The receivables from insurance business the company itself concluded are reported in the balance sheet at nominal values minus individual valuation adjustments and a lump-sum write-down for the inherent default risk.
The amounts receivable from the reinsurance business were arrived at based on the reinsurance contracts and were reported at their nominal values.
The other receivables were valued at their nominal values.
The other assets were evaluated at their nominal values unless they were part of the operational and offi ce equipment. The operational and offi ce equipment was reported in
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
2524
the balance sheet at purchase cost or manufacturing cost and subject to scheduled depreciation. The levels of depreciation were calculated using the linear method. Low-value assets were written off completely in the year of their acquisition.Low-value assets, that were added to the collective items, were written off over a period of fi ve years, starting with the year of their respective acquisition. These items were otherwise recorded in the year of their acquisition as operating expenses.
Besides advance payments for future periods, interest entitlements not yet due were mainly reported at nominal values under prepaid expenses.
The assessment of the technical reserves was performed in accordance with the following principles:The unearned premiums were to be charged in the moped insurance for the months January and February of the following year. The premium allotments for these two months were calculated from the premiums booked as unearned premiums on a monthly basis according to the insurance policy terms. The NRW Finance Minister’s decree from 30 April 1974 was taken into account in the calculation of the unearned premiums. For other insurance business, unearned premiums did not have to be reported because in this area the insurance year matches the calendar year.
The premium reserve to be accrued in the child’s accident insurance business in the event of a claim was calculated individually in accordance with the prospective method and took account of the implicit applied costs. The mortality table DAV 2006 HUR, 4.0 % was used as a basis. Insurance claims for which a reserve was to be accrued for the fi rst time in the period 31 December 2000 to 31 December 2003 were evaluated using an accounting rate of return of 3.25 %. In the case of insurance claims, for which a reserve was to be accrued for the fi rst time between 31 December 2004 and 31 December 2006, an accounting rate of return of 2.75 % was used. For all other, later cases, an accounting rate of return of 2.25 % was used as a basis.
The reserve for insurance claims not yet settled was determined individually for each claim. A reserve was accrued for unknown IBNR losses in accordance with blanket criteria. Amounts for claims settlement were taken account of in the reserve.
The calculation of the pension coverage provision complied with the requirements laid down in Sections 341f and 341g of the German Commercial Code (HGB). The calculation is based on the mortality table DAV 2006 HUR.An accounting rate of return of 4.0 % was used, however, in the case of insurance claims, for which a reserve was to be accrued for the fi rst time between 31 December 2000 and 31 December 2003, an accounting rate of 3.25 % was used as a basis. In the case of insurance claims, for which a reserve was to be accrued for the fi rst time between 31 December 2004 and 31 December 2006, an accounting rate of return of 2.75 % was used. For all other, subsequent cases, 2.25 % was used as a basis. The reinsurers’ allotment was calculated in accordance with the contractual agreements.
As a result of decisions taken by the Management Board and the Supervisory Board, the allocation to the reserve for performance-related premium refunds took account of tax legislation.
The reserve for non-performance related premium refunds was accrued using con-tractual agreements with the policyholders as a basis.
The equalisation reserve was calculated in accordance with the notes to Section 29 of the German Insurance Company Accounting Regulation (RechVersV).
The other underwriting reserves include unused premiums from dormant motor vehicle insurance policies, the reserve relinquished by “Verkehrsopferhilfe e.V. (VOH - Traffi c Accident Victim Assistance, registered association)” for traffi c accident victims, a reserve for premium refunds for premium claims and a reserve for premiums already received and for premium liabilities and anticipated lapses stemming from reinsurance contracts. These reserves were estimated or calculated as well as possible based on corresponding mathematical models, or if necessary based on past values. The other provisions were accrued in accordance with the following principles: With the exception of the reserve accrued for semi-retirement to part-time working liabilities, the tax provisions and other reserves are sized according to the probable requirement and were set at the level that a commercial assessment suggested would be necessary.
The reserve for semi-retirement to part-time working liabilities was proportionally accrued with an accounting rate of return of 5.5 %. The level of the reserve took account of the likelihood of semi-retirement to part-time working benefi ts being claimed. Morbidity and mortality rates were applied across the board.
The deposits liabilities from insurance business ceded to reinsurance result from a reinsurance agreement on the coverage of claims and pension coverage provisions are evaluated using the present value.
