Capital structure

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Capital structure

Group equity

Development of Group equity 31.12.2013 Prev. year Change
  €m €m %
Issued capital and capital reserve 7,426
7,421
0.1
Retained earnings 12,875
10,938
17.7
Other reserves 2,369
5,650
-58.1
Consolidated result attributable to equity holders of Munich Reinsurance Company 3,313
3,188
3.9
Non-controlling interests 243
242
0.4
Total 26,226 27,439 -4.4

Debt leverage

    31.12.2013 Prev. year Change
    Mio. € Mio. € %
Strategic debt   4,734 5,796 -18.3
Group equity   26,226 27,439 -4.4
Total   30,960 33,235 -6.8
Debt leverage
% 15.3 17.4  

We define as strategic debt all financial instruments with the character of outside financing that do not have a direct link to our operative business. Strategic debt supplements our financial resources, is essentially designed to optimise the cost of capital, and ensures that we have sufficient liquidity at all times. With a view to making our capital structure transparent, we quantify our debt leverage, which is pleasingly low compared with that of our competitors: it is defined as the ratio – expressed as a percentage – of strategic debt to the sum of Group equity and strategic debt. Our technical provisions are not considered, even though they are mostly available to us on a long-term basis as a source of financing for investment.

Our subordinated bonds are recognised in part as own funds by the German Federal Financial Supervisory Authority (BaFin). When this is considered in calculating the strategic debt, the latter is reduced to €685m and the debt leverage amounts to only 2.5%.


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