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Talanx AG
Quarterly Report • Aug 20, 2024
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Quarterly Report
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Talanx Group
Interim Report
as at 30 June 2024
| Unit | 6M 2024 | 6M 2023 | +/−6M 2024 vs6M 2023 | |
|---|---|---|---|---|
| Insurance revenue | EUR million | 23,606 | 20,862 | 13.2\% |
| Primary Insurance | EUR million | 11,188 | 9,031 | 23.9\% |
| Property/casualty primary insurance | EUR million | 9,906 | 7,909 | 25.2\% |
| Life primary insurance | EUR million | 1,282 | 1,121 | 14.3\% |
| Reinsurance | EUR million | 12,916 | 12,273 | 5.2\% |
| Property/casualty reinsurance | EUR million | 9,099 | 8,365 | 8.8\% |
| Life/health reinsurance | EUR million | 3,817 | 3,908 | $-2.3 \%$ |
| Insurance revenue by region | ||||
| Germany | \% | 15 | 15 | $-0.3$ ppts |
| United Kingdom | \% | 10 | 10 | 0.3 ppts |
| Central and Eastern Europe (CEE), including Türkiye | \% | 9 | 5 | 3.0 ppts |
| Rest of Europe | \% | 12 | 13 | $-0.6$ ppts |
| USA | \% | 24 | 27 | $-3.8$ ppts |
| Rest of North America | \% | 4 | 4 | - |
| Latin America | \% | 13 | 9 | 4.3 ppts |
| Asia and Australia | \% | 12 | 14 | $-2.5$ ppts |
| Africa | \% | 1 | 1 | $-0.4$ ppts |
| Insurance service result (net) | EUR million | 2,320 | 1,627 | 42.5\% |
| Net investment income for own risk | EUR million | 2,186 | 1,726 | 26.6\% |
| Net return on investments for own risk1 | \% | 3.2 | 2.7 | 0.5 ppts |
| Operating profit/loss (EBIT) | EUR million | 2,515 | 1,957 | 28.5\% |
| Net income attributable to shareholders of Talanx AG | EUR million | 1,090 | 827 | 31.8\% |
| Primary Insurance | EUR million | 529 | 380 | 39.4\% |
| Reinsurance | EUR million | 585 | 484 | 20.8\% |
| Return on equity ${ }^{2}$ | \% | 20.3 | 18,5 1 | 1.8 ppts |
| Earnings per share | ||||
| Basic earnings per share | EUR | 4.22 | 3.26 | 29.3\% |
| Diluted earnings per share | EUR | 4.22 | 3.26 | 29.3\% |
| Combined ratio (net/gross) ${ }^{3}$ | \% | 91.2 | 93.7 | $-2.5$ ppts |
| Property/casualty primary insurance (net/gross) ${ }^{3}$ | \% | 92.4 | 94.3 | $-1.8$ ppts |
| Property/casualty reinsurance (net/net) ${ }^{3}$ | \% | 87.8 | 91.7 | $-3.9$ ppts |
| 30.06.2024 | 31.12.2023 | +/− | ||
| Total assets | EUR million | 173,972 | 169,347 | 2.7\% |
| Equity attributable to shareholders of Talanx AG | EUR million | 11,036 | 10,447 | 5.6\% |
| Contractual service margin | EUR million | 12,388 | 10,720 | 15.6\% |
| Subordinated liabilities (hybrid capital) | EUR million | 4,512 | 5,262 | $-14.3 \%$ |
| Investments for own risk | EUR million | 138,778 | 135,390 | 2.5\% |
| Carrying amount per share | EUR | 42.74 | 40.46 | 5.6\% |
| excluding goodwill | EUR | 36.35 | 34.22 | 6.2\% |
| Share price | EUR | 74.55 | 64.65 | 15.3\% |
| Number of shares outstanding | number | 258,228,991 | 258,228,991 | — |
| as at the reporting date | 29,572 | 27,863 | 6.1\% |
[^0]
[^0]: ${ }^{1}$ Adjusted in accordance with IAS 8, see also the "Accounting policies" section of the Notes in the annual financial statement 2023.
${ }^{2}$ Ratio of annualised net investment income for own risk to average investment portfolio for own risk.
${ }^{3}$ Annualised ratio of net income (after financing costs and taxes) excluding non-controlling interests to average equity excluding non-controlling interests.
${ }^{4} 1-$ [insurance service result (net) divided by insurance revenue (gross)].
${ }^{5} 1-$ [insurance service result (net) divided by (insurance revenue (gross) - reinsurance expenses)].
Contents
PAGE
Interim Group Management Report
Report on economic position ..... 4
Other reports and declarations ..... 20
PAGE
Interim consolidated financial statements
Consolidated balance sheet ..... 26
Consolidated statement of income ..... 28
Consolidated statement of comprehensive income ..... 29
Consolidated statement of changes in equity ..... 30
Consolidated cash flow statement ..... 34
Notes and disclosures ..... 35
PAGE
Review report ..... 68
Responsibility statement ..... 69
2 Talanx Group
Half-yearly financial report as at 30 June 2024
Interim Group Management Report
Interim Group Management Report
Page 1
Page 2
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Figure 1-1: Interim Group Management Report
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Report on economic position
Markets, business climate and the industry environment
Global economic activity cooled further in the first half of 2024, partly due to ongoing geopolitical tensions, falling but still high inflation and the resulting restrictive monetary policy adopted by many central banks in recent years.
At $+0.3 \%$ in the first quarter compared to the previous period, growth in the eurozone was stronger than it has been for a year and a half. Sentiment amongst companies and private households, as measured by surveys, gradually improved over the course of the first half of the year, although the business sentiment amongst industrial companies in particular (including export-orientated companies) remains subdued due to higher energy prices and weaker global trade. Thus, industrial output in May stood $2.9 \%$ lower than a year ago. In light of this, eurozone GDP grew by $0.3 \%$ in the second quarter compared to the previous quarter.
After the US economy exhibited a high level of resilience in 2023 in the face of an almost unprecedented cycle of interest rate hikes by the Fed (ten rate hikes since March 2022, from $0.25 \%$ to $5.50 \%$ ), the impact of the restrictive monetary policy is now clearly visible. For example, GDP growth slowed from $1.2 \%$ in the third quarter of 2023 to $0.3 \%$ in the first quarter of 2024 compared to the previous period. In this context, consumer spending has particularly declined. The reason for this is the slow return of the purchasing power lost in recent years, although inflation has now fallen to $3.0 \%$ after peaking at $9.1 \%$ two years ago. Against this backdrop, the US economy grew by $0.7 \%$ in the second quarter of this year, slightly more strongly than in the previous quarter.
After a quarter-on-quarter increase of $1.5 \%$ in the first quarter of this year, the Chinese economy only grew by $0.7 \%$ in the spring. In addition to weakening world trade and the global economy, this is particularly due to the unresolved upheavals in the domestic real estate sector, especially as the government's efforts to provide support in this area have been very modest.
After Latin America's economies grew by $1.6 \%$ in 2023 compared to the previous year, or roughly one percentage point slower than the average since the turn of the millennium, growth has recently picked up again somewhat. Many central banks in the region reacted to rising inflation in the wake of the COVID-19 pandemic earlier than the Fed and ECB and were already able to reverse course last year in favour of a somewhat looser monetary policy, which is giving the economies a boost.
The international capital markets generally performed well in this difficult environment in the first half of the year. The US S\&P 500 performed the best of all equity markets, increasing by $14.5 \%$ (through 30 June 2024, all performance figures calculated in US dollars), benefiting significantly from the strong performance of individual technology companies in conjunction with the euphoria surrounding the topic of artificial intelligence. Shares from the industrialised countries (MSCI World: +10.8\%) performed slightly worse than the S\&P, while shares from the eurozone (Euro Stoxx: +2.5\%) and Germany (DAX: $+5.4 \%$ ) lagged well behind. The same was true of the Asian equity markets (MSCI Asia ex Japan: +8.6\%), Chinese equities (MSCI China: $+3.5 \%$ ) and Latin American equities in particular (MSCI Latin America: -18.2\%). Hopes at the end of last year that the US Federal Reserve could cut interest rates earlier than previously expected pushed the yield on 10-year US government bonds down significantly over the course of the fourth quarter of 2023. Inflation, which subsequently proved to be more persistent, and the associated postponement of the decision to begin cutting interest rates in the United States caused yields to rise from $3.88 \%$ to $4.40 \%$ in the first half of 2024. Although the ECB initiated a turnaround in interest rate policy at the beginning of June by lowering the deposit rate from $4.00 \%$ to $3.75 \%$, the yield on 10-year German government bonds also rose from $2.02 \%$ to $2.50 \%$ during this period.
At the beginning of 2024, the insurance industry was characterised by weak economic development and only slowly declining inflation. This had a particularly negative impact on the single premium business in life insurance and led to an overall decline in new business. In property/casualty insurance, on the other hand, downstream infla-tion-related increases led to solid growth in premium income.
Business performance
Group's course of business
- Insurance revenue up $14.2 \%$ adjusted for currency effects
- Large losses remained within the expected budget for the first half of the year
- Combined ratio down, partly as a result of measures to improve profitability
KEY GROUP FIGURES
| EUR million | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance revenue | 23,606 | 20,862 | $+13.2 \%$ |
| Insurance service result | 2,320 | 1,627 | $+42.5 \%$ |
| Net insurance financial and investment result before currency effects | 784 | 760 | $+3.1 \%$ |
| of which investment result | 3,434 | 2,506 | $+37.1 \%$ |
| of which net insurance financial result before currency effects | $-2,651$ | $-1,745$ | $-51.9 \%$ |
| Operating profit/loss (EBIT) | 2,515 | 1,957 | $+28.5 \%$ |
| Combined ratio (property/casualty only, net/gross) in \% | 91.2 | 93.7 | $-2.5$ ppts |
MANAGEMENT METRICS
| $\%$ | 6M 2024 | 6M 2023* | $+/-$ |
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects) | 14.2 | 10.7 | $+3.5$ ppts |
| Group net income in EUR billion | 1.1 | 0.8 | $+31.8 \%$ |
| Return on equity | 20.3 | 18.5 | $+1.8$ ppts |
- Adjusted in accordance with IAS 8.
Insurance revenue
The Talanx Group increased its insurance revenue by $13.2 \%$ in the first half of 2024 to EUR 23.6 (20.9) billion ( $14.2 \%$ adjusted for currency effects), with the Industrial Lines ( $13.7 \%$ ) and Retail International Divisions through organic growth and acquisitions in Latin America (48.8\%) particularly instrumental here. The Reinsurance Division also grew.
Insurance service result
The insurance service result improved substantially by $42.5 \%$ to EUR 2,320 (1,627) million. In the first half of 2024, large losses totalled EUR 750 (820) million, more than two thirds of which were losses from natural catastrophes. Large losses remained below the pro rata budget for the period of EUR 1,086 million. As usual, the Group recognised the expected budget for large losses in full. The combined ratio improved by 2.5 percentage points to $91.2 \%(93.7 \%)$.
Net insurance financial and investment result (before currency effects)
At the end of the first half of 2024, the net investment result was EUR 3,434 (2,506) million, $37.1 \%$ higher than in the prior-year period. The net investment result for own risk improved to EUR 2,186 million (equal to $+27 \%$ ). Growth in extraordinary investment income totalled $66 \%$, while ordinary investment income rose by $15 \%$. The net insurance financial result adjusted for currency effects, which includes the unwinding of discounted technical provisions and policyholder participation in the net investment result, including income from unithinked insurance contracts, was EUR $-2,651(-1,745)$ million. Overall, the net insurance financial and investment result before currency effects rose slightly by $3.1 \%$ to EUR 784 (760) million.
Operating profit and Group net income
Operating profit (EBIT) rose by $28.5 \%$ to EUR 2,515 (1,957) million. The increase is primarily due to the higher EBIT achieved in the Industrial Lines (+60.2\%), Retail International Divisions (+70.6\%) and Property/ Casualty Reinsurance segment ( $+99.4 \%$ ). For the first time, Group net income in a half-year period exceeded EUR 1 billion, totalling EUR 1.1 (0.8) billion. It was thus $31.8 \%$ higher than in the same period of the prior year. This was primarily due to organic growth and to profitability measures of the business. Return on equity in the reporting period was $20.3 \%(18.5 \%)$. This puts it above the strategic target of "roughly $15 \%$ ".
Performance of the Group's Divisions
At a strategic level, Talanx divides its business into seven reportable segments: Industrial Lines, Retail Germany (divided into Property/ Casualty and Life Insurance), Retail International, Property/Casualty Reinsurance, Life/Health Reinsurance and Corporate Operations. There have been no changes since the Group reported on the structure and scope of business in the 2023 Talanx Group Annual Report.
Industrial Lines
- Double-digit growth in insurance revenue due to rate increases and new business
- Insurance service result improved due to continued decline in frequency losses
- Investment result significantly above prior-year level
KEY FIGURES FOR THE INDUSTRIAL LINES DIVISION
| EUR million | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance revenue | 4,798 | 4,221 | $+13.7 \%$ |
| Insurance service result | 429 | 292 | $+47.0 \%$ |
| Net insurance financial and investment result before currency effects | 68 | 49 | $+39.5 \%$ |
| of which investment result | 186 | 108 | $+72.5 \%$ |
| of which net insurance financial result before currency effects | $-118$ | $-59$ | $-99.9 \%$ |
| Operating profit/loss (EBIT) | 305 | 190 | $+60.2 \%$ |
MANAGEMENT METRICS FOR THE INDUSTRIAL LINES DIVISION
| $\%$ | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects) | 13.9 | 11.0 | $+2.9$ ppts |
| Combined ratio (net/gross) | 91.1 | 93.1 | $-2.0$ ppts |
| Return on equity | 15.7 | 12.8 | $+2.8$ ppts |
The Division pools global activities relating to industrial insurance within the Talanx Group and operates on the German market and in over 175 countries through its foreign branches, subsidiaries, affiliates and network partners.
Insurance revenue
Insurance revenue for the Division amounted to EUR 4.8 (4.2) billion as at 30 June 2024, a substantial increase of $13.7 \%$ ( $13.9 \%$ after adjustment for currency effects). The premium increases resulted primarily from growth in the property, specialty and liability business through rate increases and new business.
Insurance service result
At EUR 429 (292) million, the net insurance service result in the Division was up significantly on the previous year. The loss ratio improved to $75.0 \%(76.1 \%)$ due to a further decline in frequency losses. The expense ratio also decreased to $16.1 \%(17.0 \%)$. This resulted in an improved combined ratio of $91.1 \%(93.1 \%)$ for the Industrial Lines Division.
Net insurance financial and investment result (before currency effects)
At EUR 186 (108) million, the investment result was significantly higher than in the prior-year period due to an increased investment volume and higher current interest income.
The development of the net insurance financial result to EUR -118 $(-59)$ million was in line with expectations in the current interest rate environment. Other income/expenses declined to EUR -171 (-155) million due to a growth-related increase in costs.
Operating profit and Group net income
As a result of the increased net insurance service result and net investment result, operating profit for the Division totalled EUR 305 (190) million and was therefore significantly higher than in the prioryear period. Group net income amounted to EUR 223 (151) million.
Retail Germany
Property/Casualty Insurance
- Increase in insurance revenue in all lines
- Insurance service result heavily impacted by motor business and heavy rainfall in southern Germany
- Decrease in net investment result due to increased unwinding of the discount on the loss reserve as a result of rising interest rates
KEY FIGURES FOR THE RETAIL GERMANY DIVISION -
PROPERTY/CASUALLY INSURANCE SEGMENT
| EUR million | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance revenue | 896 | 861 | $+4.1 \%$ |
| Insurance service result | 3 | 34 | $-91.5 \%$ |
| Net insurance financial and investment result. before currency effects | 31 | 40 | $-23.5 \%$ |
| of which investment result | 50 | 48 | $+3.4 \%$ |
| of which net insurance financial result before currency effects | $-19$ | $-8$ | $-139.4 \%$ |
| Operating profit/loss (EBIT) | 16 | 39 | $-57.8 \%$ |
MANAGEMENT METRICS FOR THE
PROPERTY/CASUALLY INSURANCE SEGMENT
| $\%$ | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Growth of insurance revenue | 4.1 | 7.6 | $-3.5$ ppts |
| Combined ratio (net/gross) | 99.7 | 96.1 | $+3.6$ ppts |
Insurance revenue
Insurance revenue in the Property/ Casualty Insurance segment rose by $4.1 \%$ to EUR 896 (861) million. Growth was achieved particularly in the corporate customers/liberal professions and motor business as well as in the biometric core business of bancassurance.
Insurance service result
In the current financial year, the insurance service result declined compared to the prior-year period to EUR 3 (34) million. This was primarily due to the heavy rainfall event in southern Germany and the further increase in losses in motor business.
The (net) combined ratio rose by 3.6 percentage points from $96.1 \%$ to $99.7 \%$.
Net insurance financial and investment result (before currency effects)
The net insurance financial and investment result declined to EUR 31 (40) million due to higher expenses for unwinding the discount on the loss reserve as a result of the rise in interest rates.
Operating profit
Operating profit declined to EUR 16 (39) million, primarily due to increased losses in motor.
Life Insurance
- Increase in insurance revenue
- Rise in net investment income thanks to higher extraordinary net income
- EBIT increase primarily due to higher interest income on bank deposits
KEY FIGURES FOR THE RETAIL GERMANY DIVISION LIFE INSURANCE SEGMENT
| EUR million | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance revenue | 898 | 861 | $+4.3 \%$ |
| Insurance service result | 142 | 145 | $-2.4 \%$ |
| Net insurance financial and investment result before currency effects | 6 | 30 | $-80.9 \%$ |
| of which investment result | 1,822 | 1,237 | $+47.3 \%$ |
| of which net insurance financial result before currency effects | $-1,816$ | $-1,207$ | $-50.4 \%$ |
| Operating profit/loss (EBIT) | 128 | 111 | $+15.4 \%$ |
MANAGEMENT METRICS FOR THE LIFE INSURANCE SEGMENT
| $\%$ | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Growth of insurance revenue | 4.3 | $-5.5$ | $+9.9$ ppts |
| New business value (net) in EUR million | 127 | 148 | $-14.5 \%$ |
Insurance revenue
Insurance revenue in the Life Insurance segment rose by $4.3 \%$ to EUR 898 (861) million. This was primarily due to growth in new business in the biometric core business of bancassurance and pension products.
The new business value fell by $14.5 \%$ to EUR 127 (148) million.
Insurance service result
The insurance service result remained stable at EUR 142 (145) million.
Net insurance financial and investment result (before currency effects)
The net insurance financial and investment result (before currency effects) decreased to EUR 6 (30) million as a whole. This was primarily due to improved net investment income of EUR 593 (483) million and higher income from unit-linked insurance contracts of EUR 1,229 (754) million. Policyholders participated in these results, putting the insurance financial result before currency effects including net income from unit-linked life insurance contracts at EUR $-1,816(-1,207)$ million.