The liabilities stemming from insurance business concluded by the company itself and the other liabilities were assessed using the repayment amounts.
The accounts payable from the reinsurance business were arrived at based on the reinsurance contracts and were reported at their repayment amounts.
The discount stemming from mortgages, registered bonds, borrowers’ notes, loans and rents received in advance was applied under deferred income.
The currency conversion of items denominated in foreign currencies was done at the exchange rate on the closing date or at the average exchange rate for the acquisitions.
The technical interest income for own account was calculated using 4.0 %, 3.25 %, 2.75 % and 2.25 % from the respective arithmetic mean of the initial and fi nal amounts for the gross pension coverage provisions for accident, liability, motor vehicle liability and motor vehicle accident insurance business.
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Notes
2726
Performance of asset items A., B.I., to III. in FY 2009
Assets
Balance sheet Balance sheet values Re- Write- values Previous year Allocations allocations Disposals Additions downs Financial year € ’000s € ’000s € ’000s € ’000s € ’000s € ’000s € ’000s
– – – – – – –
– – – – – – – 3,841 6,397 – – – 707 9,531
3,841 6,397 – – – 707 9,531
17,516 – – – – 685 16,831
542,402 2,100 – – – – 544,502 7,457 295 – 43 – 1,504 6,205
549,859 2,395 – 43 – 1,504 550,707
307,555 36,464 – 45,153 9,778 4,611 304,033
18,395 32,956 – 2,477 – – 48,874 99,320 16,865 – 23,412 – 171 92,602
127,500 – – – – – 127,500
198,986 10,964 – 20,000 – – 189,950 7,556 – – – – – 7,556 12,246 1,225 – – – 586 12,885
771,558 98,474 – 91,042 9,778 5,368 783,400
1,342,774 107,266 – 91,085 9,778 8,264 1,360,469
A. Intangible assets 1. Expenses for the initiation
and expansion of the opera- tional business in accordance with Section 269 Para. 1 Sentence 1 of the German Commercial Code (HGB)
2. Goodwill acquired in return for payment
3. Other intangible assets
4. Total A.
B.I. Real estate and similar land rights, including buildings on third-party land
B.II. Investments in affi liated companies and participations
1. Shareholdings in affi liated companies
2. Participations
3. Total B.II.
B.III. Other investments
1. Equities, fund shares and other non-fi xed interest securities
2. Bearer bonds and other fi xed-interest securities
3. Mortgage loan 4. Other lending
a) Bearer bondsb) Borrowers’ notes and loansc) other lending
5. Other investments
6. Total B.III.
Total
Explanatory notes on balance sheet
Re: Asset items B.
Investments
We have allocated investments that are to be permanently held in the investment portfo-lio to the fi xed assets in accordance with Section 341b Para. 2 of the German Commer-cial Code (HGB). As of 31 December 2009, these investments have the following book and present values:
The valuation reserves contain hidden liabilities amounting to € 19.79 m. These are accounted for by real estate, mortgages, zero bonds and securities reported at their nominal values in accordance with Section 341c of the German Commercial Code (HGB).
Different valuation methods were applied to determine the present value depending on the respective type of investment.
The land valuation was determined in principle in accordance with the income approach to valuation. All of the real estate properties present on 31 December 2009 have been re-valued as per this date. The hidden liabilities are paid off using scheduled depreciation in the subsequent periods.
The calculation of the present value for shareholdings in affi liated companies and partici-pations are partly based on income values, the market price or book value equals market value. The book value was reported in the case of DEVK Jupiter Vier GmbH, DEVK Sigma GmbH and Echo Rückversicherungs-AG, for example.
The valuation of the lien on real estate was performed using the latest interest curve and took account of the reliability and property risk.
Book value€
16,831,469
544,502,0866,204,470
304,032,70548,873,66592,601,704
127,500,000189,950,487
7,556,45912,884,584
1,350,937,629
946,412,466
147,871,155
Present value€
28,535,000
1,355,292,6916,887,155
331,256,66651,863,29095,339,237
130,821,055185,513,958
5,643,3729,047,126
2,200,199,550
1,795,902,385
153,880,492
B.I. Real estate and similar land rights, including buildings on third-party land
B.II. Investments in affiliated companies and participations 1. Shareholdings in affiliated companies
2. Participations
B.III. Other investments 1. Equities, fund shares and other
non-fixed-interest securities 2. Bearer bonds and other fixed-interest securities 3. Mortgage loans 4. Other lending
a) Registered bondsb) Borrowers’ notes and loansc) Other lending
5. Other investments
Total
of which:Investments assessed at procurement costs
of which: Investments in fixed assets in accordance with Section 341b Para. 2 of the German Commercial Code (HGB).
