Qualitative risk management methods

Our qualitative methods and practices support our internal risk management and control system. The system is subject to a constant cycle of planning, action, control and improvement. The basic elements of the system, such as risk identification and risk reporting, are efficiently interlinked.

Our mandatory practices, such as the Risk Management Framework Guideline, govern inter alia the handling of new products, monitoring of the risk-bearing capacity, risk reporting and responsibilities within the system as a whole. Our risk reporting is geared to providing systematic and timely information about risks and their potential implications as well as ensuring adequate communication within the company about all material risks as a basis for decision-making. Regular quarterly reporting to the Risk Committee and Executive Board is supplemented as necessary by immediate internal reporting on material risks that materialise at short notice.

Within our central system of limits and thresholds key ratios have been specified for steering and monitoring the material risks of the Hannover Re Group – within the meaning of the materiality concept defined in the risk strategy. Risk steering and monitoring is operationalised through the specification of suitable limits and thresholds for quantitatively measurable material risks. Material risks that cannot be quantified or are difficult to quantify (such as operational risks or reputational risks) are primarily steered and monitored using appropriate processes and practices (e.g. contingency and crisis communication plans).