Operating profit
Operating profit (EBIT) in the Life Insurance segment increased by $15.4 \%$ to EUR 128 (111) million due to higher interest income on bank deposits.
Retail Germany Division as a whole
RETURN ON EQUITY FOR THE RETAIL GERMANY DIVISION AS A WHOLE
| $\%$ | 6M 2024 | 6M 2023* | $+/-$ |
|---|---|---|---|
| Return on equity | 10.4 | 11.8 | $-1.3$ ppts |
${ }^{*}$ Adjusted in accordance with IAS 8.
After taking into account taxes on income, financing costs and minority interests, Group net income fell to EUR 82 (88) million, meaning that the return on equity fell by 1.3 percentage points to $10.4 \%$, taking into account an increase in average equity.
Retail International
- Insurance revenue +48.8\% from organic growth and particularly from the first-time inclusion of the Liberty acquisitions
- Increase in Group net income of $+59 \%$ due to insurance service performance (combined ratio of $92.4 \%$ )
- Improved return on equity ( $14.7 \%$ ) despite significant equity financing of the Liberty acquisitions
KEY FIGURES FOR THE RETAIL INTERNATIONAL DIVISION
| EUR million | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance revenue | 4,595 | 3,087 | $+48.8 \%$ |
| Insurance service result | 385 | 185 | $+107.6 \%$ |
| Net insurance financial and investment result before currency effects | 200 | 157 | $+27.1 \%$ |
| of which investment result | 378 | 277 | $+36.4 \%$ |
| of which net insurance financial result before currency effects | $-178$ | $-120$ | $-48.7 \%$ |
| Operating profit/loss (EBIT) | 424 | 249 | $+70.6 \%$ |
MANAGEMENT METRICS FOR THE RETAIL INTERNATIONAL DIVISION
| $\%$ | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects, property/Casualty insurance) | 58.4 | 28.4 | $+30.0$ ppts |
| Combined ratio (net/gross, property/Casualty insurance) | 92.4 | 95.4 | $-3.0$ ppts |
| Growth of insurance revenue (adjusted for currency effects, life insurance) | 49.9 | 39.3 | $+10.6$ ppts |
| Return on equity | 14.7 | 12.0 | $+2.7$ ppts |
This Division bundles the Talanx Group's international retail business activities and is active in both Europe and Latin America. Following the signing of the contract for the acquisition of the Liberty Mutual companies in Brazil, Chile, Colombia and Ecuador in May 2023, the transaction in Brazil was completed in November 2023. The acquisition of the other Liberty Mutual companies in Chile, Colombia and Ecuador was finally successfully completed on 1 March 2024. HDI has thus strengthened its market position and become the secondlargest property insurer in the private customer market in Latin America.
Insurance revenue
Insurance revenue in the Division increased by $48.8 \%$ to EUR 4.6 (3.1) billion compared to the first half of 2023. Insurance revenue adjusted for currency effects was up $58.4 \%$ on the comparative period.
In the Europe region, insurance revenue rose by $15.1 \%$ to EUR 2.3 billion, driven primarily by the Polish company TUiR Warta S.A., which grew by $15 \%$ in both motor insurance and homeowners insurance after adjusting for currency effects. Insurance revenue in life insurance also saw significant growth at the Polish company TunZ Warta S.A., climbing to EUR 169 (135) million.
In the Latin America region, insurance revenue increased by 110.1\% year on year to EUR 2.3 (1.1) billion, primarily due to the first-time inclusion of the Liberty companies.
Insurance service result
The insurance service result in property insurance increased by EUR 191 million to EUR 320 million. The combined ratio of the property insurance companies fell by 3.0 percentage points year on year to $92.4 \%$, with the acquired Liberty companies being the main contributors here. Furthermore, the Chilean HDI Seguros also contributed to the improvement with extremely strong insurance service performance in motor insurance.
Net insurance financial and investment result (before currency effects)
Compared to the first half of 2023, net investment income rose to EUR 378 (277) million. The contribution of the acquired Liberty companies as well as increased volumes and higher interest rates, particularly in Türkiye, led to an increase in ordinary net investment income. The result from unit-linked insurance policies reduced the net investment result by EUR 6 million. However, this effect was offset in the net insurance financial result by policyholder participation. In the net insurance financial result of property insurance companies, expenses from unwinding discounts on technical provisions increased by EUR 62 million.
Operating profit and Group net income
At EUR 424 (249) million, the Retail International Division achieved an operating profit (EBIT) that was $70.6 \%$ higher in the first half of 2024 than in the same period of the previous year. The operative improvement resulted both from the first-time inclusion of the acquired Liberty companies and from improvements in insurance service performance at HDI Sigorta A.Ş. in Türkiye and generally higher interest rates. Group net income after minority interests increased accordingly to EUR 224 (141) million with a return on equity of $14.7 \%(12.0 \%)$.
Additional key figures
RETAIL INTERNATIONAL DIVISION BY LINE OF BUSINESS AT A GLANCE
| EUR million | 6M 2024 | 6M 2025 | $x /-$ |
|---|---|---|---|
| Insurance revenue | 4,595 | 3,087 | 48.8\% |
| Property/Casualty | 4,212 | 2,827 | 49.0\% |
| Life | 383 | 260 | 47.5\% |
| Insurance service result | 385 | 185 | 107.6\% |
| Property/Casualty | 320 | 129 | 147.4\% |
| Life | 65 | 56 | 16.0\% |
| Net insurance financial and investment result before currency effects | 200 | 157 | 27.1\% |
| Property/Casualty | 182 | 146 | 24.4\% |
| Life | 20 | 13 | 50.5\% |
| Other | $-2$ | $-2$ | 9.6\% |
RETAIL INTERNATIONAL DIVISION BY REGION AT A GLANCE
| EUR million | 6M 2024 | 6M 2025 | $x /-$ |
|---|---|---|---|
| Insurance revenue | 4,595 | 3,087 | 48.8\% |
| of which Europe | 2,289 | 1,990 | 15.1\% |
| of which Latin America | 2,306 | 1,098 | 110.1\% |
| Insurance service result | 385 | 185 | 107.6\% |
| of which Europe | 179 | 105 | 71.0\% |
| of which Latin America | 206 | 81 | 155.1\% |
| Net insurance financial and investment result before currency effects | 200 | 157 | 27.1\% |
| of which Europe | 133 | 115 | 15.6\% |
| of which Latin America | 71 | 46 | 54.6\% |
| Operating profit/loss (EBIT) | 424 | 249 | 70.6\% |
| of which Europe | 259 | 179 | 44.3\% |
| of which Latin America | 186 | 96 | 93.2\% |
Reinsurance
Property/Casualty Reinsurance
- Insurance revenue (gross) increased significantly by $8.8 \%$ to EUR 9.1 billion
- Large losses in the first half of the year within the expected budget; increased losses from secondary risks
- Combined ratio of $87.8 \%$
- Contractual service margin (CSM) from new business increased by $1.9 \%$
- Operating profit up 39.4\% year on year to EUR 1,173 million
KEY FIGURES FOR THE REINSURANCE DIVISION PROPERTY/CASUALTY REINSURANCE SEGMENT
| EURmillion | 6M 2024 | 6M 2023 | +/-- |
|---|---|---|---|
| Insurance revenue | 9,099 | 8,365 | $+8.8 \%$ |
| Insurance service result | 963 | 598 | $+61.2 \%$ |
| Net insurance financial and investment result before currency effects | 396 | 357 | $+11.2 \%$ |
| of which investment result | 816 | 641 | $+27.3 \%$ |
| of which net insurance financial result before currency effects | $-420$ | $-285$ | $-47.5 \%$ |
| Operating profit/loss (EBIT) | 1,173 | 841 | $+39.4 \%$ |
MANAGEMENT MSTRICS FOR THE
PROPERTY/CASUALTY REINSURANCE SEGMENT
| $\%$ | 6M 2024 | 6M 2023 | +/-- |
|---|---|---|---|
| Combined ratio (net/net) | 87.8 | 91.7 | $-3.9$ ppts |
Business performance
On the basis of the continued favourable price level in the Property/ Casualty Reinsurance segment, we continued to significantly expand our portfolio and achieved a solid result in the first half of the year.
We achieved an inflation- and risk-adjusted price increase of $2.3 \%$ for renewed business in the main contract renewals of traditional property and casualty reinsurance as at 1 January of this year. The renewed volume increased by $6.9 \%$. The market environment for renewals proved to be more stable than in the previous year. At the same time, demand for reinsurance cover increased, which was mainly limited to capacity from existing market participants.
With regard to the renewals as at 1 April 2024, which traditionally relate to business in the Asia-Pacific region and North America as well as parts of the specialty business, we were able to achieve slightly improved risk-adjusted prices and conditions overall. The inflation- and risk-adjusted price increase of the renewed business totalled $1.5 \%$. The renewed volume increased by $7.1 \%$.
Thanks to an underwriting approach that focuses on quality, the contractual service margin (CSM) from new business rose by $1.9 \%$ to EUR 1,864 million in the first half of the year. The net loss component (LC) from new business was EUR 16 (35) million.
Insurance revenue
Insurance revenue (gross) in the Property/Casualty Reinsurance segment increased significantly by $8.8 \%$ to EUR 9.1 (8.4) billion in the first half of 2024. At constant exchange rates, growth would have amounted to $10.1 \%$.
Insurance service result
Spending for large losses in the first half of the year came to EUR 567 (607) million, staying within our budget of EUR 801 million for the first six months of the year.
The largest single net losses in the first half of the year were the flooding caused by heavy rainfall in southern Germany at EUR 120 million, the unrest in the French overseas territory of New Caledonia at EUR 82 million, the flooding following heavy rainfall in Dubai and other regions of the United Arab Emirates at EUR 82 million and flooding following heavy rainfall in Brazil at EUR 47 million. In addition, expected losses from the bridge collapse in Baltimore are still comfortably covered by the remaining large loss budget, although it is still not possible to determine a specific figure at this time. The result in the Property/Casualty Reinsurance segment is naturally influenced by prior-year events. As expected, the run-off result was also positive in the current reporting period. In the reporting period, it includes a negative development of large losses (e.g. hail events in Italy in 2023) and a significant increase in provisions for the conflict in Ukraine.
The insurance service result (net) increased by $61.2 \%$ to EUR 963 (598) million, reflecting the strong earnings situation in insurance service. The combined ratio improved to $87.8 \%$ (91.7\%) and was thus in line with our expectations of less than $89 \%$ for the year as a whole.
Net insurance financial and investment result (before currency effects)
Investment income in the Property/Casualty Reinsurance segment increased by $27.3 \%$ to EUR 816 (641) million. The insurance financial result, adjusted for currency effects, amounted to EUR -420 (-285) million.
Operating profit
Operating profit (EBIT) increased by 39.4\% to EUR 1,173 (841) million.
Life/Health Reinsurance
- Insurance revenue declined slightly by 2.3\% to EUR 3.8 million
- Continued demand for longevity cover and financial solutions
- Contractual service margin (CSM) from new business totalled EUR 185 million
- Operating profit declined 4.5\% year on year to EUR 497 million
KEY FIGURES FOR THE REINSURANCE DIVISION LIFE/HEALTH REINSURANCE SEGMENT
| EUR million | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance revenue | 3,817 | 3,908 | $-2.3 \%$ |
| Insurance service result | 448 | 481 | $-6.9 \%$ |
| Net insurance financial and investment result before currency effects | 131 | 167 | $-21.4 \%$ |
| of which investment result | 211 | 225 | $-6.1 \%$ |
| of which net insurance financial result before currency effects | $-80$ | $-58$ | $-38.2 \%$ |
| Operating profit/loss (EBIT) | 497 | 521 | $-4.5 \%$ |
MANAGEMENT METRICS FOR THE LIFE/HEALTH REINSURANCE SEGMENT
| $\%$ | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Insurance service result | 448 | 481 | $-6.9 \%$ |
Business performance
The Life/Health Reinsurance segment performed as expected in the first six months of the year.
The contractual service margin (CSM) from new business came to EUR 185 (152) million. In addition, contract extensions and changes in existing business led to a significant increase in the net contractual service margin (CSM) to EUR 6,393 million. The net loss component (LC) from new business was EUR 10 million.
Insurance revenue
Insurance revenue (gross) in the Life/Health Reinsurance segment declined by $2.3 \%$ to EUR 3.8 (3.9) billion; adjusted for currency effects, this would have translated into a decline of $2.5 \%$.
We continue to see demand in the area of financial solutions and were able to secure new business in the first half of 2024, including in the United States. Growth in longevity cover was moderate, as expected, with growing interest in markets outside the UK, such as the United States, Australia, Europe and Asia.
The traditional reinsurance business in the area of mortality and morbidity risks performed as expected overall, with solid premiums from the health insurance business in Latin America and low-volume new business in Europe and the Middle East, among other factors.
Insurance service result
As expected, the insurance service result (net) fell by $6.9 \%$ to EUR 448 (481) million and exceeded the pro rata value of the annual target of more than EUR 850 million.
Net insurance financial and investment result (before currency effects)
Net investment income for the Life/Health Reinsurance segment fell by $6.1 \%$ to EUR 211 (225) million. The net insurance financial result before currency effects came to EUR-80 ( -58 ) million.
Operating profit
Operating profit (EBIT) fell by $4.5 \%$ to EUR 497 (521) million.
Reinsurance Division as a whole
RETURN ON EQUITY FOR THE REINSURANCE DIVISION AS A WHOLE
| $\%$ | 6M 2024 | 6M 2023 | $+/-$ |
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects) | 6.1 | 5.4 | +0.7 ppts |
| Return on equity | 22.8 | 21.5 | +1.4 ppts |
Pro rata Group net income in the Reinsurance Division came to EUR 583 (484) million in the first half of 2024, with return on equity rising by 1.4 percentage points to $22.8 \%(21.5 \%)$.
Corporate Operations
- Insurance revenue from intragroup acquisitions grew to EUR 576 (533) million
- At EUR 9 (12) million, insurance service result declined slightly
- Investments for own risk in the Group up 2.5\% to EUR 139 billion
The Group's reinsurance specialists
Insurance revenue from intragroup acquisitions in the Corporate Operations segment amounted to EUR 576 (533) million in the first half of 2024 and resulted from reinsurance cessions in the Industrial Lines, Retail Germany and Retail International Divisions. The insurance service result in the Corporate Operations segment fell slightly to EUR 9 (12) million in the first half of 2024. Large losses totalling EUR 17 million, including as a result of the floods in Brazil, were covered by the segment's pro rata large loss budget for the period.
The Group's investment specialists
In cooperation with its subsidiary Ampega Investment GmbH, Ampega Asset Management GmbH is chiefly responsible for handling the management and administration of the Group companies' investments and provides related services such as investment accounting and reporting. The Group's investments for own risk increased to EUR 139 (135) billion compared to the end of 2023. The Ampega companies together accounted for a total of EUR 36 (27) million of the segment's operating profit in the first half of 2024.
As an investment company, Ampega Investment GmbH manages retail and special funds and provides financial portfolio management services for institutional clients. It focuses on portfolio management and investment administration. The year 2024 began with the expectation of global interest rate cuts, starting with the US Federal Reserve. A total of up to six interest rate cuts were expected for the year as a whole, and this expectation caused share prices to rise almost unabated around the world in the first half of the year. The total value of assets managed by Ampega Investment GmbH rose by $7.6 \%$ to EUR 50.7 (47.1) billion compared to the figure at the beginning of the year. At EUR 10.9 (13.1) billion, slightly more than one fifth of the total value is managed on behalf of Group companies using special funds and direct investment mandates. Of the remainder, EUR 29.0 (24.0) billion was attributable to institutional third-party clients and EUR 10.8 (10.0) billion to the retail business. The latter is offered not only through the Group's own distribution channels and products such as unit-linked life insurance, but also via external asset managers and banks.
Operating profit
The operating profit in the Corporate Operations segment rose slightly to EUR 17 (16) million in the first half of 2024. Group net income attributable to shareholders of Talanx AG for this segment amounted to EUR -29 (-36) million after financing costs in the first half of 2024 .
Assets, liabilities and financial position
Assets and liabilities
- Total assets up EUR 4.6 billion to EUR 174.0 billion
- Investments account for $88 \%$ of total assets
Significant changes in the asset structure
The EUR 4.6 billion increase in our total assets to EUR 174.0 billion is primarily attributable to the increase in investments for own risk (up EUR 3.4 billion) and investments for the account and risk of life insurance policyholders (up EUR 1.1 billion). "Liabilities from insurance contracts issued" rose in line with the increase in "Investments for the account and risk of life insurance policyholders", which include investments for unit-linked insurance products. The increase in goodwill resulted from the acquisition of the Liberty Group in the reporting year.
Changes in investments
The global economic situation cooled further in the first half of 2024 due to ongoing geopolitical tensions, high inflation and restrictive monetary policy. Despite the difficult conditions, the international capital markets remained stable overall in the first half of the year.
The value of the total investment portfolio rose to EUR 152.4 (147.9) billion as at the middle of 2024. Investments for own risk increased by $2.5 \%$ to EUR 138.8 (135.4) billion. The increase in the value of the portfolio is mainly due to inflows from premium income as well as currency effects. These inflows more than compensated for the decline in value due to the rise in interest rates. While the ECB and other central banks cut their key interest rates slightly, interest rates in our main currency areas continued to rise across the board, with the exception of very short maturities. In addition, the acquisition of the Liberty Group, among other factors, led to an increase in investments (increase of EUR 518 million).
Investments for the account and risk of life insurance policyholders increased by EUR 1.1 billion to EUR 13.6 (12.5) billion.
Accounting for roughly $81.8 \%$ of the total, debt instruments remained the most important asset class in the first half of 2024. Reinvestments were mostly made in this asset class, taking the existing investment structure into account. The asset class contributed EUR 2.0 (1.7) billion to ordinary earnings, with the figure being almost totally reinvested in the reporting period.
A broad-based system designed to limit accumulation risk resulted in a balanced mix of investments.
Our investment activities are bounded by the Group's internal risk model and the individual companies' risk budgets. In accordance with our asset/liability management guidelines and the individual companies' risk-bearing capacity, we continued to optimise and improve the portfolios as part of individual company strategies. As far as matching currency cover is concerned, US dollar-denominated investments continue to account, virtually unchanged, for the largest share of the Talanx Group's foreign currency portfolio, at $23 \%$ (20\%). Sizeable exposures - amounting to $9 \%$ ( $9 \%$ ) of total investments - are also held in pound sterling, Polish zloty and Australian dollars. The total share of investments for own risk in foreign currencies was $41 \%$ $(40 \%)$ as at the reporting date.
The equity allocation ratio (equity ratio of listed securities) was $0.8 \%$ $(1.2 \%)$ at the end of the six-month period.