Investments
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Notes
2928
Both dividend-bearing instruments and fi xed-interest securities reported on the balance sheet at their procurement costs were also valued using the market prices valid at the end of the year. The present values for the investments reported at nominal value (registered securities) were determined in accordance with Section 56 of the German Insurance Company Accounting Regulation (RechVersV) based on the yield curve at market terms. The present values of the zero promissory note bonds and other investments were calcu-lated using the year-end prices published by each of the issuing banks.
The present values for the remaining loans and silent partnerships as defi ned in the German Banking Act (KWG) (surrogate forms of capital) were determined on the basis of a DCF method based on the current EURO swap curve and a risk premium. In this, consideration was given to anticipated, future payment fl ows under observance of debtor-specifi c assumptions.
For investments denominated in foreign currencies, the corresponding exchange rate at the end of the year was incorporated in the calculation of the present value.
Other lending
Book value € ’000s
23,083
Present value to be attributed € ’000s
19,183
Information about fi nancial instruments as defi ned by Section 285 No. 19 of the German Commercial Code (HGB), which were recorded in the balance sheet using their attributable present value
The company refrained from performing write-downs in accordance with Section 253 Para. 2 Sentence 3 of the German Commercial Code (HGB), because it intends to hold various securities until they mature or because it is assumed that any loss in value is merely temporary in nature.
Valuation methodShort-put options: European options Black-Scholes American options Barone-AdesiShort-call options: European options Black-Scholes American options Barone-AdesiPre-emptions: Bloomberg/own calculations based on market data
Book value of premiums€ ’000s
172
43
–
Nominal scope€ ’000s
3,340
1,640
58,000
Type
Short-put options
Short-call options
Pre-emptions
Other liabilities
Other liabilities
Promissory note bonds
Attributable value for premium € ’000s
44
23
2,360
Information about derivative fi nancial instruments and pre-emptions in accordance with Section 285 No. 18 of the German Commercial Code (HGB)
Re: Asset items B.II.
DEVK Rückversicherungs- und Beteiligungs-AG, Cologne
DEVK Allgemeine Versicherungs-AG, Cologne
DEVK Rechtsschutz-Versicherungs-AG, Cologne
DEVK Krankenversicherungs-AG, Cologne
DEVK Allgemeine Lebensversicherungs-AG, Cologne
DEVK Pensionsfonds-AG, Cologne
DEVK Vermögensvorsorge- und Beteiligungs-AG, Cologne
DEVK Alpha GmbH, Cologne
DEVK Asset Management GmbH, Cologne
DEVK Beta GmbH, Cologne
DEVK Gamma GmbH, Cologne
DEVK Iota GmbH, Cologne
DEVK Omega GmbH, Cologne
DEVK Private Equity GmbH, Cologne
DEVK Saturn GmbH, Cologne
DEVK Service GmbH, Cologne
DEVK Sigma GmbH, Cologne
DEVK Unterstützungskasse GmbH, Cologne
DEVK Web GmbH, Cologne
DEVK Zeta GmbH, Cologne
DEVK Zeus Vermögensverwaltungs-AG, Cologne
Assistance Service GmbH, Schöneiche
Ceyoniq Sales & Services GmbH Süd, Nürnberg
Ceyoniq Technology GmbH, Bielefeld
eSlidez GmbH, Bielefeld
German Assistance Versicherung AG, Coesfeld
Hands on Media GmbH, Bielefeld
Hotelbetriebsgesellschaft SONNENHOF mbH, Cologne
HYBIL B.V., Venlo
JUPITER VIER GmbH, Cologne
Investments in affi liated companies and participations
Net profi t for last fi nancial year
€
54,947,978
–
–
–
–
70,000
–
– 170
–
– 129
– 172
72
72
– 3,515,086
72
–
72
183
–
35,546
– 114
89,905
28,474
175,800
2,372
– 995,522
1,512
–
948,349
188,122
Shareholders’ equity
€
896,788,435
