Important tools of corporate management

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Important tools of corporate management

The aim of Munich Re’s entrepreneurial thinking and activity is to analyse risks from every conceivable angle and to assess and diversify them, creating lasting value for shareholders, clients, and staff in relation to the risks assumed. This is the aim of our active capital management and the consistent application of value and risk-based management systems.

The Group's performance indicators

Our key corporate management tools at Group level are economic earnings and the IFRS consolidated result.

Economic earnings

The starting point for value-based management is the economic value added in a fixed period which we determine based on the key corporate management tool of economic earnings. These correspond with the change in eligible own funds under Solvency II, adjusted for items that do not represent economic value added in the period – such as capital measures, and the change in regulatory restrictions.

In applying the uniform Group performance-measurement model of economic earnings in the individual fields of business, we use conceptually consistent value-based and risk-capital-based measurement approaches1 that are individually geared to the characteristics of each of the respective businesses.

Group corporate management is designed so that we are in a position to maximise value creation while observing subsidiary parameters.

IFRS consolidated result

The IFRS consolidated result is a performance measure derived from our external accounting. It serves as an important cross-line criterion for investors, analysts and the general public to assess corporate performance. With its standardised measurement basis, the IFRS consolidated result can be compared to the results of our market competitors and is thus a management tool used in Munich Re’s financial reporting.

1Adjusted result with a minimum required return for property-casualty reinsurance, and the excess return from our investment activity (asset-liability management); the value added by new business and the change in value of in-force business in the area of life and health reinsurance, and economic earnings for ERGO.

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