- Home
- Figures
- Foreword
- Executive Board
- Share
- Strategy
-
Management report
- Foundations of the Group
- Report on economic position
- Other success factors
-
Opportunity and risk report
-
Risk report
- Strategy implementation
- Major external factors
- Risk capital
- Risk management
- Risk management system
- Internal control system
- Risk landscape of Hannover Re
- Internal risk assessment
- Underwriting risks in property and casualty reinsurance
- Underwriting risks in life and health reinsurance
- Market risks
- Counterparty default risks
- Operational risks
- Other risks
- Opportunity report
-
Risk report
- Enterprise management
- Outlook
- Accounts
- Supervisory Board
- Sites
Investment policy
| Investment portfolio | |||||
|---|---|---|---|---|---|
| in EUR million | 2016 | 2015 | 2014 | 2013 | 2012 |
| Funds withheld | 11,844 | 13,990 | 15,919 | 14,343 | 14,751 |
| Investments under own management | 41,793 | 39,347 | 36,228 | 31,875 | 31,874 |
| Total | 53,637 | 53,337 | 52,147 | 46,219 | 46,625 |
Hannover Re’s investment policy continues to be guided by the following core principles:
- generation of stable and risk-commensurate returns while at the same time maintaining the high quality standard of the portfolio;
- ensuring the liquidity and solvency of Hannover Re at all times;
- high diversification of risks;
- limitation of currency exposures and maturity risks through matching currencies and maturities.
With these goals in mind we engage in active risk management based on balanced risk / return analyses. To this end we adhere to centrally implemented investment guidelines and incorporate insights gained from dynamic financial analysis. They form the basis for investment ranges which are specified in light of the prevailing state of the market and the requirements on the liabilities side and within which operational management of the portfolio takes place. These measures are intended to safeguard the generation of an appropriate level of return. In so doing, we pay strict attention to compliance with our clearly defined risk appetite, which is reflected in the risk capital allocated to the investments and constitutes the foundation for the asset allocation of the entire Hannover Re Group and the individual portfolios. Our ability to meet our payment obligations at all times is also ensured in this way. Within the scope of our asset / liability management (ALM) the allocation of investments by currencies and maturities is determined by the technical liabilities. With this in mind the modified duration of our bond portfolio is geared largely to the technical liabilities.
By adjusting the maturity pattern of our fixed-income securities to the expected payment patterns of our liabilities we reduce the economic exposure to the interest rate risk. In the current reporting period we kept the modified duration of our fixed-income portfolio broadly neutral, as a result of which it stood at 5.0 (previous year: 4.4) as at 31 December 2016. The higher figure reflects a modest business-related increase on the liabilities side which had to be covered by the portfolio. Furthermore, through active and regular management of the currency spread in our fixed-income portfolio we bring about extensive matching of currencies on the assets and liabilities sides of the balance sheet, as a consequence of which fluctuations in exchange rates have only a limited effect on our result.
At year-end 2016 we held 30.2% (30.8%) of our investments in euro, 48.3% (46.7%) in US dollars, 6.9% (8.3%) in pound sterling and 5.1% (5.1%) in Australian dollars.