BREAKDOWN OF ASSETS FOR OWN RISK
BREAKDOWN OF ASSETS FOR OWN RISK BY ASSET CLASS
| EUR million | 2024 | 2023 | ||
|---|---|---|---|---|
| Investment property | 6,333 | $5 \%$ | 6,230 | $5 \%$ |
| Shares in affiliated companies and participating interests | 1,090 | $1 \%$ | 1,105 | $1 \%$ |
| Shares in associates and joint ventures | 2,336 | $2 \%$ | 2,249 | $2 \%$ |
| Financial instruments measured at cost | 942 | $1 \%$ | 954 | $1 \%$ |
| Financial instruments measured at fair value through other comprehensive income | ||||
| Debt instruments | 111,135 | $80 \%$ | 107,687 | $80 \%$ |
| Equity instruments | 1,031 | $1 \%$ | 1,522 | $1 \%$ |
| Financial instruments at fair value through profit or loss | ||||
| Debt instruments | 1,486 | $1 \%$ | 1,429 | $1 \%$ |
| Equity instruments | 333 | $0 \%$ | 322 | $0 \%$ |
| Derivatives (assets) | 347 | $0 \%$ | 415 | $0 \%$ |
| Funds classified as at fair value through profit or loss | 9,223 | $7 \%$ | 8,906 | $7 \%$ |
| Short-term investments | 2,094 | $2 \%$ | 2,233 | $2 \%$ |
| Investments related to investment contracts | 2,077 | $1 \%$ | 1,971 | $1 \%$ |
| Infrastructure investments (other investments) | 350 | $0 \%$ | 366 | $0 \%$ |
| Investments for own risk | 138,778 | $100 \%$ | 135,390 | $100 \%$ |
| Derivatives (liabilities) | $-313$ | $13 \%$ | $-276$ | $12 \%$ |
| Liabilities related to investment contracts | $-2,087$ | $87 \%$ | $-1,980$ | $88 \%$ |
| Liabilities related to Investments | $-2,400$ | $100 \%$ | $-2,256$ | $100 \%$ |
Debt instruments
The portfolio of debt instruments was up by EUR 3.5 billion in the first half of the year to total EUR 113.6 (110.1) billion at the end of the six-month period. At $82 \%(81 \%)$ of total investments, this asset class represents the most significant share of our investments for own risk by volume. Debt instruments are divided into the "Financial instruments at amortised cost", "Financial instruments measured at fair value through other comprehensive income" and "Financial instruments measured at fair value through profit or loss" categories. In accordance with the business model, the Group holds only a small portfolio of financial instruments measured at amortised cost.
"Financial instruments measured at fair value through OCI" accounted for $98 \%$ ( $98 \%$ ) of the total portfolio of debt instruments and increased by EUR 3.4 billion to EUR 111.1 (107.7) billion. Government bonds, corporate bonds, German covered bonds (Pfandbriefe) and other similar bonds accounted for the majority of these investments. This increase is due to active investment activity. Valuation reserves recognised in other comprehensive income, which include net unrealised gains and losses, amounted to EUR -12.5 (-10.9) billion. After interest rates had generally fallen slightly at the end of 2023, they rose again in the first half of 2024 due to ongoing inflation and the delayed turnaround in interest rate policy in the United States and elsewhere.
The "Debt instruments measured at fair value through profit or loss" contained primarily corporate bonds. Total holdings in debt instruments in this category amounted to EUR 1.5 (1.4) billion as at the end of the six-month period, or $1 \%(1 \%)$ of total holdings in the debt instrument asset class.
Investments made in debt instruments in the first half of 2024 continued to focus on highly rated government bonds or securities from issuers with a similar credit quality. Holdings of AAA-rated debt instruments amounted to EUR 35.6 (34.5) billion as at the reporting date.
RATING STRUCTURE OF DEBT INSTRUMENTS
$\%$
$31 / 11$
$25 / 15$
The Talanx Group pursues a conservative investment policy over the long term. As a result, $76 \%$ ( $76 \%$ ) of debt instruments have at least an A rating. The Group has only a small portfolio of investments in government bonds from countries with a rating lower than A-. On a fair value basis, this portfolio amounts to EUR 6.0 (5.7) billion and therefore corresponds to a share of $4.3 \%(4.2 \%)$ of investments for own risk.
Equities and equity funds
As part of diversification, the Talanx Group also invests in equities. At the end of the reporting period, the value of the equities portfolio totalled roughly EUR 1.1 (1.6) billion.
The share of "Equity instruments measured at fair value through OCI" with a value of EUR 1.0 (1.5) billion saw a EUR 43 million decline in net valuation reserves to EUR 146 (189) million. The decline was primarily due to a reduction in the equity portfolio as part of a derisking programme. These valuation reserves are recognised in equity and cannot be subsequently recycled to the statement of income.
Real estate including shares in real estate funds
The investment property portfolio totalled EUR 6.3 (6.2) billion as at the reporting date. An additional EUR 1.8 (1.8) billion is held in real estate funds, which are reported under financial instruments as "Funds classified as at fair value through profit or loss".
This slight increase reflects our increasing involvement in this area. Depreciation of EUR 33 (29) million was recognised on investment property in the reporting period. There were no impairment losses.
In the first half of 2024, the Germany-wide transaction volume for real estate totalled EUR 15.7 billion, which corresponds to growth of $9.79 \%$ compared to the same half of the previous year. Due to the increasingly stabilised purchase price situation, sufficient risk discounts and a willingness to borrow, activity on the investment market picked up noticeably in the second quarter. Nevertheless, the transaction volume in 2024 is still expected to remain well below the
long-term average, at EUR 40 billion. Properties in need of refurbishment dominate the market. Demand is concentrated on stable property types such as logistics, residential and alternative uses, while there is a lack of large office and portfolio transactions in the core area. Prime yields for office properties in the "big seven cities" are stable, but risk premiums remain high. The trend towards highquality office space in top locations is continuing. Structural problems in the retail market are being overcome and transaction volumes are rising again. Demand and rents are rising in the logistics segment. In the residential property market, the transaction volume is down compared to the previous year.
As a result of the significant market corrections, external appraisers are now increasingly making downstream value adjustments to existing properties. Value adjustments were also made to our portfolio, which are below the general market average.
ESG remains an important topic in the property sector. The Talanx Group has now largely completed the transition to direct digital documentation of all key property consumption data. This data is essential for further ESG analyses of the portfolios.
Indirect real estate is geared towards the long term and is aimed at future capital income and capital appreciation. The portfolio consists of over 100 property funds. It is globally diversified with a focus on the regions of Europe, North America and Asia, of which Europe accounts for the majority of the allocation. Regional and sectoral diversification is intended to achieve a defensive and risk-moderate orientation of the portfolio while at the same time making a positive contribution to performance. However, even these investments are not immune to devaluations in the current market environment. The proportion of US office properties, which have experienced the most significant value correction to date, is less than one percent of the total net asset value of the Talanx Group's portfolio.
Infrastructure investments
The Talanx Group currently has a total of around EUR 1.7 (1.6) billion invested in infrastructure projects, both directly and indirectly.
Infrastructure investments have proven to be extremely resilient to market movements caused by energy price distortions and inflation and were able to continue this positive trend in the first half of 2024. This is primarily due to the fact that these assets address the basic needs of the population and therefore exhibit a less elastic demand. In addition, many projects generate secure income through regulatory measures, e.g. feed-in tariffs for renewable energies. This contributes to stable performance and reduces the risk for investors.
At the same time, infrastructure projects fit in quite well with the long-term investment horizon of an insurance company. In this area, we invest directly in selected projects via equity and debt investments. Our expertise enables us to generate illiquidity, complexity and duration premiums while at the same time increasing the diversification of our investments. These carefully selected projects offer attractive returns with an acceptable level of risk. Our diversified infrastructure portfolio currently includes financing and investments in wind and solar parks, power grids, utilities, transport projects, data centres, geothermal energy, critical communications infrastructure, fibre optic providers and public-private partnership (PPP) projects in Germany and other European countries.
In addition to direct infrastructure projects, we also invest in infrastructure via funds. The Talanx Group's indirect infrastructure portfolio is geared towards long-term capital income and value appreciation. It consists of a double-digit number of globally diversified infrastructure funds, with a focus on Europe, North America and Asia. The funds invest in various asset types in the infrastructure sector, with sustainable energies playing a special role. Through diversification at regional and sectoral level, the portfolio aims for a defensive and risk-moderate orientation with a positive contribution to performance.
The indirect infrastructure portfolio also continued to prove resilient and recorded single-digit percentage appreciation in the first half of 2024 .
Other alternative investments
The Talanx Group has a broadly diversified private equity portfolio with a long-term focus. The portfolio is characterised by exclusive market access, as it has been formed and continuously developed over decades. It has investments across almost all sectors, with a focus on technology, consumer goods, industry and healthcare. The investment styles are broadly diversified, with buyout funds accounting for the majority. The Talanx Group invests worldwide, focussing on the United States, Europe and Asia.
As a result of this investment strategy, the private equity portfolio continuously contributes to the Group's investment result. Following increases in value and above-average profit distributions in prior years, the private equity portfolio recently exhibited a slightly consolidated but nevertheless stable performance with continued significant distributions, albeit to a lesser extent than before. Highgrowth and highly profitable quality companies remain particularly easy to sell in the current market environment. However, exits are difficult for portfolio companies with average profitability or weaker growth in the current situation and many private equity managers are keeping their companies in the portfolio for longer. The intention is to sell the company under more favourable conditions. While exits are currently losing momentum, private equity managers are taking advantage of the partly declining valuations to make promising new investments. The market environment continues to be characterised by higher interest rates and high capital commitments for new acquisitions. The high financing costs result in higher equity ratios. We are currently observing some valuation corrections for individual portfolio companies, which are primarily due to managers' misjudgements for the post-Covid period; however, we currently expect the situation to remain stable overall at portfolio level. Further performance will depend on how interest rates and the prices of publicly traded companies develop. In the medium and long term, we believe there is potential for further increases in value and expect the private equity portfolio to make a high contribution to earnings this year too.
Net investment income
CHANGES IN NET INVESTMENT INCOME
| EUR million | 6M 2024 | 6M 2023 |
|---|---|---|
| Ordinary investment income | 2,657 | 2,264 |
| of which current income from interest | 1,964 | 1,651 |
| of which attributable to profit/loss from shares in associates | 53 | 20 |
| of which current income from investment funds | 158 | 149 |
| of which income from real estate | 230 | 217 |
| of which income from investment contracts | 149 | 87 |
| Realised net gains on disposal of investments | $-119$ | $-255$ |
| Gain/losses from fair value changes | 35 | 14 |
| Expenses from investment contracts | $-147$ | $-86$ |
| Depreciation on and impairment losses/reversals of impairment losses on investments | $-43$ | $-37$ |
| Other investment expenses | $-196$ | $-174$ |
| Net investment income for own risk | 2,186 | 1,726 |
| Net investment income for the account and risk of life insurance policyholders | 1,248 | 779 |
| Net investment income | 3,434 | 2,506 |
The net investment income for own risk amounted to EUR 2,186 (1,726) million in the first half of the year and was thus significantly higher than the figure in the prior year. The annualised return on investment for investments for own risk increased to $3.2 \%(2.7 \%)$.
Current income from interest increased by EUR 313 million on the prior year to EUR 1,964 billion. This increase was due to the growth in the portfolio and the sustained rise in interest rates, which we utilise for our new investments and reinvestments. It also impacted the average coupon on our bonds, which rose to $2.9 \%$ and was therefore higher than the average coupon in the same period of the previous year ( $2.6 \%$ ). Amortisation amounts also increased slightly, which is attributable to our portfolio of inflation-linked bonds, which contributed EUR 113 (109) million to the result.
The realised result from the disposal of investments improved by EUR 136 million compared to the first half of the previous year and amounted to a net value of EUR -119 (-255) million. Following the extensive portfolio measures taken in the prior year, trading activities and thus the realisation of losses declined in 2024.
Income from fair value changes was slightly positive at the end of the first half of the year at EUR 35 (14) million. The result from changes in the market value of "Real estate measured at fair value" of EUR -149 (-81) million included in this item was more than offset by positive market value developments in the other asset classes.
Total net depreciation and amortisation in the reporting period came to EUR 43 (37) million. EUR 49 (45) million of this related to depreciation on directly held real estate (EUR 33 million) and infrastructure investments (EUR 16 million). The change in provisions for expected credit losses (ECL) on investments that must be recognised in accordance with IFRS 9 resulted in net investment income of EUR 4 (9) million.
Net income from investments for the account and risk of life insurance policyholders, which is attributable exclusively to policyholders, improved by a substantial EUR 469 million to EUR 1,248 million thanks to positive capital market developments (30 June 2023: EUR 779 million). The offsetting item can be found under net insurance financial result with the inverse sign.
Net insurance financial and investment result before currency effects
As well as the EUR 460 million increase in net investment income from investments for own risk to EUR 2,186 (1,726) million, income from unit-linked insurance contracts attributable to policyholders also improved by EUR 469 million. Total net investment income thus rose to EUR 3,434 (+928) million. The net insurance financial result before currency effects moved in the opposite direction by EUR 905 million and totalled EUR -2,651 (-1,745) million in the first half of the year. This development was due to the EUR 311 million increase in expenses from the unwinding of the discount on insurance obligations (EUR -793 million; 30 June 2023: EUR -482 million) and the EUR 594 million increase in policyholder participation in net investment income, including the result from unit-linked life insurance (EUR -1,858 million; 30 June 2023: EUR -1,264 million).
Overall, the net insurance financial and investment result before currency effects thus improved by EUR 24 million to EUR 784 (760) million.
Financial position
Capital structure analysis
- Equity was up on the prior year at EUR 17.6 billion
- Insurance contract liabilities rose by EUR 3.2 billion to EUR 133.5 billion
Significant changes in the capital structure
Overall, net technical provisions (i.e. the balance of assets and liabilities from insurance/reinsurance contracts) rose by $2.2 \%$ or EUR 2.7 billion year on year to EUR 125.6 (122.9) billion. The increase was attributable to the liability for incurred claims (increase of EUR 3.4 billion). The liability for remaining coverage moved in the opposite direction (decline of EUR 0.7 billion). The increase in the liability for incurred claims is mainly attributable to the Property/Casualty Reinsurance and Industrial Lines segments, while the decrease in the liability for remaining coverage is primarily attributable to the Property/Casualty Reinsurance segment.
The contractual net service margin rose by EUR 1.7 billion to EUR 12.4 (10.7) billion and the overall net risk adjustment by EUR 0.1 billion to EUR 5.3 (5.1) billion. A total of EUR 9.3 (7.7) billion of the contractual service margin was attributable to the Reinsurance Division and EUR 2.8 (2.6) billion to the Retail Germany Division.
Equity
Changes in equity
Group equity (equity excluding non-controlling interests) increased by EUR 589 million (5.6\%) against 31 December 2023. This is partially due to net income, EUR 1,090 (827) million of which is attributable to our shareholders and which was allocated in full to retained earnings. It was offset by the EUR 607 (507) million dividend payment to the shareholders of Talanx AG in May of the reporting period.
In addition, accumulated other comprehensive income (other reserves) changed by EUR -21 million to EUR -590 million in comparison to 31 December 2023. The change in other reserves was primarily the result of the positive development of insurance financial income/ expenses from insurance contracts issued (increase of EUR 908 million) and the offsetting effect from the change in unrealised gains on investments (decrease of EUR 925 million).
CHANGE IN EQUITY
| EUR million | 30.06 .2024 | 31.12 .2023 | Change | $+/-\%$ |
|---|---|---|---|---|
| Subscribed capital | 323 | 323 | - | - |
| Capital reserves | 1,685 | 1,685 | - | - |
| Retained earnings | 9,618 | 9,050 | 568 | 6.3 |
| Accumulated other comprehensive income and other reserves | $-590$ | $-611$ | 21 | 3.4 |
| Group equity | 11,036 | 10,447 | 589 | 5.6 |
| Equity attributable to non-controlling interests | 6,569 | 6,347 | 222 | 3.5 |
| Total | 17,605 | 16,793 | 811 | 4.8 |
EQUITY BY DIVISION INCLUDING NON-CONTROLLING INTERESTS
| EUR million | 30.06 .2024 | 31.12 .2023 |
|---|---|---|
| Division | ||
| Industrial Lines | 3,035 | 2,664 |
| of which non-controlling interests | - | - |
| Retail Germany | 1,730 | 1,527 |
| of which non-controlling interests | 53 | 65 |
| Retail International | 3,729 | 3,211 |
| of which non-controlling interests | 426 | 422 |
| Reinsurance | 11,461 | 10,981 |
| of which non-controlling interests | 6,212 | 5,982 |
| Corporate Operations | $-2,203$ | $-1,419$ |
| of which non-controlling interests | - | - |
| Consolidation | $-148$ | $-169$ |
| of which non-controlling interests | $-123$ | $-122$ |
| Total equity | 17,605 | 16,793 |
| Group equity | 11,036 | 10,447 |
| Non-controlling interests | 6,569 | 6,347 |
Debt analysis
Subordinated liabilities amount to EUR 4.5 (5.3) billion as at the reporting date.
On 18 September 2023, Talanx AG drew down a EUR 750 million credit line in the form of a subordinated bond under the master agreement concluded with HDI V.a.G. in 2021. This credit line was repaid in full as at the reporting date.
Further information can be found in the Notes, Note 9 "Subordinated liabilities".
On 2 May 2024, Talanx AG concluded an agreement with a bank syndicate for a revolving credit facility with a value of EUR 250 million. The term of this agreement is five years plus the option to extend this twice for a further year. These had not been drawn down as at the end of the reporting period.
On 15 April 2024, Talanx AG issued a senior unsecured bond with a value of EUR 750 million as part of a private placement. The bond's sole subscriber was HDI V.a.G. The issued bond is listed on the Luxembourg Stock Exchange, matures on 23 July 2026, has a fixed coupon of $2.5 \%$ per annum and was issued at a price of $97.798 \%$.
Further information can be found in the Notes, Note 11 "Notes payable and loans".
Other
reports and declarations
Risk report
Risk environment
Our 2023 annual report describes our risk profile and the various types of risk in accordance with German Accounting Standard GAS 20. Risk reporting in this half-yearly financial report focuses on relevant changes to the risk position that have occurred since Talanx's 2023 Group annual report was prepared.
The summary of the overall risk position remains unchanged in this respect; there continues to be no discernible concrete risks that could have a material adverse effect on the Group's assets, liabilities, financial position or financial performance. The Talanx Group has established a functioning, appropriate system of governance and risk management, which is consistently refined and corresponds to demanding quality requirements and standards. We are therefore able to identify our risks in a timely manner, and to manage them effectively.
The following risks - listed in order of their importance - continue to determine the Group's overall risk profile: investment risks, premium and reserve risk in property/casualty insurance, natural catastrophe risk, life insurance underwriting risk, operational risk and default risk. Diversification is particularly important for managing our overall risk. We are broadly based both geographically and in terms of our business services. As a result, we consider ourselves to be well positioned to handle even an accumulated materialisation of risks.
