Target Achievement

In selecting suitable targets, contrasting aspects have to be considered and weighed. On the one hand, undue complexity should be avoided in order to ensure transparency. On the other hand, the challenge lies in reflecting economic realities as closely as possible, avoiding oversimplification, and enshrining added value as the Group’s overriding guiding principle.

RORAC is our primary key performance target. Whether and to what extent it is attainable depends in equal measure on the economic parameters and on the random occurrence of major losses.

The chart below shows the historic achievement of our long-term target, a return on risk-adjusted capital (RORAC) of 15% over the full cycle.

RORAC Target: 15% over the full cycle

RORAC is defined as follows:

The return on risk-adjusted capital is a risk-based performance measure. It is the profit achieved or aimed at in relation to the necessary risk capital.