312,170,794
26,563,459
6,980,291
56,880,301
8,593,766
107,000,000
26,222
100,000
34,266
25,509
24,347
24,346
105,020,476
24,346
3,110,379
24,275
24,452
25,000
305,652
50,477
156,935
84,801
1,066,924
40,993
2,527,778
26,512
356,023
46,313,982
3,429,672
Shareholding broken down
as %
100.00
100.00
100.00
100.00
51.00
51.00
51.00
51.00
100.00
100.00
100.00
51.00
100.00
57.65
100.00
74.00
100.00
100.00
100.00
51.00
100.00
79.17
59.61
59.61
32.30
79.17
59.61
51.00
85.10
100.00
Share-holding
as %
100.00
100.00
100.00
100.00
100.00
100.00
51.00
100.00
100.00
100.00
100.00
100.00
100.00
65.00
100.00
74.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
66.67
55.00
100.00
100.00
100.00
90.00
100.00
Subscribedcapital
€
306,775,129
194,290,915
17,895,216
6,000,000
7,158,086
4,000,000
20,000,000
25,000
100,000
25,000
25,000
25,000
25,000
10,000,000
25,000
260,000
25,000
25,000
25,000
25,000
50,000
51,129
100,000
1,000,000
25,000
1,462,500
25,000
375,000
400,000
25,000
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Notes
Re: Asset items B.I.
Real estate and similar land rights, including buildings on third-party land
Real estate properties in the book value of € 2,098,994 are chiefl y used by DEVK Sach-und HUK-Versicherungsverein a.G. and the other companies belonging to the DEVK Group. The area used by the DEVK Group is calculated in m2 for each property by sub-tracting the area used by third parties from the total area.
31
Re: Asset items B.III.
Other investments The other lending item contains only registered profi t participation certifi cates.The other investments item pertains to fund units and silent partnerships as defi ned by the German Banking Act (KWG) and co-operative shares
KASSOS Beteiligungs- und Verwaltungs-GmbH, Cologne(Financial year 2008)
Lieb’ Assur S.A.R.L., Nîmes
Monega Kapitalanlagegesellschaft mbH, Cologne
O. I. L. Vertriebs GmbH, Coesfeld
OUTCOME Unternehmensberatung GmbH, Aachen
Reisebüro Frenzen GmbH, Cologne
SADA Assurances S.A., Nîmes
ECHO Rückversicherungs-AG, Zürich
Investments in affi liated companies and participations
Net profi t for last fi nancial year
€
282,194
– 3,803
1,458,560
– 108,837
– 396,535
85,216
– 435,237
CHF
– 3,716,689
Shareholders’ equity
€
1,065,311
375,997
6,658,560
19,203
11,884
355,578
11,071,088
CHF
46,283,611
Shareholding broken down
as %
100.00
100.00
45.00
79.17
80.00
52.00
100.00
100.00
Share-holding
as %
100.00
100.00
45.00
100.00
80.00
52.00
100.00
100.00
Subscribedcapital
€
25,000
250,000
5,200,000
102,258
525,000
25,000
18,216,840
CHF
20,000,000
Re: Asset items E.II.
Other prepaid expenses
Premium for borrowers’ notes and loans, registered profi t participation certifi cates, registered bonds and silent partnerships € 429,473Prepayments for future benefi ts € 1,497,480 € 1,926,953
Re: Liabilities A.–.
Retained earnings
Other retained earnings Status on 31.12.2008 € 655,957,234Addition € 42,652,000Status on 31.12.2009 € 698,609,234
30
In accordance with Section 285 No. 11 of the German Commercial Code (HGB) only investments in affi liated companies and participations with a shareholding of at least 20.00 % are taken into consideration here.
Re: Liabilities B.IV.
Reserve for performance-related and non-performance-related premium refunds
a) Performance-related Status on 31.12.2008 € 30,072,704 Withdrawal € 7,229,830 Addition € 5,012,800 Status on 31.12.2009 € 27,855,674
b) Non-performance-related Status on 31.12.2008 € 140,200 Withdrawal € 108,699 Addition € 173,626 Status on 31.12.2009 € 205,127
Re: Liabilities F.
Deferred income
Discount stemming from mortgage loans,registered bonds and borrowers’ notesand loans € 293,393Rent paid in advance € 8,856 € 302,249
Re: Liabilities B.