Within market risk, credit risk is particularly important to us. It is mitigated and continuously monitored via Talanx's system of limits and thresholds and via the segment- and company-specific investment guidelines. Limits are set at portfolio, issuer/counterparty and in some cases also at asset class level, ensuring a broad mix and spread within the portfolio. Currency risk, particularly in relation to the US dollar, is also a significant factor within market risk. As changes in exchange rates can lead to incongruities between assets and liabilities, liabilities in foreign currencies are offset by assets in the same currency in order to limit the risk.
In terms of liquidity risk, we still assume that we would be able to comply with even relatively large, unexpected payout requirements within the required time frame.
There are no material changes to the estimates for operational risk.
Material external factors that affect risk management
Armed conflicts such as those currently taking place in Ukraine and the Middle East generally lead to uncertainty and greater volatility on capital markets. The resulting economic turbulence can hurt our customers, our subsidiaries and the Group. We are also monitoring developments in other regions of the world, in particular the consequences of a possible armed conflict between China and Taiwan as well as the policy of isolationism being pursued by individual EU member states and - depending on the outcome of the upcoming election - possibly in the United States.
Risks from current or future armed conflicts may particularly arise as a result of unforeseeable downstream effects and economic developments. Direct exposure, in terms of underwriting and investments, is moderate in the regions where armed conflicts are currently taking place.
The impact on the underwriting risk and investments as a whole is highly dependent on macroeconomic performance and on how business development progresses. In particular, risks can arise as a result of unforeseeable downstream effects or further escalations. For example, there could be declines in premiums and losses from cyberattacks or business interruption in connection with supply chain risks. Current developments include legal proceedings regarding leased aircraft that were located in Russia at the time war broke out and have not been returned since. We maintain close contact with both our customers and with intermediaries to stay up to date with important developments.
Many years of extremely low capital market interest rates, combined with the level of interest guarantees in insurance contracts, are continuing to pose substantial challenges to some areas of life insurance on account of the long-term investment structure.
The considerable rise in interest rates last year significantly reduced the fair values of investments, reducing the coverage of underwriting liabilities in terms of fair value (under German HGB accounting guidelines). However, we assume that shortfalls in the fair values of held-to-maturity financial instruments due exclusively to interest rates will continue to be classified as unproblematic for supervisory purposes. In the event of a fall in interest rates after the reporting date and possible further falls in the further course of the year, the unrealised losses are likely to decrease. In the event of a further rise in interest rates, on the other hand, it is likely that further unrealised losses would build up. Coverage of underwriting liabilities in terms of carrying amount and fair value is being closely monitored.
There is also a heightened lapse risk in the event of further interest rate increases. In the event of a significant increase in lapse rates, life insurers could possibly be forced to sell investments that have significantly lost market value due to the rise in interest rates in order to finance surrender payments due. Unrealised losses would be realised as a result. The unrealised losses were not subject to unscheduled amortisation as they are essentially interest-induced and are therefore not considered to be permanent. The lapse situation is monitored on an ongoing basis; appropriate measures are taken, if necessary.
Likewise, political and macroeconomic uncertainty, on both existing core markets and our target and future markets, pose risks to our assets, liabilities, financial position and financial performance.
Large loss events in various regions of the world had an impact on the Talanx Group. In terms of natural disasters, the first half of 2024 saw flood events in southern Germany in May and June, in Brazil in April and May and in Dubai in April. With regard to man-made large losses, the unrest in New Caledonia is worth mentioning, while the expected losses from the bridge collapse in Baltimore are still comfortably covered by the remaining large loss budget, although they still cannot be quantified due to the as yet unresolved question of culpability.
Furthermore, there is uncertainty regarding the development of the legal framework for our business activities in all the countries in which the Group operates. This continues to pose specific legal risks for our German life insurance companies. This also includes tax risks relating to the handling of certain capital investment instruments in the course of company audits as well as the handling in the annual financial statements of the companies in question.
Another specific risk is the political-economic situation in Italy, as the Group also holds direct investments in Italian securities that could be vulnerable to impairment. The scope and risks of these investments are limited by the internal system of limits and thresholds and by concentration/counterparty limits.
Outlook
Economic environment
The global economy will continue to face a variety of challenges in the coming quarters, which are likely to result in a fragile growth situation. In addition to the wars in Ukraine and the Middle East, geopolitical tensions (including China/Taiwan) and increasing restrictions on cross-border trade, the tightening of monetary policy in response to the sharp rise in inflation following the COVID-19 pandemic is particularly noteworthy. Its economic after-effects, for example in terms of banks' more cautious lending practices, continue to be clearly noticeable and are resulting in a subdued growth environment.
We expect the economic slowdown in the United States to continue in the coming quarters, although a comparatively robust labour market and the return of purchasing power accompanied by solid wage growth and declining inflation should prevent a severe recession. The presidential election in the United States in November poses an additional risk. In the eurozone, it is likely that the worst of the economic downturn is over. However, in view of the subdued global economic outlook, continued strong but weakening fiscal support and a historically high level of economic policy uncertainty (including in France), economic development is only expected to be modest. In view of a slowly shrinking population, economic growth in China is likely to stabilise at a level slightly below the level prior to the COVID-19 pandemic, with the path highly dependent on the Chinese government's willingness to support the economy.
Capital markets
Declining inflation rates in the United States and the eurozone are enabling central banks to respond to the weak economic environment to a limited extent. While the ECB already lowered its key interest rates for the first time since 2019 in June 2024, the Fed is likely to follow suit this autumn and also begin a gradual cycle of interest rate cuts. However, as inflation is unlikely to return to the low levels of the years prior to 2020 due to structural developments (including demographics, deglobalisation, and climate change), the scope for interest rate cuts remains limited. Both the equity and bond markets are therefore likely to see slight gains at best over the remainder of the year. Headwinds for the bond markets are also resulting from declining purchases by central banks and high government financing requirements.
Insurance industry
Overall, insurers expect significant premium growth both this year and next. On the investment side, the positive development of the equity market driven by the AI hype and valuation increases as well as rising bond yields continue to inspire confidence.
Anticipated financial development of the Group
We are making the following assumptions:
- moderate global economic growth
- inflation still high
- end of cycle of interest rate hikes
- no sudden upheavals on the capital markets
- no exchange rate shocks
- no significant fiscal or regulatory changes
- no extraordinarily high number of large losses
- no escalation of geopolitical tension
At the half-year point, we issue forecasts for the Talanx Group and its divisions for the key figures the Group uses to manage its business.
Talanx Group
MANAGEMENT METRICS
| EUR billion | Outlook for 2024 on the basis of 6 M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2025 Annual Report |
|---|---|---|---|
| high single-digit percentage |
high single-digit percentage |
high single-digit percentage |
|
| Group net income | $>1.7$ | $>1.7$ | $>1.7$ |
| Return on equity in \% | $-15$ | $-15$ | $-15$ |
Talanx can look back on an exceptionally strong first half of the year. The company is highly confident that it will generate Group net income of well over EUR 1,700 million in 2024. As with every forecast, this is also subject to the proviso that large losses do not significantly exceed the large loss budget, that there is no material turbulence on the capital markets and that there are no significant exchange rate fluctuations. Due to the Group's excellent business performance to date, the intention is to review the forecast after the third quarter. In the third quarter, results fluctuate more strongly than in other quarters of the year, depending on claims trends. This is particularly attributable to the hurricane season, which peaks in this quarter. This means that it will be possible to make more stable estimates of the full-year result after the end of the third quarter.
Industrial Lines
MANAGEMENT METRICS FOR THE INDUSTRIAL LINES DIVISION
| $\%$ | Outlook for 2024 on the basis of 6M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2023 Annual Report |
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects) | $\begin{gathered} \text { high } \ \text { single-digit } \ \text { percentage } \end{gathered}$ | $\begin{gathered} \text { high } \ \text { single-digit } \ \text { percentage } \end{gathered}$ | high single-digit percentage |
| Combined ratio (net/gross) | $<93$ | $<93$ | $<93$ |
| Return on equity | $\sim 13$ | $\sim 13$ | $\sim 13$ |
Retail Germany
Property/Casualty Insurance
MANAGEMENT METRICS FOR THE RETAIL GERMANY DIVISION PROPERTY/CASUALTY INSURANCE SEGMENT
| $\%$ | Outlook for 2024 on the basis of 6M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2023 Annual Report |
|---|---|---|---|
| Growth of insurance revenue | stable | stable | stable |
| Combined ratio (net/gross) | $<98$ | $<98$ | $<98$ |
Life Insurance
MANAGEMENT METRICS FOR THE RETAIL GERMANY DIVISION LIFE INSURANCE SEGMENT
| $\%$ | Outlook for 2024 on the basis of 6M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2023 Annual Report |
|---|---|---|---|
| Growth of insurance revenue | stable | stable | stable |
| New business value (net) in EUR million | $>300$ | $>300$ | $>300$ |
Retail Germany as a whole
MANAGEMENT METRIC FOR THE RETAIL GERMANY DIVISION AS A WHOLE
| $\%$ | Outlook for 2024 on the basis of 6M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2023 Annual Report |
|---|---|---|---|
| Return on equity | $>10$ | $>10$ | $>10$ |
Retail International
MANAGEMENT METRICS FOR THE RETAIL INTERNATIONAL DIVISION
| $\%$ | Outlook for 2024 on the basis of 6M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2023 Annual Report |
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects, property/Casualty insurance) | clear double-digit growth |
low double-digit growth |
low double-digit growth |
| Combined ratio (net/gross, property/Casualty insurance) | $<95$ | $<95$ | $<95$ |
| Growth of insurance revenue (adjusted for currency effects, life insurance) | clear double-digit growth |
mid single-digit percentage |
mid single-digit percentage |
| Return on equity | $>10$ | $>8.5$ | $>8.5$ |
In our forecast for 2024 in the 2023 annual report for the Retail International Division, we had expected growth of insurance revenue in the low double-digit percentage range for our property/casualty insurance business and in the mid single-digit percentage range for our life insurance business (adjusted for currency effects). This forecast was based on the expectation that the acquisition of the Liberty companies in Latin America in 2023 would not be legally finalised until the second quarter with regard to the national companies in Chile, Colombia and Ecuador. As this has now actually taken place with effect from I March 2024, we are now assuming - also buoyed by a favourable market environment in the Latin American markets clear double-digit growth of insurance revenue for both our property/ casualty insurance business and our life insurance business (adjusted for currency effects) and now expect to be able to achieve a return on equity of more than $10 \%$ instead of a return on equity of more than $8.5 \%$.
Reinsurance
Property/Casualty Reinsurance
MANAGEMENT METRICS FOR THE REINSURANCE DIVISION PROPERTY/CASUALTY REINSURANCE SEGMENT
| $\%$ | Outlook for 2024 on the basis of 6M 2024 | Outlook for 2024 on the basis of Q1 2024 | Forecast for 2024 from the 2023 Annual Report |
|---|---|---|---|
| Combined ratio (net/net) | $<89$ | $<89$ | $<89$ |
Life/Health Reinsurance
MANAGEMENT METRICS FOR THE REINSURANCE DIVISION LIFE/HEALTH REINSURANCE SEGMENT
| Outlook for 2024 on the basis of 6M 2024 |
Outlook for 2024 on the basis of Q1 2024 |
Forecast for 2024 from the 2023 Annual Report |
|
|---|---|---|---|
| Insurance service result | $>850$ | $>850$ | $>850$ |
Reinsurance Division as a whole
MANAGEMENT METRICS FOR THE REINSURANCE DIVISION AS A WHOLE
| Outlook for 2024 on the basis of 6M 2024 |
Outlook for 2024 on the basis of Q1 2024 |
Forecast for 2024 from the 2023 Annual Report |
|
|---|---|---|---|
| Growth of insurance revenue (adjusted for currency effects) |
$>5$ | $>5$ | $>5$ |
| Return on equity | $\sim 19$ | $\sim 19$ | $\sim 19$ |
Assessment of future opportunities and challenges
Opportunities have not changed significantly compared with the 2023 reporting period. For further information, please refer to Talanx's 2023 Group Annual Report.
Interim consolidated financial statements
PAGE
Consolidated balance sheet ..... 26
Consolidated statement of income ..... 28
Consolidated statement of comprehensive income ..... 29
Consolidated statement of changes in equity ..... 30
Consolidated cash flow statement ..... 34
Notes and disclosures ..... 35
Consolidated balance sheet
as at 30 June 2024
ASSETS
| EUR million | Notes | 30.06 .2024 | 31.12 .2023 | |
|---|---|---|---|---|
| A. Intangible assets | 1 | |||
| a. Goodwill | 1,649 | 1,611 | ||
| b. Other intangible assets | 762 | 782 | ||
| 2,410 | 2,393 | |||
| B. Insurance contract assets | 10 | 1,012 | 1,049 | |
| C. Reinsurance contract assets | 2 | 7,498 | 7,074 | |
| D. Investments | ||||
| a. Investment property | 7 | 6,333 | 6,230 | |
| b. Shares in affiliated companies, associated companies, joint ventures and participating interests | 3,426 | 3,355 | ||
| c. Other financial instruments | ||||
| i. Financial instruments measured at amortised cost | $3 / 6$ | 942 | 954 | |
| ii. Financial instruments measured at fair value through other comprehensive income | $4 / 6 / 7$ | 112,167 | 109,210 | |
| iii. Financial instruments measured at fair value through profit or loss | $5 / 7$ | 15,560 | 15,276 | |
| f. Other investments | 350 | 366 | ||
| Investments for own risk | 138,778 | 135,390 | ||
| E. Investments for the account and risk of life insurance policyholders | 13,625 | 12,478 | ||
| Investments | 152,403 | 147,868 | ||
| F. Cash at banks, cheques and cash-in-hand | 4,088 | 5,102 | ||
| G. Deferred tax assets | 1,336 | 1,358 | ||
| H. Other assets | 7 | 5,208 | 4,483 | |
| I. Non-current assets and assets of disposal groups classified as held for sale ${ }^{1}$ | 16 | 20 | ||
| Total assets | 173,972 | 169,347 |
[^0]
[^0]: ${ }^{1}$ For further information, see the "Non-current assets and disposal groups held for sale" section of these Notes.
EQUITY AND LIABILITIES
Consolidated statement of income
for the period from 1 January to 30 June 2024
CONSOLIDATED STATEMENT OF INCOME
[^0]
[^0]: 1 To illustrate the currency matching of technical liabilities by investments, the currency effects are first eliminated from the net insurance financial result by IFRS 17 and then shown in the currency result.
Consolidated statement of comprehensive income
for the period from 1 January to 30 June 2024
| EUR million | 6M 2024 | 6M 20231 |
|---|---|---|
| Net income | 1,707 | 1,388 |
| Items that will not be reclassified to profit or loss | ||
| Actuarial gains (losses) on pension provisions | ||
| Gains (losses) for the period recognised in other comprehensive income | 99 | 16 |
| Tax income (expense) | $-30$ | $-8$ |
| 69 | 8 | |
| Unrealised gains and losses on investments (equity instruments) | ||
| Gains (losses) for the period recognised in other comprehensive income | $-58$ | 68 |
| Tax income (expense) | 16 | $-18$ |
| $-42$ | 50 | |
| Exchange differences on translating foreign operations | ||
| Gains (losses) for the period recognised in other comprehensive income | 7 | $-4$ |
| Tax income (expense) | 1 | - |
| 8 | $-3$ | |
| Total items that will not be reclassified to profit or loss, net of tax | 35 | 55 |
| Items that may be reclassified subsequently to profit or loss | ||
| Unrealised gains and losses on investments (debt instruments) | ||
| Gains (losses) for the period recognised in other comprehensive income | $-1,747$ | 1,071 |
| Reclassified to profit or loss | 124 | 264 |
| Tax income (expense) | 481 | $-376$ |
| $-1,143$ | 959 | |
| Insurance finance income or expenses from insurance contracts issued | ||
| Gains (losses) for the period recognised in other comprehensive income | 1,462 | $-1,036$ |
| Reclassified to profit or loss | - | - |
| Tax income (expense) | $-335$ | 277 |
| 1,128 | $-759$ | |
| Insurance finance income or expenses from reinsurance contracts held | ||
| Gains (losses) for the period recognised in other comprehensive income | 3 | 19 |
| Reclassified to profit or loss | - | - |
| Tax income (expense) | $-27$ | 26 |
| $-24$ | 45 | |
| Exchange differences on translating foreign operations | ||
| Gains (losses) for the period recognised in other comprehensive income | 172 | $-82$ |
| Reclassified to profit or loss | 1 | $-1$ |
| Tax income (expense) | $-5$ | 63 |
| 169 | $-20$ | |
| Changes from cash flow hedges | ||
| Gains (losses) for the period recognised in other comprehensive income | $-30$ | 20 |
| Reclassified to profit or loss | $-7$ | $-17$ |
| Tax income (expense) | 10 | $-1$ |
| $-27$ | 2 | |
| Changes from equity method measurement | ||
| Gains (losses) for the period recognised in other comprehensive income | 16 | $-13$ |
| Reclassified to profit or loss | - | - |
| Tax income (expense) | - | - |
| 16 | $-13$ | |
| Total items that may be reclassified subsequently to profit or loss, net of tax | 119 | 214 |
| Other comprehensive income for the period, net of tax | 154 | 269 |
| Total comprehensive income for the period | 1,860 | 1,657 |
| of which attributable to non-controlling interests | 750 | 580 |
| of which attributable to shareholders of Talans AG | 1,111 | 1,077 |
[^0]
[^0]: ${ }^{1}$ Adjusted in accordance with IAS 8, see 2023 Annual Report, "Accounting policies" section of the Notes.
