Nature of risks associated with insurance contracts and financial instruments

The disclosures provided below complement the risk reporting in the management report and reflect the requirements of German Accounting Standard DRS 5-20, IFRS 4 and IFRS 7. For fundamental qualitative statements, e.g. regarding the organization of our risk management or the assessment of the risk situation, please see the risk report in the management report.

Classes of financial instruments

IFRS 7 “Financial Instruments: Disclosures” sets out all the disclosures required for financial instruments. Some disclosure duties are to be met by establishing classes of financial instruments. The grouping made in this context must facilitate a minimum distinction between financial instruments measured at fair value and those measured at amortized cost. The establishment of classes need not necessarily be identical to the categorization of financial instruments pursuant to IAS 39.45-46 for purposes of subsequent measurement. The classes established for our financial instruments were guided by the needs of our portfolio and our balance sheet structure.

Essentially, the following classes of financial instruments were established:

• Financial instruments from insurance contracts
  • Accounts receivable on insurance business
  • Reinsurance recoverables on technical provisions
  • Funds held by ceding companies
  • Funds held under reinsurance treaties
    
    
• Financial instruments from investments
  • Investments in affiliated companies
  • Participating interests
  • Loans and receivables
  • Financial instruments held to maturity
  • Financial instruments available for sale
  • Financial instruments at fair value through profit or loss
  • Financial instruments held for trading
  • Other invested assets, insofar as they are financial instruments
    
    
• Other financial instruments
  • Other assets, insofar as they are financial instruments
  • Subordinated liabilities
  • Notes payable and loans
  • Other liabilities, insofar as they are financial instruments

The focus of the Talanx Group’s business activities is on the sale and administration of insurance products in all standard lines of property/casualty and life insurance in both primary and reinsurance business.