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Notes
Technical reserves
Figures in € ’000s Of which: Equalisation reserve and
similar reserves
Of which: Reserve for insurance claims
not yet settledGross reserve
Total
Insurance branches
Accident
Liability
Motor vehicle liability
Other motor vehicle
Fire and non-life
of which:
Fire
Householders’ comprehensive
House owners comprehensive
Other non-life
Other
Total
Prev. year
–
2,139
24,959
15,511
8,881
509
–
4,373
3,999
51
51,541
Financial year
–
4,822
20,757
3,805
12,308
632
–
6,508
5,168
208
41,900
Prev. year
56,173
50,005
297,390
11,572
18,893
1,755
5,104
7,916
4,118
178
434,211
Financial year
63,272
47,927
298,078
11,244
18,101
1,225
5,253
8,124
3,499
167
438,789
Prev. year
58,691
61,293
323,409
36,112
37,949
2,265
15,079
12,448
8,157
229
517,683
Financial year
68,286
54,671
319,981
24,148
43,052
1,857
17,740
14,751
8,704
376
510,514
3332
Insurance business concluded by the company itself
Financial year in € ’000s Gross expenses for
Accident
Liability
Motor vehicle liability
Other motor vehicle
Fire and non-life
of which:
Fire
Householders’ comprehensive
House owners comprehensive
Other non-life
Other
Total
Underwr. result f.o.a
1,269
7,395
– 3,168
– 882
4,703
– 254
3,510
– 1,376
2,823
– 52
9,265
Reinsurancebalance
– 924
– 1,792
– 2,505
394
– 5,191
– 205
– 483
– 2,944
– 1,559
– 202
– 10,220
Insurance operations
11,119
13,372
12,171
10,564
27,173
433
11,709
8,802
6,229
169
74,568
Insurance claims
21,293
9,540
72,360
60,419
36,377
147
13,536
18,286
4,408
833
200,822
Earned net
premiums
28,797
33,838
72,563
42,659
67,855
504
31,740
21,603
14,008
1,038
246,750
Earned gross
premiums
37,007
34,776
79,978
58,316
80,272
709
32,241
31,109
16,213
1,307
291,656
Explanatory notes on consolidated income statement
Booked gross
premiums
37,007
34,776
80,018
58,323
80,272
709
32,241
31,109
16,213
1,307
291,703
Previous year in € ’000s Gross expenses for
Accident
Liability
Motor vehicle liability
Other motor vehicle
Fire and non-life
of which:
Fire
Householders’ comprehensive
House owners comprehensive
Other non-life
Other
Total
Underwr. result f.o.a
5,392
8,194
1,538
929
5,698
– 238
5,878
– 1,197
1,255
492
22,243
Reinsurancebalance
– 4,411
– 1,774
– 2,411
1,560
– 2,781
– 293
– 368
– 818
– 1,302
– 134
– 9,951
Insurance operations
10,260
12,756
10,583
9,210
25,174
387
10,894
8,028
5,865
126
68,109
Insurance claims
13,906
7,763
68,704
59,738
40,062
– 101
13,530
20,794
5,839
707
190,880
Earned net
premiums
27,672
32,260
76,819
43,365
66,715
479
31,713
20,632
13,891
1,000
247,831
Earned gross
premiums
36,007
33,170
83,122
59,597
77,937
673
32,137
29,720
15,407
1,248
291,081
Booked gross
premiums
36,007
33,170
83,119
59,597
77,937
673
32,137
29,720
15,407
1,248
291,078
In the entire insurance business, gross expenses for the insurance business were distrib-uted as follows:Acquisition costs € 38,392,558Administration costs € 36,175,191
Commissions and other remuneration for insurance representatives, personnel expenses
1. All types of commission for insurance representatives as defined in Section 92 of the German Commercial Code (HGB) for insurance business concluded by the company itself
2. Other remuneration for insurance representatives as defined in Section 92 German Commercial Code (HGB)
3. Wages and salaries
4. Social security contributions and costs for social insurance
5. Retirement pension costs
Total
Financial year € ’000s
22,179
1,378
173,114
27,721
13,465
237,857
Previous year € ’000s
18,008
1,706
162,881
26,517
3,584
212,696
The pension provision for the employees of DEVK Sach- und HUK-Versicherungsverein a.G. is reported on the balance sheet of DEVK Rückversicherungs- und Beteiligungs-AG. The wages and salaries, social security contributions and costs for social insurance and the pension provision addition, with the exception of the interest addition, are charged to DEVK Sach-und HUK-Versicherungsverein a.G. The personnel expenses for the employees provided to the subsidiary companies by way of the joint contract are settled according to the costs-by-cause principle.