Consolidated statement of changes in equity
| EUR million | Subscribed capital | Capital reserves | Retained earnings | Unrealised gains and losses on investments |
|---|---|---|---|---|
| 2024 | ||||
| Balance at 01.01.2024 | 323 | 1,685 | 9,050 | $-5,897$ |
| Changes in ownership interest without a change in control | - | - | $-3$ | - |
| Other changes in basis of consolidation | - | - | - | - |
| Net income | - | - | 1,090 | - |
| Other comprehensive income | - | - | - | $-925$ |
| of which not eligible for reclassification | - | - | - | $-38$ |
| of which actuarial gains or losses on pension provision | - | - | - | - |
| of which currency translation | - | - | - | - |
| of which unrealised gains and losses on investments (equity instruments) | - | - | - | $-38$ |
| of which eligible for reclassification | - | - | - | $-887$ |
| of which unrealised gains and losses on investments (debt instruments) | - | - | - | $-887$ |
| of which finance gains and losses on insurance contracts issued | - | - | - | - |
| of which finance gains and losses on reinsurance contracts held | - | - | - | - |
| of which currency translation | - | - | - | - |
| of which change from cash flow hedges | - | - | - | - |
| of which change from equity method measurement | - | - | - | - |
| Total comprehensive income | - | - | 1,090 | $-925$ |
| Capital decreases | - | - | - | - |
| Dividends to shareholders | - | - | $-607$ | - |
| Unrealised gains and losses on disposal of investments (equity instruments) measured at fair value through other comprehensive income | - | - | 83 | - |
| Other changes outside profit or loss | - | - | 5 | - |
| Balance at 30.06.2024 | 323 | 1,685 | 9,618 | $-6,822$ |
| EUR million | Subscribed capital | Capital reserves | Retained earnings | Unrealised gains and losses on investments |
|---|---|---|---|---|
| 2023 | ||||
| Balance at 01.01.2023 ${ }^{1}$ | 317 | 1,394 | 7,998 | $-8,583$ |
| Changes in ownership interest without a change in control | - | - | - | - |
| Other changes in basis of consolidation | - | - | - | - |
| Net income | - | - | 827 | - |
| Other comprehensive income | - | - | - | 787 |
| of which not eligible for reclassification | - | - | - | 44 |
| of which actuarial gains or losses on pension provision | - | - | - | - |
| of which currency translation | - | - | - | - |
| of which unrealised gains and losses on investments (equity instruments) | - | - | - | 44 |
| of which eligible for reclassification | - | - | - | 743 |
| of which unrealised gains and losses on investments (debt instruments) | - | - | - | 743 |
| of which finance gains and losses on insurance contracts issued | - | - | - | - |
| of which finance gains and losses on reinsurance contracts held | - | - | - | - |
| of which currency translation | - | - | - | - |
| of which change from cash flow hedges | - | - | - | - |
| of which change from equity method measurement | - | - | - | - |
| of which other changes | - | - | - | - |
| Total comprehensive income | - | - | 827 | 787 |
| Capital increases | - | - | - | - |
| Dividends to shareholders | - | - | $-507$ | - |
| Unrealised gains and losses on disposal of investments (equity instruments) measured at fair value through other comprehensive income | - | - | 1 | - |
| Other changes outside profit or loss | - | - | 3 | - |
| Balance at 30.06.2023 | 317 | 1,394 | 8,322 | $-7,796$ |
[^0]
[^0]: ${ }^{1}$ Adjusted in accordance with IAS 8, see 2023 Annual Report, "Accounting policies" section of the Notes.
Consolidated cash flow statement
for the period from 1 January to 30 June 2024
The accompanying Notes form an integral part of the consolidated financial statements.
Notes and disclosures
Basis of preparation and application of IFRSs
General information
The consolidated half-yearly financial report as at 30 June 2024 was prepared in accordance with IAS 34 and with the International Financial Reporting Standards (IFRSs) applicable to interim reporting, as adopted by the European Union.
The accounting policies applied correspond to those of the previous consolidated financial statements and the corresponding interim reporting period, with the exception of the first-time application of new and amended standards, as explained in the section "Application of new and amended standards/interpretations".
The interim financial statements were prepared in euros (EUR). The amounts shown have been rounded to millions of euros (EUR million), unless figures in thousands of euros (EUR thousand) are required for reasons of transparency. Rounding differences may occur in the tables presented in this report. Amounts in brackets refer to the prior year.
Preparation of the consolidated financial statements requires management to make judgements, assumptions and estimates. These relate to the accounting policies applied, the carrying amounts of assets, liabilities, income and expenses that are recognised, and the disclosures made on contingent liabilities. Actual results may differ from these estimates. Please also refer to our comments in Note 10.
Estimates and the assumptions underlying them are reassessed continuously; they are based on past experience and on expectations of future events that currently appear reasonable. Revisions of estimates are recognised prospectively.
In line with IAS 34.41, we make greater use of estimation methods and assumptions when preparing the Group's interim financial reports than in our annual financial reporting. No amendments to standards with a material impact on the Group's assets, liabilities, financial position and financial performance were made in the current interim reporting period. Intrayear calculations of the tax expense (domestic income taxes, comparable taxes on income at foreign subsidiaries and changes in deferred taxes) apply the expected effective tax rate for the full year to net income. Extrapolations of pension provisions during the year recognise actuarial assessments of the effect of interest rate changes on pension liabilities as at the end of the quarter in other comprehensive income (other reserves). Other actuarial inputs are not updated in the course of the year.
Risks relating to the consequences of climate change are highly important for insurance companies' business models. Estimating the probability of occurrence of, and the size of the losses associated with, climate-change driven storms, flooding and droughts is a key element of our risk management system. It significantly impacts our underwriting policy in the area of natural hazard risks and requires adequate levels of risk capital to be held. In addition, physical risks such as extreme weather events and their consequences, and longterm changes in the climate and environmental conditions (e.g. amounts of rainfall, rising sea levels and increasing average temperatures), can affect the value of property that we hold or the measurement of securities in our investment portfolio.
Apart from the impact of these physical risks, measurement of our investment portfolio is also subject to transition risks resulting from climate change. Transition risks are defined as risks associated with the consequences of climate change that result from the shift to a low-carbon economy. This shift is essentially being initiated and underpinned by political regulation. Should the latter have an adverse effect on the issuers of the equities or corporate bonds in our investment portfolio, for example, this would also impact the value of these securities.
Overall, the evaluation of climate risks is taken into account when testing for impairment of non-financial assets, including goodwill in accordance with IAS 36, determining useful lives and the residual value of assets in accordance with IAS 16 or IAS 38, in the recognition and subsequent measurement of investments in accordance with IFRS 9 and when recognising provisions and disclosing contingent liabilities in accordance with IAS 37.
Estimation uncertainties also arose in the reporting period in connection with the conflict in Ukraine. We conducted probabilityweighted scenario analyses for all relevant business lines, taking currently available market insights into account, and then used these analyses to develop our own estimates as a basis for our reserving process. The main business lines affected as at the reporting date were political violence and other property coverage, political risk, marine and aviation. As at 30 June 2024, the Group had significantly increased its provisions for this loss complex compared to the prior year. The range of potential claims scenarios remains high, which could result in substantially higher claims expenses in future if adverse developments were to occur or unfavourable court rulings be handed down; however, these are not expected at present. Legal uncertainties continue to exist, particularly in connection with the status of leased aircraft that are still in Russia. Transactions with Russian cedants are not being continued, in line with the sanctions in force.
Foreign exchange differences arising on translation of foreign operations
Transactions in foreign currencies are generally translated into the functional currency of the units of the company in question at the exchange rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies on the reporting date are translated into the functional currency using the exchange rate prevailing on the reporting date. Gains or losses arising from this translation are reported under the net currency result. Exchange rate gains and losses from non-monetary position (e.g. equity instruments) classified as FVOCI are recognised in other comprehensive income and cannot be subsequently transferred to profit or loss.
Foreign currency items (including goodwill) at foreign subsidiaries in countries that do not use the euro as their national currency are translated into euros at the middle rates at the end of the reporting period. Foreign currency items in the statement of income are translated at their average exchange rates. All resulting exchange differences on translating foreign operations that are not attributable to non-controlling interests are recognised in other comprehensive income and presented in equity in the currency translation reserve.
EKCHANGE RATES FOR OUR KEY FOREIGN CURRENCIES
| EUR 1 corresponds to | Balance sheet (reporting date) | Statement of income (average) | |||
|---|---|---|---|---|---|
| 30.06.2024 | 31.12.2023 | 6M 2024 | 6M 2023 | ||
| AUD | Australia | 1.6073 | 1.6273 | 1.6406 | 1.6107 |
| BRL | Brazil | 5.8832 | 5.3625 | 5.5072 | 5.4805 |
| CAD | Canada | 1.4656 | 1.4651 | 1.4675 | 1.4586 |
| CLP | Chile | 1,021.8900 | 974.1800 | 1,018.2271 | 877.7371 |
| CNY | China | 7.7674 | 7.8454 | 7.8015 | 7.5131 |
| COP | Colombia | 4,454.0700 | 4,265.9400 | 4,245.6614 | 4,950.2757 |
| GBP | United Kingdom |
0.8461 | 0.8689 | 0.8556 | 0.8750 |
| MXN | Mexico | 19.5635 | 18.7337 | 18.5589 | 19.6652 |
| PLN | Poland | 4.3089 | 4.3386 | 4.3132 | 4.6201 |
| TRY | Türkiye | 35.1922 | 32.6830 | 34.2253 | 21.8850 |
| USD | USA | 1.0695 | 1.1051 | 1.0827 | 1.0785 |
Türkiye has been classified as hyperinflationary within the meaning of IAS 29 "Financial Reporting in Hyperinflationary Economies" for the purposes of financial reporting since the second quarter of 2022. As a result, companies that use the Turkish lira (TRY) as their functional currency must apply the provisions of IAS 29 for reporting periods ending on or after 30 June 2022. This means that the financial statements concerned are adjusted for the effects of inflation rather than recognised on the basis of historical cost. The consumer index used by the Turkish Statistical Institute (TURKSTAT) was 2,319.29 as at 30 June 2024 (31 December 2023: 1,859.38). Overall, a gain on the net monetary position of EUR 35 (26) million was recognised in other income/expenses for the period from 1 January to 30 June 2024. This includes a contribution to earnings after non-controlling interests of EUR +13 (+15) million.
Application of new and revised standards/interpretations
The Group applied the following revised IFRS standards as at 1 January 2024, which did not lead to any material effects on the consolidated financial statements:
- IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current
- IAS 1 Presentation of Financial Statements: Non-current Liabilities with Covenants
- IFRS 16 Leases: Lease Liability in a Sale and Leaseback
- IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements
Introduction of a global minimum tax
The Minimum Tax Act (abbreviated MinStG in German) came into force in Germany with effect from I January 2024. As a subgroup of the HDI Group, the Talanx Group falls within the scope of the regulations.
In accordance with the minimum taxation regulations, the Talanx Group is required to pay an additional tax for the difference between the effective tax rate per (tax) jurisdiction and the minimum tax rate of $15 \%$.
To recognise deferred tax assets and liabilities and certain disclosure requirements in connection with the implementation of the global minimum tax, the Talanx Group applies the temporary exemption in accordance with IAS 12.
Based on the data from the HDI Group's 2023 qualified Coun-try-by-Country Reporting (qCbCR) and the 2024 quarterly data, the Talanx Group was domiciled in 43 jurisdictions with entities relevant to the minimum tax rules in the reporting period and is subject to an effective tax burden of more than $15 \%$ in most of these jurisdictions. The impact analysis per jurisdiction revealed that for the 2024 financial year, a supplementary tax is not expected to be levied in 36 jurisdictions. An effective tax rate of less than $15 \%$ is expected in the jurisdictions of Bahrain, Bermuda, Cayman Islands, Hong Kong, South Korea, Hungary and Uruguay. The resulting impact on the effective tax rate of the HDI Group is expected to be in the low single-digit percentage range.
Standards, Interpretations and revisions to issued standards that were not yet effective in 2024 and that were not applied by the Group prior to their effective date
a) EU endorsement already granted
No revisions to standards were endorsed.
b) EU endorsement pending
In May 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments - Disclosures: Financial Reporting - Classification and Measurement of Financial Instruments. These amendments clarify individual issues that were identified during the review following the introduction of the classification and measurement requirements of IFRS 9 Financial Instruments. The amendments generally come into force retrospectively for reporting periods beginning on or after I January 2026 and have not yet been adopted by the EU.
In April 2024, the IASB published IFRS 18 Presentation and Disclosures in Financial Statements. The standard replaces the previous IAS I Presentation of Financial Statements. IFRS 18 introduces defined subtotals and categories in the statement of income and sets out requirements for improving the aggregation or disaggregation of items in the financial statements. In addition, the standard formulates requirements for disclosures in the notes on managementdefined performance measures (abbreviated MPMs) and introduces targeted improvements to the statement of cash flows by amending IAS 7. The standard is to be applied retrospectively for financial years beginning on or after I January 2027 and has not yet been adopted by the EU.
In addition, the following new standards and amendments to standards were adopted which are not expected to have any material impact on the Group's assets, liabilities, financial position, and financial performance:
APPLICATION OF NEW STANDARD AMENDMENTS
| Standard/project | Title of the standard/interpretation/ amendment |
Date of initial application $^{1}$ |
|---|---|---|
| IAS 21 The Effects of Changes in Foreign Exchange Rates |
Clarification of accounting in the event of a lack of exchangeability |
1 January 2025 |
| IFRS 19 Subsidiaries without Public Account- ability: Disclosures |
1 January 2027 |
[^0]
[^0]: ${ }^{1}$ Effective for financial years beginning on or after the date stated.
Segment reporting
The description of the business activities, the divisions and the reportable segments of the Talanx Group in the 2023 Annual Report, as well as of the products and services with which earnings are generated, is still accurate as at the end of the reporting period. The general
information contained therein on segment reporting and the statements on the measurement basis for the results of the reportable segments remain valid.
CONSOUDATED BALANCE SHEET BY DIVISION AS AT 30 JUNE 2024
EUR million
| Assets | Industrial Lines | Retail Germany |
||
|---|---|---|---|---|
| 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | |
| A. Intangible assets | 172 | 172 | 289 | 297 |
| B. Insurance contract assets | 64 | 82 | - | - |
| C. Reinsurance contract assets | 7,339 | 7,285 | 181 | 189 |
| D. Investments for own risk | 14,440 | 13,096 | 46,923 | 47,332 |
| E. Investments for the account and risk of life insurance policyholders | - | - | 13,260 | 12,106 |
| F. Cash at banks, cheques and cash-in-hand | 1,054 | 1,089 | 1,228 | 1,823 |
| G. Deferred tax assets | 56 | 56 | 365 | 299 |
| H. Other assets | 1,393 | 943 | 614 | 646 |
| I. Non-current assets and assets of disposal groups classified as held for sale ${ }^{1}$ | 18 | 18 | - | - |
| Total assets | 24,536 | 22,741 | 62,861 | 62,691 |
${ }^{1}$ For further information, see the "Non-current assets and disposal groups held for sale" section of the Notes.
CONSOUDATED BALANCE SHEET BY DIVISION AS AT 30 JUNE 2024
EUR million
| Equity and liabilities | Industrial Lines | Retail Germany |
||
|---|---|---|---|---|
| 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | |
| B. Subordinated liabilities | 410 | 410 | 111 | 194 |
| C. Insurance contract liabilities | 18,654 | 17,558 | 59,344 | 58,987 |
| D. Reinsurance contract liabilities | 66 | 59 | 66 | 69 |
| E. Other provisions | 748 | 738 | 411 | 396 |
| F. Liabilities | 1,345 | 1,068 | 1,145 | 1,473 |
| G. Deferred tax liabilities | 255 | 219 | 52 | 46 |
| H. Liabilities included in disposal groups classified as held for sale ${ }^{1}$ | 24 | 25 | - | - |
| Total liabilities/provisions | 21,501 | 20,077 | 61,131 | 61,165 |
| Retail International |
Reinsurance | Corporate Operations | Consolidation | Total |
|---|---|---|---|---|
| 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | 30.06.2024 |
| 1,724 | 1,692 | 173 | 174 | 52 |
| 26 | 26 | 966 | 1,020 | - |
| 1,271 | 1,038 | 1,477 | 1,526 | 2,036 |
| 14,780 | 14,235 | 62,591 | 60,722 | 2,757 |
| 364 | 372 | - | - | - |
| 460 | 472 | 1,021 | 1,016 | 324 |
| 321 | 301 | 575 | 631 | 224 |
| 907 | 867 | 4,319 | 4,557 | 698 |
| 1 | 4 | - | - | - |
| 19,853 | 19,008 | 71,122 | 69,645 | 6,091 |
| Retail International |
Reinsurance | Corporate Operations | Consolidation | Total | |
|---|---|---|---|---|---|
| 30.06 .2024 | 31.12 .2023 | 30.06 .2024 | 31.12 .2023 | 30.06 .2024 | 31.12 .2023 |
| 101 | 104 | 3,600 | 3,587 | 1,247 | 1,996 |
| 11,695 | 11,444 | 45,505 | 44,239 | 2,959 | 2,759 |
| 5 | - | 496 | 699 | - | - |
| 471 | 461 | 693 | 610 | 1,260 | 1,369 |
| 3,709 | 3,659 | 7,237 | 7,431 | 2,828 | 2,052 |
| 143 | 129 | 2,130 | 2,100 | - | - |
| - | - | - | - | - | - |
| 16,124 | 15,797 | 59,661 | 58,666 | 8,293 | 8,176 |
| Total liabilities |
[^0]
[^0]: ${ }^{1}$ For further information, see the "Non-current assets and disposal groups held for sale" section of the Notes.
${ }^{2}$ Equity attributable to Group shareholders and non-controlling interests.
