Changeover of accounting to IFRS 8 as from the 1st quarter of 2009 – Operating performance to be given more prominence
12:00 AM CET 2009/01/26
As from 1 January 2009, Munich Re will be applying the accounting standard IFRS 8. The changes, which are of limited scope, mean that the operating performance in underwriting business will be given more prominence both in the Group figures and in the segments, thus also enhancing assessability.
Concrete changes will result for the segment reporting and the income statement. In segment reporting, the subdivision into segments and the disclosure of key figures will be based more on the management view in future. This contrasts with the segment reporting based on the standard IAS 14, applied up to now, which prescribes a more rigid subdivision according to products or regions.
The two main changes:
- In segment reporting, life and health business in primary insurance will be shown separately.
- In the income statement both for the Group as a whole and for the segments, the operating result will be presented in a more differentiated way, with the technical result and the non-technical result shown separately. The technical result is the balance of earned premiums plus income from technical interest, less expenses for claims and benefits and operating expenses.
Munich Re will not be availing itself of the option to show the operating result adjusted to eliminate effects from fluctuations on the capital markets or major losses. Both are part of its core business and will thus continue to be fully included in the operating result in its income statement.
"Our figures will become that much more transparent, which is in the interests of investors and the public at large. As our shareholders are accustomed to from us, there will be no smoothing or glossing in the presentation of the operating result. We have fared well to date with this policy of clarity and openness," said CFO Jörg Schneider.
Munich Re’s first financial report applying the new rules will be the interim report for the 1st quarter of 2009, scheduled to be published on 6 May. The changeover to IFRS 8 as from the financial year 2009 is compulsory.
This press release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.