In the year under review, the Management Board remuneration amounted to € 853,043. The superannuation of the former Management Board members and dependants came to € 898,934. For this category of persons, a pension provision of € 10,268,837 was reported by DEVK Rückversicherungs-und Beteiligungs-AG on 31 December 2009. The Supervisory Board remuneration came to € 346,789. The Advisory Committee remunera-tion totalled € 81,337.
At the balance sheet date, receivables from liens on real estate totalling € 43,534 were due from members of the Management Board under consideration of a total repayment of € 1,894 during the current year. The agreed terms are between 28 and 29 years. The loans were issued at interest rates of 5 %.
Other information
Contingencies and other fi nancial liabilities
On the balance sheet date, the company had financial liabilities amounting to € 4.9 m stemming from open short options, € 74.0 m from multi-tranche promissory note bonds and € 58.0 m from open pre-emptions.
The remaining payment liabilities stemming from real estate holdings, shareholdings in affiliated companies and participations at the end of the year amounted to a total of € 17.5 m. This included liabilities owed to affiliated companies worth € 1.5 m.
By way of a collateral promise, the pension provisions for the retirement pension of all DEVK Group employees have been transferred to DEVK Rückversicherungs- und Beteili-gungs-AG subject to the surrender of corresponding investments. The retirement pension liabilities for the DEVK Group have therefore been bundled at one risk carrier. This there-fore improves the protection of the employees’ retirement pension rights.
DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versicherungsverein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn
Notes
3534
General information
The composition of the members of the Management Board, the Supervisory Board and Advisory Committee are detailed before the management report.
In the year under review, the average number of employees, excluding inactive work contracts and after the conversion of part-time employees to full-time equivalents came to: 3,138. This involves 62 executives and 3,076 salaried employees.
In accordance with the legal requirements, the annual financial statements are published in Germany’s Electronic Federal Gazette.
Information concerning the auditor’s fees is contained in the explanatory notes to the consolidated financial statement in accordance with Section 285 No. 17 of the German Commercial Code (HGB, new version).
The consolidated financial statements are published on the home page of DEVK under www.devk.de and in Germany’s Electronic Federal Gazette.
Cologne, 16 April 2010
The Management Board
Gieseler Faßbender Klass Rüßmann Umlandt Zens
Benefit obligations amounting to € 277.7 m arose from joint and several liability for the pension liabilities reported on DEVK Rückversicherungs- und Beteiligungs-AG’s balance sheet.
No. of insurance policies concluded by the company itself with a term of at least one year
Accident
Liability
Motor vehicle liability
Other motor vehicle
Fire and non-life
of which:
Fire
Householders’ comprehensive
House owners comprehensive
Other non-life
Other
Total
Prev. year
260,454
608,078
528,277
426,977
977,516
2,507
448,487
165,637
360,885
554
2,801,856
Financial year
258,106
601,856
534,684
438,651
982,074
2,398
445,300
168,652
365,724
498
2,815,869
Independent auditor’s report
We have audited the financial statements, comprising the balance sheet, the profit and loss account and the notes including the accounting systems and the management report prepared by DEVK Deutsche Eisenbahn Versicherung Sach- und HUK-Versiche rungs-verein a.G. Betriebliche Sozialeinrichtung der Deutschen Bahn, Cologne for the finan-cial year from 1 January to 31 December 2009. The maintenance of the books of records and the preparation of the annual financial statements and management report in accor-dance with German commercial law and the supplementary by-laws in the company’s Articles of Association are the responsibility of the company’s Management Board. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system, and the management report based on our audit.
We conducted our audit of the annual financial statements in accordance with Section 317 of the German Commercial Code (HGB) and the generally accepted standards in Germany for the audit of financial statements promulgated by the Institute of German Public Accountants (Institut der Wirtschaftsprüfer – IDW). These standards require that we plan and perform the audit such that misstatements materially affecting the presenta-tion of the net assets, financial position and results of operations in the annual financial statements and the management report, in accordance with German principles of proper accounting, are detected with reasonab