CONSOLIDATED STATEMENT OF INCOME BY DIVISION/REPORTABLE SEGMENT FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2024 ${ }^{1}$
| EUR million | Industrial Lines | Retail Germany | ||
|---|---|---|---|---|
| 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | |
| 1. Insurance revenue | 4,798 | 4,221 | 1,795 | 1,722 |
| of which attributable to other divisions/segments | 33 | 28 | 34 | 48 |
| of which attributable to third parties | 4,765 | 4,193 | 1,761 | 1,675 |
| 2. Insurance service expenses | $-3,866$ | $-3,501$ | $-1,572$ | $-1,478$ |
| 3. a. Expenses from reinsurance contracts held | $-1,700$ | $-1,499$ | $-265$ | $-306$ |
| b. Income from reinsurance contracts held | 1,197 | 1,071 | 187 | 240 |
| Insurance service result | 429 | 292 | 145 | 179 |
| 4. a. Investment income for own risk | 312 | 235 | 1,012 | 945 |
| b. Investment expenses for own risk | $-126$ | $-127$ | $-370$ | $-414$ |
| Net investment income for own risk | 186 | 108 | 642 | 531 |
| of which impairments on financial instruments | $-1$ | - | $-5$ | $-3$ |
| of which share of profit or loss of equity-accounted associates and joint ventures | 13 | 4 | - | - |
| 4. c. Investment income for the account and risk of life insurance policyholders | - | - | 1,249 | 800 |
| d. Investment expenses for the account and risk of life insurance policyholders | - | - | $-20$ | $-46$ |
| Net investment income for the account and risk of life insurance policyholders | - | - | 1,229 | 754 |
| Net investment income | 186 | 108 | 1,872 | 1,285 |
| 5. a. Insurance finance income and expenses from insurance contracts issued (including currency effects) | $-371$ | 7 | $-1,837$ | $-1,215$ |
| b. Insurance finance income and expenses from reinsurance contracts held (including currency effects) | 177 | $-22$ | 2 | - |
| Net insurance financial result | $-194$ | $-15$ | $-1,835$ | $-1,215$ |
| Correction for currency result from net insurance financial result | 77 | $-44$ | - | - |
| Net insurance financial result before currency effects | $-118$ | $-59$ | $-1,835$ | $-1,215$ |
| Net insurance financial and investment result before currency effects | 68 | 49 | 36 | 70 |
| 6. a. Currency result on investments | 59 | $-22$ | 15 | $-10$ |
| b. Currency result on net insurance financial result | $-77$ | 44 | - | - |
| c. Other currency result | $-3$ | $-17$ | - | $-1$ |
| Net currency result | $-21$ | 5 | 15 | $-10$ |
| 7. a. Other income | 49 | 66 | 80 | 39 |
| b. Other expenses | $-220$ | $-221$ | $-132$ | $-128$ |
| Other income/expenses | $-171$ | $-155$ | $-52$ | $-89$ |
| Profit before goodwill impairments | 305 | 190 | 144 | 150 |
| 8. Goodwill impairments | - | - | - | - |
| Operating profit/loss (EBIT) | 305 | 190 | 144 | 150 |
| 9. Financing costs | $-5$ | $-6$ | $-3$ | $-3$ |
| 10. Taxes on income | $-77$ | $-34$ | $-54$ | $-53$ |
| Net income | 223 | 151 | 87 | 93 |
| of which attributable to non-controlling interests | - | - | 5 | 5 |
| of which attributable to shareholders of Talanx AG | 223 | 151 | 82 | 88 |
[^0]
[^0]: 1 With the exception of the Retail Germany Division and the Reinsurance Division, the statements of income of the other divisions are the same as those of the reportable segments.
| Retail International | Reinsurance | Corporate Operations | Consolidation | Total | ||||
|---|---|---|---|---|---|---|---|---|
| 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | 6M 2024 |
| 4,595 | 3,087 | 12,916 | 12,273 | 576 | 533 | $-1,074$ | $-974$ | 23,606 |
| — | — | 483 | 430 | 524 | 468 | $-1,074$ | $-974$ | — |
| 4,595 | 3,087 | 12,433 | 11,843 | 52 | 65 | — | — | 23,606 |
| $-4,068$ | $-2,879$ | $-10,656$ | $-10,291$ | $-475$ | $-536$ | 680 | 788 | $-19,957$ |
| $-441$ | $-382$ | $-1,658$ | $-1,546$ | $-436$ | $-415$ | 1,093 | 920 | $-3,408$ |
| 299 | 359 | 809 | 643 | 344 | 431 | $-758$ | $-854$ | 2,078 |
| 385 | 185 | 1,411 | 1,079 | 9 | 12 | $-59$ | $-120$ | 2,320 |
| 545 | 381 | 1,342 | 1,110 | 48 | 32 | $-52$ | $-27$ | 3,207 |
| $-186$ | $-129$ | $-314$ | $-244$ | $-69$ | $-77$ | 44 | 42 | $-1,020$ |
| 359 | 252 | 1,028 | 866 | $-20$ | $-45$ | $-8$ | 15 | 2,186 |
| $-1$ | 3 | 11 | 9 | — | — | — | — | 4 |
| — | — | 39 | 17 | — | — | — | — | 53 |
| 24 | 27 | — | — | — | — | — | — | 1,273 |
| $-5$ | $-2$ | — | — | — | — | — | — | $-25$ |
| 19 | 25 | — | — | — | — | — | — | 1,248 |
| 378 | 277 | 1,028 | 866 | $-20$ | $-45$ | $-8$ | 15 | 3,434 |
| $-231$ | $-184$ | $-930$ | $-145$ | $-15$ | $-17$ | 40 | 23 | $-3,343$ |
| 43 | 56 | $-3$ | 6 | 10 | 8 | $-55$ | $-30$ | 174 |
| $-188$ | $-129$ | $-933$ | $-139$ | $-5$ | $-9$ | $-15$ | $-7$ | $-3,169$ |
| 10 | 9 | 433 | $-203$ | $-1$ | 6 | — | — | 519 |
| $-178$ | $-120$ | $-500$ | $-342$ | $-6$ | $-2$ | $-15$ | $-7$ | $-2,651$ |
| 200 | 157 | 528 | 524 | $-26$ | $-47$ | $-23$ | 8 | 784 |
| 9 | 20 | 408 | $-205$ | — | 7 | — | — | 490 |
| $-10$ | $-9$ | $-433$ | 203 | 1 | $-6$ | — | — | $-519$ |
| 7 | $-4$ | $-31$ | 36 | 1 | — | — | — | $-26$ |
| 6 | 7 | $-57$ | 34 | 2 | 1 | — | — | $-55$ |
| 85 | 63 | 120 | 24 | 802 | 775 | $-639$ | $-720$ | 498 |
| $-252$ | $-164$ | $-332$ | $-299$ | $-771$ | $-724$ | 676 | 822 | $-1,031$ |
| $-167$ | $-101$ | $-212$ | $-274$ | 31 | 51 | 37 | 102 | $-534$ |
| 424 | 249 | 1,670 | 1,362 | 17 | 16 | $-45$ | $-10$ | 2,515 |
| — | — | — | — | — | — | — | — | — |
| 424 | 249 | 1,670 | 1,362 | 17 | 16 | $-45$ | $-10$ | 2,515 |
| $-36$ | $-10$ | $-63$ | $-74$ | $-55$ | $-48$ | 46 | 22 | $-116$ |
| $-126$ | $-57$ | $-446$ | $-298$ | 10 | $-4$ | — | $-4$ | $-692$ |
| 263 | 181 | 1,161 | 990 | $-29$ | $-36$ | 1 | 8 | 1,707 |
| 39 | 41 | 577 | 506 | — | — | $-3$ | 9 | 617 |
| 224 | 141 | 585 | 484 | $-29$ | $-36$ | 4 | $-1$ | 1,090 |
CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE RETAIL GERMANY (PROPERTY/CASUALTY AND LIFE), PROPERTY/CASUALTY REINSURANCE AND LIFE/HEALTH REINSURANCE REPORTABLE SEGMENTS
FOR THE PERIOD FROM 1 JANUARY TO 30 JUNE 2024
| EUR million | Retail Germany Property/Casualty | Retail Germany Life | Property/Casualty Reinsurance | Life/Health Reinsurance | |||||
|---|---|---|---|---|---|---|---|---|---|
| 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | 6M 2024 | 6M 2023 | ||
| 1. Insurance revenue | 896 | 861 | 898 | 861 | 9,099 | 8,365 | 3,817 | 3,908 | |
| of which attributable to other divisions/segments | - | - | 34 | 48 | 462 | 377 | 22 | 53 | |
| of which attributable to third parties | 896 | 861 | 864 | 814 | 8,638 | 7,988 | 3,795 | 3,855 | |
| 2. Insurance service expenses | $-854$ | $-790$ | $-718$ | $-688$ | $-7,281$ | $-6,896$ | $-3,374$ | $-3,395$ | |
| 3. a. Expenses from reinsurance contracts held | $-67$ | $-80$ | $-198$ | $-226$ | $-1,205$ | $-1,182$ | $-454$ | $-364$ | |
| b. Income from reinsurance contracts held | 28 | 42 | 159 | 198 | 350 | 310 | 459 | 333 | |
| Insurance service result | 3 | 34 | 142 | 145 | 963 | 598 | 448 | 481 | |
| 4. a. Investment income for own risk | 72 | 72 | 940 | 872 | 1,080 | 832 | 261 | 279 | |
| b. Investment expenses for own risk | $-22$ | $-24$ | $-347$ | $-390$ | $-264$ | $-190$ | $-50$ | $-54$ | |
| Net investment income for own risk | 50 | 48 | 593 | 483 | 816 | 641 | 211 | 225 | |
| of which impairments on financial instruments | $-2$ | - | $-3$ | $-3$ | 9 | 6 | 2 | 3 | |
| of which share of profit or loss of equity-accounted associates and joint ventures | - | - | - | - | 68 | 10 | $-29$ | 7 | |
| 4. c. Investment income for the account and risk of life insurance policyholders | - | - | 1,249 | 800 | - | - | - | - | |
| d. Investment expenses for the account and risk of life insurance policyholders | - | - | $-20$ | $-46$ | - | - | - | - | |
| Net investment income for the account and risk of life insurance policyholders | - | - | 1,229 | 754 | - | - | - | - | |
| Net investment income | 50 | 48 | 1,822 | 1,237 | 816 | 641 | 211 | 225 | |
| 5. a. Insurance finance income and expenses from insurance contracts issued (including currency result) | $-20$ | $-8$ | $-1,817$ | $-1,208$ | $-868$ | $-45$ | $-62$ | $-100$ | |
| b. Insurance finance income and expenses from reinsurance contracts held (including currency result) | 1 | - | 1 | 1 | 5 | $-14$ | $-8$ | 19 | |
| Net insurance financial result | $-19$ | $-8$ | $-1,816$ | $-1,207$ | $-863$ | $-58$ | $-70$ | $-81$ | |
| Correction for currency result from net insurance financial result | - | - | - | - | 443 | $-226$ | $-10$ | 23 | |
| Net insurance financial result before currency effects | $-19$ | $-8$ | $-1,816$ | $-1,207$ | $-420$ | $-285$ | $-80$ | $-58$ | |
| Net insurance finance and investment result before currency result | 31 | 40 | 6 | 30 | 396 | 357 | 131 | 167 | |
| 6. a. Currency result on investments | 1 | $-1$ | 14 | $-9$ | 409 | $-203$ | $-1$ | $-2$ | |
| b. Currency result on net insurance financial result | - | - | - | - | $-443$ | 226 | 10 | $-23$ | |
| c. Other currency result | - | - | - | - | $-40$ | 36 | 8 | - | |
| Net currency result | 1 | $-1$ | 14 | $-9$ | $-74$ | 59 | 17 | $-25$ | |
| 7. a. Other income | 21 | 9 | 59 | 30 | 108 | 15 | 12 | 9 | |
| b. Other expenses | $-40$ | $-43$ | $-92$ | $-85$ | $-221$ | $-187$ | $-111$ | $-111$ | |
| Other income/expenses | $-19$ | $-34$ | $-34$ | $-55$ | $-113$ | $-172$ | $-99$ | $-102$ | |
| Profit before goodwill impairments | 16 | 39 | 128 | 111 | 1,173 | 841 | 497 | 521 | |
| 8. Goodwill impairments | - | - | - | - | - | - | - | - | |
| Operating profit/loss (EBIT) | 16 | 39 | 128 | 111 | 1,173 | 841 | 497 | 521 |
OTHER SEGMENT INFORMATION
| EUR million | Industrial Lines | Retail Germany - Property/ Casualty |
Retail Germany - Life |
Retail International |
Property/ Casualty Reinsurance |
Life/Health Reinsurance |
Corporate Operations |
Consolidation | Total |
|---|---|---|---|---|---|---|---|---|---|
| 6M 2024 | |||||||||
| Included in net investment income | |||||||||
| Current interest income | 175 | 41 | 441 | 363 | 756 | 198 | 48 | $-51$ | 1,970 |
| Incl. investment contracts | 175 | 41 | 441 | 363 | 756 | 198 | 48 | $-51$ | 1,970 |
| Current interest expense | $-1$ | - | - | $-2$ | $-7$ | $-1$ | - | - | $-11$ |
| Share of profit or loss of equity-accounted associates and joint ventures | 13 | - | - | - | 68 | $-29$ | - | - | 53 |
| Depreciation of/ impairment losses on investment property | |||||||||
| Depreciation | $-2$ | - | - | $-1$ | $-30$ | - | - | - | $-33$ |
| Depreciation of/ impairment losses on infrastructure investments | |||||||||
| Depreciation | $-3$ | $-2$ | $-11$ | - | - | - | - | - | $-16$ |
| Impairment losses | - | - | - | - | - | - | - | - | - |
| Income from reversal of impairment losses | - | - | 2 | - | - | - | - | - | 2 |
| Other positions in profit or loss | |||||||||
| Other interest income | 7 | 7 | 32 | 9 | 6 | 7 | 15 | $-8$ | 74 |
| Other interest expense | $-11$ | $-1$ | $-15$ | $-10$ | $-21$ | $-6$ | $-19$ | 13 | $-70$ |
| Depreciation and amortisation of/impairment losses on property, plant and equipment and intangible assets | |||||||||
| Depreciation and amortisation | $-9$ | - | $-1$ | $-20$ | $-6$ | $-2$ | $-19$ | - | $-59$ |
| Impairment losses | - | - | - | - | - | - | - | - | - |
| Income from reversal of impairment losses on fixed assets | - | - | - | - | - | - | - | - | - |
| 6M 2023 | |||||||||
| Included in net investment income | |||||||||
| Current interest income | |||||||||
| Incl. investment contracts | 116 | 37 | 447 | 261 | 620 | 173 | 30 | $-26$ | 1,656 |
| Current interest expense | - | - | $-1$ | $-4$ | $-6$ | - | - | - | $-11$ |
| Share of profit or loss of equity-accounted associates and joint ventures | 4 | - | - | - | 10 | 7 | - | - | 20 |
| Depreciation of/ impairment losses on investment property | |||||||||
| Depreciation | $-2$ | - | - | $-1$ | $-27$ | - | - | - | $-29$ |
| Depreciation of/ impairment losses on infrastructure investments | |||||||||
| Depreciation | $-3$ | $-2$ | $-11$ | - | - | - | - | - | $-16$ |
| Impairment losses | - | - | - | - | - | - | - | - | - |
| Income from reversal of impairment losses | - | - | - | - | - | - | - | - | - |
Other positions in profit or loss
| Other interest income | 6 | 2 | 6 | 2 | 14 | 6 | 6 | $-5$ | $\mathbf{3 8}$ |
|---|---|---|---|---|---|---|---|---|---|
| Other interest expense | $-11$ | $-1$ | -9 | -5 | $-21$ | -5 | -18 | 9 | -59 |
| Depreciation and amortisation of/impairment losses on property, plant and equipment and intangible assets |
|||||||||
| Depreciation and amortisation |
-9 | - | -1 | -54 | -11 | -3 | -18 | - | -96 |
| Impairment losses | -3 | -1 | - | - | - | - | - | - | -5 |
| Income from reversal of impairment losses on fixed assets |
- | - | - | - | - | - | 2 | - | $\mathbf{2}$ |
Consolidation
Basis of consolidation
As at the reporting date, 150 (139) individual companies, 33 (32) investment funds, three (three) structured entities and an unchanged total of five sub-groups (including four foreign sub-groups) were fully consolidated in the Talanx consolidated financial statements as a corporate group (including associates), as were six (six) companies accounted for using the equity method and eight (nine) associates or joint ventures measured at fair value.
Significant changes in the basis of consolidation compared with yearend 2023 are presented in the following.
Significant additions and disposals of consolidated subsidiaries and other changes under company law
By way of a purchase agreement dated 27 May 2023, Inversiones HDI Limitada, Santiago, Chile, a wholly owned subsidiary of HDI International AG, Hannover, Germany (HINT), in the Retail International segment, acquired 100\% of the shares in Liberty Compañía de Seguros Generales S.A. (Liberty Chile), Santiago, Chile, and (with minor minorities) all affiliated holding and service companies. Furthermore, as a result of this agreement, Saint Honoré Iberia S.L., Madrid, Spain, also a wholly owned Group subsidiary of HINT, acquired 100\% of the shares in Liberty Seguros S.A. (Liberty Colombia), Bogotá, Colombia, and Liberty Seguros S.A. (Liberty Ecuador), Quito, Ecuador, along with all associated holding and service companies. Based on the agreements reached, the Group recognised the acquisition as at 1 March 2024 (date of initial consolidation). The purchase price hedged against exchange rate movements (EUR 443 million) was settled entirely in cash.
The acquisition resulted in goodwill of EUR 91 million, representing the long-term potential to significantly expand property insurance business and to benefit from significant synergies. In the tax accounts, this transaction does not result in any tax-deductible goodwill (share deal).
Acquisition-related costs of the transaction (EUR 9.2 million) are included in "Other income/expenses".
In total, assets were acquired with a value of EUR 880 million (excluding shares in affiliated companies) and liabilities with a value of EUR 525 million, which are broken down as follows:
FAIR VALUES OF ACQUIRED ASSETS AND ASSUMED LIABILITIES OF HDI LIBERTY COMPANIES AS AT 1 MARCH 2024
| EUR million | Liberty Chile | Liberty Colombia |
Liberty Ecuador | Holding- und Servicegesellschaften |
|---|---|---|---|---|
| Intangible assets | 15 | 8 | - | - |
| Reinsurance contracts assets | 57 | 88 | 6 | |
| Investments | 187 | 307 | 24 | 504 |
| of which shares in affiliated companies (before consolidation) | - | - | - | 499 |
| Cash at banks, cheques and cash-in-hand | 33 | 16 | 1 | 4 |
| Deferred tax assets | 26 | 19 | - | 3 |
| Other assets | 34 | 31 | 5 | 10 |
| Total assets | 352 | 469 | 37 | 521 |
| Insurance contracts liabilities | 115 | 221 | 11 | - |
| Other provisions | 15 | 31 | 2 | 9 |
| Other liabilities | 64 | 19 | 2 | 3 |
| Deferred tax liabilities | - | 31 | 2 | - |
| Total liabilities | 194 | 302 | 16 | 13 |
| Acquired net assets (before consolidation) | 158 | 167 | 21 | 508 |
The receivables included in "Other assets" do not contain any material irrecoverable amounts, meaning that the reported fair values of these receivables from ongoing business essentially correspond to the gross amounts. The intangible assets acquired primarily relate to acquired distribution networks and customer relationships. Contingent liabilities were identified in connection with the acquired company, which were recognised in accordance with IFRS 3.23 in the amount of EUR 10 million. Contingent consideration, assets for compensation and separate transactions within the meaning of IFRS 3 were not recognised.
The companies' insurance revenue was included in the financial statements at EUR 275 million and net income at EUR 28 million. The information required by IFRS 3 B64 (q) could not be disclosed as the accounting was only converted to IFRS at the time of initial consolidation.
Non-current assets held for sale and disposal groups
HDI Global SE, Hannover (Industrial Lines segment)
HDI Global SE, Hannover is planning to sell an insurance portfolio in the motor vehicle and marine insurance lines held by its branch in the Netherlands. The portfolio contains assets of EUR 16 (16) million and technical provisions of EUR 24 (25) million. The disposal relates to the strategic orientation in the Industrial Lines segment and is expected to take place in 2025. No valuation adjustments were required.
Real estate
We do not report any property holdings as held for sale as at the reporting date. In the prior year, we reported property portfolios amounting to EUR 4 million as held for sale.
