Annual Report 2009 DEVK€¦ · Prof p.s.g. p.s.n. PublG RechVersV reg. assoc. RPR resp. ret....

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



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.)


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


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).


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.


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.


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


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


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


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


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


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:


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)


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


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.


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 operational 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


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


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.


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


Other motor vehicle

Fire and non-life

of which:

Fire



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


Other motor vehicle

Fire and non-life

of which:

Fire



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.


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


Other motor vehicle

Fire and non-life

of which:

Fire



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

Annual Report 2009 DEVK€¦ · Prof p.s.g. p.s.n. PublG RechVersV reg. assoc. RPR resp. ret....

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