Going about things differently to others – that is exactly what sets us apart. And it has done from the very outset. With lean structures and an efficient organisation, we have established ourselves as one of the leading globally operating reinsurance groups.
Right from our earliest days we were a somewhat different reinsurer: we had to secure a footing with comparatively tight capital resources in a market dominated by long-standing players. Drawing on our quick, flexible and undogmatic business approach, we evolved into a professional reinsurer with extensive specialist expertise. To this day we still operate with the lowest administrative expense ratio in the industry – a competitive edge that enables us to persevere even in protracted soft market phases. In order to grow we often had to break new ground and take on a pioneering role. We were one of the first companies in Europe to receive an S&P rating, for example, and the first German reinsurer to adopt capital-market-oriented accounting principles in its financial reporting. In 1994 we were the first reinsurer to securitise natural catastrophe risks for the capital market. In 1998 this was followed by the first transfer of new business acquisition costs associated with life and health reinsurance. Long embodied in our daily practice, the claim to be "somewhat different" has served as an expression of the entire group's self-image since 2005.
In 2015 we received approval from the Federal Financial Supervisory Authority (BaFin) to calculate our solvency requirements according to our internal partial capital model following the implementation of Solvency II. In this way we can best map the risk structure of our reinsurance business – unlike with the standard model. We are thus able to identify attractive business, optimally allocate capital to business groups, regions and lines and maximise opportunities for diversification, while continuing to efficiently fulfil our supervisory capital requirements in accordance with Solvency II.
Our ideas and know-how make it possible for our partners to open up new markets. Energy-saving warranties in building rehabilitation and bonus programmes for a healthy lifestyle may be cited as just two examples.
Going forward, too, we intend to tackle new developments and challenges with innovative ideas and concepts. In 2016 we held a competition under the name "Journey Re" in which teams of talented young people developed new business models for the insurance and reinsurance industries. Following the six-month project duration eight teams presented their product and business ideas, all of which were found to be promising by the Executive Board. Prize money of EUR 80,000 was awarded to the three concepts offering the greatest prospects of
A special hallmark of our business philosophy is that we do not fall back solely on standardised reinsurance solutions. We offer our clients financing solutions and customised concepts designed to provide relief for capital and reserves that are individually tailored to their needs.
We transact our insurance business with lower management expenses than our peers. This is to the benefit not only of our clients but also our shareholders.
In view of the fact that we assume reinsurance risks with largely little or no correlation across all lines of our Property & Casualty and Life & Health reinsurance business groups and thanks to our global presence, we achieve broad diversification and hence an efficient risk balance. In conjunction with our capital management, this is the key to our comparatively low cost of capital.
We have a very robust capital base which is continuously reviewed with an eye to possible changes in the risk profile. Our rigorous risk management is geared to acting on business opportunities and hence securing our financial strength over the long term.