Notes to the consolidated balance sheet - assets
(i) Intangible assets
INTANGIBLE ASSETS
| EUR million | $\mathbf{3 0 . 0 6 . 2 0 2 4}$ | $\mathbf{3 1 . 1 2 . 2 0 2 3}$ |
|---|---|---|
| a. Goodwill | 1,649 | 1,611 |
| b. Other intangible assets | 762 | 782 |
| of which | ||
| Software | 249 | 250 |
| Other | ||
| Acquired distribution networks and | 297 | 298 |
| customer relationships | 46 | 50 |
| Acquired brand names | 170 | 184 |
| Other | $\mathbf{2 , 4 1 0}$ | $\mathbf{2 , 3 9 3}$ |
| Total |
(2) Reinsurance contract assets
Reconciliation of changes in the carrying amount
ANALYSIS BY REMAINING COVERAGE AND INCURRED CLAIMS
| EUR million | $\begin{gathered} \text { Excluding } \ \text { loss-recovery } \ \text { component } \end{gathered}$ | Asset for remaining coverage - ceded | Asset for incurred claims - ceded | Total | ||
|---|---|---|---|---|---|---|
| Contracts measured under the PAA | ||||||
| Excluding less-recovery component | Loss-recovery component | Contracts not measured under the PAA | Estimates of present value of future cash flows | Risk adjustment for nonfinancial risk | ||
| 2024 | ||||||
| Carrying amount of assets at the start of the reporting period | $-738$ | 12 | 3,923 | 3,726 | 151 | 7,074 |
| Carrying amount of liabilities at the start of the reporting period | $-1,730$ | - | 966 | 26 | 1 | $-737$ |
| Net opening balance | $-2,468$ | 12 | 4,889 | 3,752 | 152 | 6,337 |
| IAS 8 adjustments | - | - | - | - | - | - |
| Changes in the basis of consolidation | 65 | 64 | - | - | - | 129 |
| Disposal groups in accordance with IFRS 5 | - | - | - | - | - | - |
| Other changes | - | - | - | - | - | - |
Changes in the statement of income and other comprehensive income
Amounts payable to reinsurers
| Allocation of reinsurance premiums paid | $-3,432$ | 22 | - | - | - | $-3,411$ |
|---|---|---|---|---|---|---|
| Changes in the non-performance risk of reinsurers | 3 | - | - | - | - | 3 |
| Total amounts payable to reinsurers | $-3,429$ | 22 | - | - | - | $-3,408$ |
Amounts recoverable from reinsurers
| Recoveries of incurred claims and other insurance service expenses | - | $-30$ | 1,194 | 584 | 8 | 1,756 |
|---|---|---|---|---|---|---|
| Amortisation of insurance acquisition cash flows | 9 | - | - | - | - | 9 |
| Recoveries and reversals of recoveries of losses on onerous underlying contracts | 25 | 15 | - | - | - | 41 |
| Adjustments to assets for incurred claims | - | - | 148 | 131 | $-8$ | 271 |
| Changes in the non-performance risk of reinsurers | - | - | - | $-1$ | - | $-1$ |
| Total amounts recoverable from reinsurers | 35 | $-14$ | 1,342 | 714 | 1 | 2,078 |
| Investment components | $-31$ | - | 31 | - | - | - |
| Net income or expense from reinsurance contracts held | $-3,425$ | 7 | 1,373 | 714 | 1 | $-1,330$ |
| Insurance finance income and expenses from reinsurance contracts held | 60 | 1 | 8 | $-2$ | - | 67 |
| Effect of movements in exchange rates | $-86$ | - | 82 | 14 | - | 10 |
| Other changes | 28 | - | - | $-29$ | - | - |
| Total changes in the statement of income and other comprehensive income | $-3,422$ | 8 | 1,464 | 697 | 1 | $-1,252$ |
| Cash flows | ||||||
| Premiums paid | 3,709 | - | - | - | - | 3,709 |
| Payments received for incurred claims and other insurance service expenses | - | - | $-1,512$ | $-452$ | - | $-1,963$ |
| Insurance acquisition cash flows | $-18$ | - | - | - | - | $-18$ |
| Other cash flows | - | - | - | - | - | - |
| Total cash flows | 3,690 | - | $-1,512$ | $-452$ | - | 1,727 |
| Net closing balance | $-2,135$ | 84 | 4,841 | 3,998 | 153 | 6,941 |
| Carrying amount of assets at the end of the reporting period | $-859$ | 84 | 4,154 | 3,967 | 153 | 7,498 |
| Carrying amount of liabilities at the end of the reporting period | $-1,276$ | - | 687 | 31 | 1 | $-557$ |
New business analysis - contracts not measured under the PAA
EFFECT OF REINSURANCE CONTRACTS HELD THAT WERE INITIALLY RECOGNISED IN THE PERIOD
| EUR million | Contracts initiated without loss-recovery component |
Contracts initiated with loss-recovery component |
|---|---|---|
| 6M 2024 | ||
| Estimates of present value of future cash inflows | 2,239 | $\sim 17$ |
| Estimates of present value of future cash outflows | $-3,499$ | 4 |
| of which: insurance acquisition cash flows | 40 | - |
| Risk adjustment for non-financial risk | 91 | $\sim 2$ |
| Income recognised on initial recognition | - | 11 |
| Contractual service margin ${ }^{1}$ | 1,169 | 27 |
| 6M 2023 | ||
| Estimates of present value of future cash inflows | 1,299 | 26 |
| Estimates of present value of future cash outflows | $-1,910$ | $\sim 36$ |
| of which: insurance acquisition cash flows | - | - |
| Risk adjustment for non-financial risk | 72 | 10 |
| Income recognised on initial recognition | - | 6 |
| Contractual service margin ${ }^{1}$ | 541 | 6 |
${ }^{1}$ The CSM is attributable to the following segments: Retail Germany - Property/Casualty EUR 516 million, Retail Germany - Life EUR 21 (8) million, Retail International EUR 11 (5) million, Property/Casualty Reinsurance EUR 1,047 (442) million, Life/Health Reinsurance EUR 6 (8) million and Corporate Operations EUR 110 (93) million. Consolidation had an effect of EUR - 80 (-18) million.
No material reinsurance contracts were acquired in the course of a portfolio transfer or business combination in accordance with IFRS 3 in the reporting period.
Contractual service margin
The closing balance of the CSM from reinsurance contracts held increased by EUR 669 million to EUR 1,372 (703) million. The change in the CSM can be attributed to the segments as follows: Retail Germany - Property/Casualty: EUR 29 million, Retail Germany - Life: EUR $\sim 40$ million, Retail International: EUR 7 million, Property/Casualty Reinsurance: EUR 569 million, Life/Health Reinsurance: EUR 48 million and Corporate Operations: EUR 72 million. Consolidation had an effect of EUR -14 million.
(3) Financial instruments measured at amortised cost
| EUR million | Amortised cost | Unrealised gains/losses | Fair value | |||
|---|---|---|---|---|---|---|
| 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | |
| Other foreign government debt securities | 31 | 27 | $-5$ | $-2$ | 26 | 25 |
| Corporate bonds | 45 | 50 | 2 | 1 | 47 | 51 |
| Mortgage loans | 865 | 876 | $-151$ | $-141$ | 714 | 735 |
| Other | 1 | 1 | - | - | 1 | 1 |
| Total | 942 | 954 | $-154$ | $-142$ | 788 | 811 |
(4) Financial instruments measured at fair value through OCI
| EUR million | Amortised cost | Unrealised gains/losses | Fair value | |||
|---|---|---|---|---|---|---|
| 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | 30.06.2024 | 31.12.2023 | |
| Debt instruments | ||||||
| Government debt securities issued by EU member states | 16,406 | 15,702 | $-1,797$ | $-1,354$ | 14,609 | 14,348 |
| US Treasury notes | 11,717 | 12,018 | $-857$ | $-690$ | 10,860 | 11,328 |
| Other foreign government debt securities | 7,810 | 7,134 | $-212$ | $-129$ | 7,598 | 7,005 |
| Debt securities issued by quasi-governmental entities | 29,886 | 28,782 | $-5,604$ | $-5,036$ | 24,282 | 23,746 |
| Corporate bonds | 35,290 | 32,901 | $-1,980$ | $-1,873$ | 33,310 | 31,029 |
| Covered bonds/asset-backed securities | 21,783 | 21,368 | $-2,044$ | $-1,785$ | 19,739 | 19,584 |
| Other | 739 | 655 | $-2$ | $-7$ | 737 | 648 |
| Total debt instruments | 123,632 | 118,560 | $-12,496$ | $-10,873$ | 111,135 | 107,687 |
| Equity instruments | ||||||
| Equities | 799 | 1,331 | 148 | 188 | 946 | 1,519 |
| Other participating interests (financial investments) | 87 | 2 | $-2$ | 1 | 85 | 3 |
| Total equity instruments | 886 | 1,333 | 146 | 189 | 1,031 | 1,522 |
| Total | 124,517 | 119,893 | $-12,350$ | $-10,684$ | 112,167 | 109,210 |
(5) Financial instruments measured at fair value through profit or loss
| EUR million | Fair value | |
|---|---|---|
| 30.06.2024 | 31.12.2023 | |
| Debt instruments | ||
| Government debt securities issued by EU member states | 4 | - |
| Other foreign government debt securities | 53 | 67 |
| Debt securities issued by quasi-governmental entities | 43 | 37 |
| Corporate bonds | 1,170 | 1,150 |
| Covered bonds/asset-backed securities | 68 | 17 |
| Profit participating certificates | 85 | 92 |
| Life settlement contracts | 13 | 13 |
| Other | 51 | 53 |
| Total debt instruments | 1,486 | 1,429 |
| Equity instruments | ||
| Equities | 139 | 122 |
| Shares in associates and joint ventures | 184 | 190 |
| Other equity instruments at fair value through profit or loss | 10 | 10 |
| Total equity instruments | 333 | 322 |
| Derivatives | 347 | 415 |
| Funds classified as at fair value through profit or loss | 9,223 | 8,906 |
| Investment contracts | 2,077 | 1,971 |
| Short-term investments | 2,094 | 2,233 |
| Total | 15,560 | 15,276 |
(6) Impairment losses on financial instruments
LOSS ALLOWANCE ON FINANCIAL INSTRUMENTS
| EUR million | Opening balance |
Transfer to Level 1 |
Transfer to Level 2 |
Transfer to Level 3 |
Additions | Disposals | Other | Closing balance |
|---|---|---|---|---|---|---|---|---|
| 30.06.2024 | ||||||||
| Measurement category | ||||||||
| Financial instruments measured at amortised cost (Level 1) | 2 | - | - | - | - | - | $-1$ | 1 |
| Financial instruments measured at fair value through other comprehensive income (Level 1) | 90 | 2 | $-5$ | - | 33 | $-14$ | $-15$ | 90 |
| Financial instruments measured at fair value through other comprehensive income (Level 2) | 51 | $-2$ | 6 | $-1$ | - | $-3$ | 4 | 55 |
| Financial instruments measured at fair value through other comprehensive income (Level 3) | 134 | - | $-1$ | 1 | - | $-4$ | 2 | 132 |
| Simplified impairment model | 18 | - | - | - | 3 | $-1$ | - | 21 |
| Total | 294 | - | - | - | 36 | $-22$ | $-9$ | 299 |
(7) Fair value hierarchy-investments
For disclosure purposes required by IFRS 13 Fair Value Measurement, both investments that are accounted for at fair value and assets and liabilities that are recognised at amortised cost but for which fair value must be disclosed in the annual report (investments not measured at fair value) must be assigned to a three-level fair value hierarchy.
The guideline for the allocation to the individual levels of the valuation hierarchy and of the valuation process, the valuation models for measuring fair value, the material input factors, the material Level 3 portfolios and the statements on the sensitivity analysis have not materially changed compared to the description in the 2023 Annual Report. Level 3 investments had fair values totalling EUR 14.8 (14.1) billion as at the reporting date. Of this figure, the Group generally measures investments with a value of EUR 8.6 (8.0) billion using the net asset value method, under which alternative inputs within the
meaning of the standard cannot reasonably be established. Real estate measured at fair value of EUR 3.5 (4.1) billion is measured using the income capitalisation approach. The fair values of the other Level 3 investments are primarily determined using the present value method and the ISDA model.
As at the end of the reporting period, we allocated roughly $5 \%$ (5\%) of the investments measured at fair value to Level 1 of the fair value hierarchy, $84 \%(84 \%)$ to Level 2 and $11 \%(11 \%)$ to Level 3.
No securities were reclassified between Level 2 and Level 1 in the financial year or in the prior year.
As in the prior year, there were no liabilities issued with an inseparable third-party credit enhancement within the meaning of IFRS 13.98 as at the end of the reporting period. The credit enhancements are not reflected in the measurement of the fair value.
FAIR VALUE HIERARCHY - INVESTMENTS MEASURED AT FAIR VALUE
EUR million
| Carrying amounts of investments measured at fair value by class | Level 1 | Level 2 | Level 3 | Carrying amount |
|---|---|---|---|---|
| 30.06.2024 | ||||
| Financial assets measured at fair value | ||||
| Investment property | - | - | 3,378 | 3,378 |
| Shares in affiliated companies, associates, joint ventures and participating interests | 63 | 1 | 1,029 | 1,093 |
| Financial instruments measured at fair value through other comprehensive income | ||||
| Debt instruments | 6 | 108,454 | 2,676 | 111,135 |
| Equity instruments | 945 | - | 86 | 1,031 |
| Financial instruments measured at fair value through profit or loss | ||||
| Debt instruments classified as at fair value through profit or loss | 4 | 1,282 | 200 | 1,486 |
| Equity instruments classified as at fair value through profit or loss | 16 | 29 | 288 | 333 |
| Derivatives | 1 | 149 | 197 | 347 |
| Funds classified as at fair value through profit or loss | 721 | 1,846 | 6,657 | 9,223 |
| Investment contracts | ||||
| Financial instruments classified as at fair value through profit or loss | 1,865 | 140 | 72 | 2,077 |
| Short-term investments | 2,079 | 15 | - | 2,094 |
| Other assets | ||||
| Real estate held and used | - | - | 108 | 108 |
| Derivatives | - | 2 | - | 2 |
| Total financial assets measured at fair value | 5,697 | 111,919 | 14,692 | 132,308 |
| Financial liabilities measured at fair value | ||||
| Other liabilities (negative fair values from derivative financial instruments) | ||||
| Negative fair values from derivatives | - | 306 | 6 | 313 |
| Other liabilities (investment contracts) | ||||
| Financial instruments classified as at fair value through profit or loss | 846 | 1,158 | 73 | 2,077 |
| Liabilities designated as at fair value through profit or loss | 10 | - | - | 10 |
| Total financial liabilities measured at fair value | 856 | 1,464 | 80 | 2,400 |
FAIR VALUE HIERARCHY - INVESTMENTS MEASURED AT FAIR VALUE
EUR million
| Carrying amounts of investments measured at fair value by class | Level 1 | Level 2 | Level 3 | Carrying amount |
|---|---|---|---|---|
| 31.12.2023 | ||||
| Financial assets measured at fair value | ||||
| Investment property | - | - | 3,426 | 3,426 |
| Shares in affiliated companies, associates, joint ventures and participating interests | 58 | 1 | 1,050 | 1,108 |
| Financial instruments measured at fair value through other comprehensive income | ||||
| Debt instruments | 5 | 105,252 | 2,430 | 107,687 |
| Equity instruments | 1,519 | - | 3 | 1,522 |
| Financial instruments measured at fair value through profit or loss | ||||
| Debt instruments classified as at fair value through profit or loss | 12 | 1,215 | 202 | 1,429 |
| Equity instruments classified as at fair value through profit or loss | 102 | - | 220 | 322 |
| Derivatives | - | 214 | 200 | 415 |
| Funds classified as at fair value through profit or loss | 628 | 1,943 | 6,335 | 8,906 |
| Investment contracts | ||||
| Financial instruments classified as at fair value through profit or loss | 1,758 | 134 | 79 | 1,971 |
| Short-term investments | 2,213 | 20 | - | 2,233 |
| Other assets | ||||
| Real estate held and used | - | - | 108 | 108 |
| Derivatives | - | 2 | - | 2 |
| Total financial assets measured at fair value | 6,295 | 108,782 | 14,053 | 129,130 |
| Financial liabilities measured at fair value | ||||
| Other liabilities (negative fair values from derivative financial instruments) | ||||
| Negative fair values from derivatives | - | 267 | 9 | 276 |
| Other liabilities (investment contracts) | ||||
| Financial instruments classified as at fair value through profit or loss | 800 | 1,088 | 80 | 1,968 |
| Liabilities designated as at fair value through profit or loss | 12 | - | - | 12 |
| Total financial liabilities measured at fair value | 812 | 1,355 | 89 | 2,256 |
Analysis of investments (assets) for which significant inputs are not based on observable market data (Level 3)
RECONCILIATION OF INVESTMENTS (ASSETS) CLASSIFIED AS LEVEL 3
AT THE START OF THE REPORTING PERIOD TO CARRYING AMOUNTS AS AT 30 JUNE 2024
| EUR million | Invest- ment property |
Participat- ing interests |
Debt instru- ments FVOO |
Equity instru- ments FVOO |
Debt instru- ments FVPL |
Equity instru- ments FVPL |
Derivacives | Funds FVPL |
Invest- ment contracts |
Real estate held and used |
Financial assets total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | |||||||||||
| Opening balance at the start of the reporting period | 3,426 | 1,050 | 2,430 | 3 | 202 | 220 | 200 | 6,335 | 79 | 108 | 14,053 |
| Income and expenses | |||||||||||
| recognised in profit or loss | $-45$ | 25 | 12 | - | - | 25 | 45 | $-28$ | - | - | 35 |
| recognised in other comprehensive income |
- | $-11$ | $-21$ | $-3$ | - | - | - | - | - | - | $-35$ |
| Transfers into Level 3 ${ }^{1}$ | - | - | 76 | 1 | - | - | - | - | - | - | 77 |
| Transfers out of Level 3 | - | - | - | - | - | - | - | - | $-3$ | - | $-3$ |
| Additions | |||||||||||
| Purchases | 3 | 345 | 246 | 27 | 1 | 46 | - | 529 | - | - | 1,196 |
| Disposals | |||||||||||
| Sales | - | $-326$ | $-15$ | $-3$ | $-4$ | - | $-52$ | $-245$ | $-4$ | - | $-649$ |
| Repayments/redemptions | $-6$ | - | $-70$ | - | $-1$ | - | $-1$ | - | - | - | $-77$ |
| Exchange rate changes | - | 7 | 18 | 2 | 2 | $-3$ | 4 | 66 | - | - | 96 |
| Other changes | - | $-60$ | - | 60 | - | - | - | - | - | - | - |
| Closing balance at the end of the reporting period | 3,378 | 1,029 | 2,676 | 86 | 200 | 288 | 197 | 6,657 | 72 | 108 | 14,692 |
${ }^{1}$ Trading in an active market was discontinued.
