Bearing in mind the challenging market environment, we are highly satisfied with the development of our investments as at 31 December 2017. Our portfolio of investments under own management contracted to EUR 40.1 billion (31 December 2016: EUR 41.8 billion). This was driven above all by negative exchange rate effects – especially associated with the weaker US dollar – as well as slightly reduced hidden reserves and the dividend distribution.
Despite the low level of interest rates, ordinary investment income excluding interest on funds withheld and contract deposits surpassed the previous year (EUR 1,162.0 million) at EUR 1,289.0 million.
Net realised gains on investments as at 31 December 2017 increased sharply from EUR 206.3 million to EUR 377.1 million. This can be attributed in large measure to the liquidation of our equity portfolio. The impairments taken in the year under review were only again only minimal.
Income from assets under own management climbed 26.3% to EUR 1,539.0 million (EUR 1,218.3 million). The resulting annual return amounted to 3.8% (3.0%). We had forecast a level of 2.7% and subsequently revised this target higher to 3.0% in November 2017. Investment income including interest on funds withheld and contract deposits rose to EUR 1,773.9 million (EUR 1,550.4 million), an increase of 14.4% relative to the previous year. Interest on funds withheld and contract deposits totalled EUR 234.9 million (EUR 332.1 million).