Effect on profit or loss of Level 3 investments (assets) measured at fair value
| EUR million | Invest- ment property |
Participat- ing interests |
Debt instru- ments FVOO |
Equity instru- ments FVOO |
Debt instru- ments FVPL |
Equity instru- ments FVPL |
Derivacives | Funds FVPL |
Invest- ment contracts |
Real estate held and used |
Financial assets total |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | |||||||||||
| Gains and losses in the financial year | |||||||||||
| Investment income | 28 | 26 | 13 | - | 3 | 26 | 52 | 174 | - | - | 322 |
| Investment expenses | $-73$ | - | $-1$ | - | $-4$ | $-1$ | $-7$ | $-202$ | - | - | $-288$ |
| of which attributable to financial instruments held as at the end of the reporting period | |||||||||||
| Investment income | 22 | 26 | 1 | - | 2 | 26 | 11 | 174 | - | - | 260 |
| of which investment income from fair value changes | 22 | 24 | - | - | 1 | 26 | 11 | 174 | - | - | 256 |
| Investment expenses | $-73$ | - | $-1$ | - | $-1$ | $-1$ | $-7$ | $-202$ | - | - | $-285$ |
| of which investment losses from fair value changes | $-73$ | - | - | - | $-1$ | $-1$ | $-5$ | $-202$ | - | - | $-282$ |
Analysis of financial liabilities for which significant inputs are not based on observable market data (Level 3)
RECONCILIATION OF FINANCIAL INSTRUMENTS (FINANCIAL LIABILITIES) CLASSIFIED AS LEVEL 3 AT THE START OF THE REPORTING PERIOD TO CARRYING AMOUNTS AS AT 30 JUNE 2024
| EUR million | Other liabilities/negative fair values from derivatives | Investment contracts | Total financial liabilities |
|---|---|---|---|
| 2024 | |||
| Opening balance at the start of the reporting period | 9 | 80 | 89 |
| Income and expenses | |||
| recognised in profit or loss | - | - | - |
| recognised in other comprehensive income | - | - | - |
| Transfers into Level 3 | - | - | - |
| Transfers out of Level 3 | - | $-3$ | $-3$ |
| Additions | |||
| Purchases | - | - | - |
| Disposals | |||
| Sales | $-3$ | $-4$ | $-7$ |
| Exchange rate changes | - | - | - |
| Other changes | - | - | - |
| Closing balance at the end of the reporting period | 6 | 73 | 80 |
Effect on profit or loss of Level 3 financial liabilities measured at fair value
| EUR million | Other liabilities/negative fair values from derivatives | Investment contracts | Total financial liabilities |
|---|---|---|---|
| 2024 | |||
| Gains and losses in the financial year | |||
| Investment income | - | - | - |
| Investment expenses | - | - | - |
| of which attributable to financial instruments held as at the end of the reporting period | |||
| Investment income | - | - | - |
| of which investment income from fair value changes | - | - | - |
| Investment expenses | - | - | - |
| of which investment losses from fair value changes | - | - | - |
Notes to the consolidated balance sheet equity and liabilities
(B) Equity
Subscribed capital
The share capital was unchanged at EUR 323 million and is composed of 258,228,991 no-par value registered shares; it is fully paid up. The nominal value per share is EUR 1.25 .
For details of the composition of equity, please see the "Consolidated statement of changes in equity".
There were no changes to the composition of conditional and authorised capital in the reporting period. In this regard, please refer to the explanations in our consolidated financial statements for 2023 (page 255).
Non-controlling interests
RECONCILIATION ITEMS FOR NON-CONTROLLING INTERESTS IN EQUITY
| EUR million | $\mathbf{3 0 . 0 6 . 2 0 2 4}$ | $\mathbf{3 1 . 1 2 . 2 0 2 3}$ |
|---|---|---|
| Unrealised gains and losses on investments | $-1,605$ | $-1,345$ |
| Share of net income | 617 | 964 |
| Other equity | 7,556 | 6,727 |
| Total | $\mathbf{6 , 5 6 9}$ | $\mathbf{6 , 3 4 7}$ |
Non-controlling interests in equity primarily consist of the interests in the equity of the Hannover Re subgroup held by non-Group shareholders.
(9) Subordinated liabilities
A number of Group companies have issued long-term subordinated debt instruments in the past, some of which are listed, in order to optimise the Group's capital structure and to ensure compliance with regulatory liquidity (solvency) requirements.
LONG-TERM SUBORDINATED DEBT
| EUR million | Nominal amount | Coupon | Maturity | Rating ${ }^{1}$ | Issue | 30.06 .2024 | 31.12 .2023 |
|---|---|---|---|---|---|---|---|
| These subordinated bonds were issued on the European capital market in 2017. They can be called for the first time under normal conditions time in 2027. | |||||||
| Fixed (2.25\%) | 2017/2047 | $(- ; A-)$ | 750 | 750 | |||
| Talanx AG | Fixed (1.75\%), then floating rate | 2021/2042 | $(- ; A-)$ | These subordinated bonds were issued on the European capital market in 2021. They can be called for the first time under normal conditions in 2032. | 497 | 496 | |
| Talanx AG | Floating rate 750 (4,159\%) |
2023/2026 | $(- ;-)$ | Credit line in the form of a subordinated bond that can be cancelled monthly. | - | 750 | |
| Hannover Rück SE | Fixed (5.875\%), then floating rate |
2022/2043 | $(- ; A)$ | These subordinated bonds were issued on the European capital market in 2022. They can be called for the first time under normal conditions in 2033. | 746 | 746 | |
| Hannover Rück SE | Fixed (1.375\%), then floating rate |
2021/2042 | $(- ; A)$ | These subordinated bonds were issued on the European capital market in 2021. They can be called for the first time under normal conditions in 2031. | 745 | 745 | |
| Hannover Rück SE | Fixed (1.75\%), then floating rate | 2020/2040 | $(- ; A)$ | These subordinated bonds were issued on the European capital market in 2020. They can be called for the first time under normal conditions in 2030. | 497 | 496 | |
| Hannover Rück SE | Fixed (1.125\%), then floating rate |
2019/2039 | $(- ; A)$ | These subordinated bonds were issued on the European capital market in 2019. They can be called for the first time under normal conditions in 2029. | 745 | 744 | |
| Hannover Rück SE ${ }^{1}$ | Fixed (3.375\%), then floating rate |
2014/no maturity | $(a+; A)$ | These subordinated bonds were issued on the European capital market in 2014. They can be called for the first time under normal conditions in 2025. | 449 | 449 | |
| HDI Assicurazioni 5.p.A. | 25 Fixed (7.25\%) | 2020/2030 | $(- ;-)$ | These subordinated bonds in the amount of EUR 25 million were issued in 2020 on the European capital market. They can be called for the first time under normal conditions after five years. | 33 | 34 | |
| HDI Assicurazioni 5.p.A. | 27 Fixed (5.5\%) | 2016/2026 | $(- ;-)$ | Subordinated loan. | 27 | 28 | |
| HDI Assicurazioni 5.p. A. | Fixed 11 (5,7557\%) |
2020/2030 | $(- ;-)$ | Two subordinated loans, callable after ten years. | 11 | 11 | |
| HDI Global SE | Fixed (1.70\%), then floating 13 rate | 2021/2041 | $(- ;-)$ | Two subordinated loans, callable after ten years. | 13 | 13 | |
| Total | 4,512 | 5,262 |
${ }^{1}$ In addition, Group companies (included in the consolidated financial statements) held bonds with a nominal amount of EUR 50 million as at the reporting date.
${ }^{2}$ AM Best debt rating; S\&P debt rating.
On iR September 2023, Talanx AG drew down a EUR 750 million credit line in the form of a subordinated bond under the master agreement concluded with HDI V.a.G. in 2021. This credit line was repaid in full as at the reporting date.
FAIR VALUES OF SUBORDINATED LIABILITIES MEASURED AT AMORTISED COST
| EUR million | 30.06 .2024 | 31.12 .2023 |
|---|---|---|
| Amortised cost | 4,512 | 5,262 |
| Unrealised gains/losses | $-361$ | $-375$ |
| Fair value | 4,151 | 4,887 |
(10) Insurance contract liabilities
Reconciliation of changes in the carrying amount
ANALYSIS BY REMAINING COVERAGE AND INCURRED CLAIMS
| EUR million | Liability for remaining coverage | Liability for incurred claims | Total $^{1}$ | |||
|---|---|---|---|---|---|---|
| Contracts not measured under the PAA | ||||||
| Excluding loss component | Loss component | Estimates of present value of future cash flows | Risk adjustment for nonfinancial risk | |||
| 2024 | ||||||
| Carrying amount of assets as at the start of the reporting period | $-1,459$ | 3 | 365 | 55 | 3 | $-1,032$ |
| Carrying amount of liabilities as at the start of the reporting period | 60,938 | 782 | 45,867 | 21,805 | 872 | 130,264 |
| Net opening balance | 59,479 | 786 | 46,232 | 21,860 | 875 | 129,231 |
| IAS 8 adjustments | - | - | - | - | - | - |
| Changes in the basis of consolidation | 265 | 60 | $-2$ | - | - | 323 |
| Disposal groups in accordance with IFRS 5 | - | - | - | 1 | - | 1 |
| Other changes | 1 | - | - | - | - | 1 |
Changes in the statement of income and other comprehensive income
Insurance revenue
| Contracts measured under the modified retrospective approach | $-1,572$ | - | - | - | - | $-1,572$ |
|---|---|---|---|---|---|---|
| Contracts measured under the fair value approach | $-2,423$ | - | - | - | - | $-2,423$ |
| Contracts measured under the full retrospective approach and contracts after transition to IFRS 17 | $-19,611$ | - | - | - | - | $-19,611$ |
| Total insurance revenue | $-23,606$ | - | - | - | - | $-23,606$ |
Insurance service expenses
| Incurred claims and other insurance service expenses | - | $-153$ | 11,522 | 5,531 | 66 | 16,966 |
|---|---|---|---|---|---|---|
| Amortisation of insurance acquisition cash flows | 2,472 | - | - | - | - | 2,472 |
| Losses and reversals of losses on onerous contracts | 1 | 303 | - | - | - | 303 |
| Adjustments to liability for incurred claims | - | - | $-286$ | 589 | $-88$ | 216 |
| Total insurance service expenses | 2,472 | 150 | 11,237 | 6,120 | $-22$ | 19,957 |
| Investment components | $-5,218$ | - | 5,215 | 2 | - | - |
| Insurance service result | $-26,352$ | 150 | 16,452 | 6,123 | $-22$ | $-3,650$ |
| Net insurance financial result | 1,242 | 18 | 28 | 15 | 4 | 1,307 |
| Effect of movements in exchange rates | 13 | - | 619 | 36 | 3 | 671 |
| Other changes | 45 | 9 | 21 | $-75$ | - | - |
| Total changes in the statement of income and other comprehensive income | $-25,052$ | 177 | 17,120 | 6,099 | $-15$ | $-1,672$ |
| Cash flows | ||||||
| Premiums received | 26,713 | - | - | - | - | 26,713 |
| Claims and other insurance service expenses paid, including investment components | - | - | $-14,583$ | $-5,055$ | - | $-19,638$ |
| Insurance acquisition cash flows | $-2,449$ | - | - | - | - | $-2,449$ |
| Other cash flows | 1 | - | - | - | - | 1 |
| Total cash flows | 24,265 | - | $-14,583$ | $-5,055$ | - | 4,628 |
| Net closing balance | 58,959 | 1,023 | 48,767 | 22,905 | 860 | 132,513 |
| Carrying amount of assets as at the end of the reporting period | $-1,304$ | 1 | 232 | 76 | 2 | $-993$ |
| Carrying amount of liabilities as at the end of the reporting period | 60,263 | 1,021 | 48,535 | 22,829 | 858 | 133,506 |
[^0]
[^0]: ${ }^{1}$ The insurance acquisition cash flows of EUR 19 (17) million recognised as assets in the Retail International segment are derecognised in the subsequent year at the latest.
ANALYSIS BY MEASUREMENT COMPONENT - CONTRACTS NOT MEASURED UNDER THE PAA
New business analysis - contracts not measured under the PAA
EFFECT OF INSURANCE CONTRACTS ISSUED THAT WERE INITIALLY RECOGNISED IN THE PERIOD
| EUR million | Profitable contracts issued |
One contracts issued |
|---|---|---|
| 6M 2024 | ||
| Insurance acquisition cash flows | 1,134 | 4 |
| Claims and other insurance service expenses payable |
15,600 | 424 |
| Estimates of present value of future cash outflows | 16,735 | 429 |
| Estimates of present value of future cash inflows | $-20,312$ | $-395$ |
| Risk adjustment for non-financial risk | 296 | $-16$ |
| Contractual service margin ${ }^{1}$ | 3,282 | - |
| Losses recognised on initial recognition | - | 18 |
| 6M 2023 | ||
| Insurance acquisition cash flows | 797 | 5 |
| Claims and other insurance service expenses payable |
12,737 | 317 |
| Estimates of present value of future cash outflows | 13,534 | 321 |
| Estimates of present value of future cash inflows | $-16,310$ | $-291$ |
| Risk adjustment for non-financial risk | 212 | 19 |
| Contractual service margin ${ }^{1}$ | 2,564 | - |
| Losses recognised on initial recognition | - | 50 |
${ }^{1}$ The CSM is attributable to the following segments: Retail Germany - Property/Casualty EUR 30 (44) million, Retail Germany - Life EUR 147 (156) million, Retail International EUR 108 (60) million (of which EUR 44 (39) million is attributable to the life insurance business), Property/Casualty Reinsurance EUR 2,911 (2,271) million, Life/Health Reinsurance EUR 191 (158) million and Corporate Operations EUR 185 (126) million. Consolidation had an effect of EUR -292 ( -250 ) million.
No material contracts were acquired in the course of a portfolio transfer or business combination in accordance with IFRS 3 in the reporting period.
Contractual service margin
The closing balance of the CSM from reinsurance contracts held increased by EUR 2,337 million to EUR 13,760 (11,423) million. The change in the CSM can be attributed to the segments as follows: Retail Germany - Property/Casualty: EUR 8 million, Retail Germany Life: EUR 211 million, Retail International: EUR -35 million, Property/ Casualty Reinsurance: EUR 1,701 million, Life/Health Reinsurance: EUR 490 million and Corporate Operations: EUR 110 million. Consolidation had an effect of EUR -147 million.
Significant management judgement and estimates
Fulfilment cash flows
Fulfilment cash flows comprise estimates of future cash flows, an adjustment to reflect the time value of money and the financial risks related to those cash flows (to the extent that these risks are not included in the estimates of cash flows), and a risk adjustment for non-financial risk.
Future cash flows
Future cash flows are the expected value (or the probability-weighted mean) of the full range of possible outcomes. Stochastic models are used in the case of significant interdependencies between cash flows in different scenarios. The Group uses all reasonable and supportable information available without undue cost or effort at the end of the reporting period in an unbiased way when estimating future cash flows. Estimates of future cash flows reflect the Group's perspective on conditions as at the reporting date; the estimates of the relevant market variables are consistent with observable market prices for those variables. Estimates of cash flows take into account current expectations of future events that might affect those cash flows. Changes in the law are taken into account as soon as they have been substantively enacted. Assumptions as to future inflation scenarios are derived from the difference between the yields on nominal government bonds and yields on inflation-linked government bonds.
The core assumptions in the life insurance business (including Life/ Health Reinsurance) relate to mortality, longevity and policyholder behaviour, and vary by product type. They are developed using recognised techniques and sources. We check our experience by performing regular studies, the results of which are included in the measurement of existing contracts. To determine how changes in discretionary cash flows for these contracts are identified, the Group generally defines its commitment as the return implicit in the estimate of the fulfilment cash flows at inception of the contract. This is updated to reflect current assumptions that relate to financial risk. Fulfilment cash flows under the VFA are determined on a marketconsistent basis using actuarial (stochastic) modelling, taking account of contractual options and guarantees.
In the case of investment contracts with some discretionary participation features that are measured under the general measurement model (GMM) and for which the Group, taking account of the statutory framework, has discretion over the amount or timing of payments to policyholders, changes in the discretionary cash flows are assumed to relate to future services and hence to result in an adjustment to the contractual service margin. At inception, the Group models the expected interest payable on the policyholder's account balance, based on a pool of assets after deduction of a spread. The effects of changes in the spread and the resulting impact on fulfilment cash flows lead to an adjustment to the contractual service margin. This also applies to financial risk assumptions.
In the case of the property/casualty business (including Property/ Casualty Reinsurance), the Group uses recognised actuarial methods to calculate estimated claims that have been incurred but not yet reported. The ultimate liability for all lines is measured by calculating the anticipated ultimate loss ratios using actuarial techniques such as the chain ladder method. These are based on the assumption that the Group's historical claims development can suggest patterns in future claims development. The amount recognised is the realistically estimated future settlement amount. The uncertainty in actuarial projections is greater for more recent underwriting years. This can be reduced using a wide range of additional information on rate and condition improvements in business written and claims trends. In the case of reinsurance, these calculations use the information received from the cedants. For missing cedant settlements with larger premium volumes, supplementary or complete estimates may be made of the corresponding profit items, assets and liabilities including the relevant retrocessions. Missing cedant settlements with low premium volumes were recognised in the subsequent year. In addition, individual cost estimates are calculated for certain known insurance claims. These estimates, which are based on the facts known when the relevant reserve was recognised, are determined by the Loss Adjustment department and take general principles of insurance practice, the loss situation and the agreed level of cover into account. The loss reserves are remeasured at regular intervals if new information becomes available that suggests this is appropriate.
Large losses are considered separately when using statistical methods. Based on an evaluation of various observable information, losses can be classified as large individual loss events. Related liabilities are measured in a separate process based on estimates of individual contracts.
Discount rates
An insurance liability is considered illiquid over a specific period if the insurer can hold assets over this period with a very low risk of a forced sale. This depends on the timing and predictability of the cash flows associated with the liability, which in turn are affected by product characteristics such as repurchase options. Accordingly, an insurance contract's illiquidity features are directly related to the predictability of its cash flows. This means it can be fundamentally assumed that all characteristics of an insurance contract (or a group of insurance contracts) can be described and measured in full by the characteristics of their resulting cash flows. This is particularly true of the contract's liquidity features, which are consistent with the regulations of IFRS 17.B83 (a) and B84. This refers to the liquidity characteristics of the yield curve (illiquid risk-free yield curve) and uncertainty about the amount and timing of cash flows, without also focusing on the liquidity of the contract.
Double counting and omissions are to be avoided when measuring insurance contracts. This requirement is a central principle of IFRS (see IFRS 17.B74). If an entity considers different levels of predictability for the cash flows of different product types by including individual illiquidity premiums in the discount rates of the respective product types at the same time as including impairment losses for financial risks in the estimate of future cash flows, the uncertainty about the timing and amount of cash flows would be double-counted in the IFRS 17 measurement. Accordingly, all uncertainties for which impairment has already been recognised in the measurement of the liability must not be taken into account by way of a reduced illiquidity premium in the composition of the yield curve, as this would result in double counting.
In summary, Talanx has opted to reflect uncertainties in cash flows caused by fluctuations in the underlying financial parameters (i.e. financial risk) in the estimate of future cash flows instead of implicitly by reducing the illiquidity premium through the adjustment of the risk-free, fully illiquid yield curve. This means that Talanx applies the risk-free, fully illiquid yield curve referenced in IFRS 17.B84 to all business transactions in the same currency and thus accounts for all material uncertainties in the estimate of future cash flows or in the risk adjustment for non-financial risks.
The discount rate is based on the bottom-up approach, under which the discount rate is determined as the risk-free return, adjusted to account for differences in liquidity features between financial assets used to determine the risk-free return and cash flows of the liability in question (also referred to as the "illiquidity premium"). The riskfree return was determined using swap rates available on the market in the same currency as the product being measured. If no swap rates are available, highly liquid government bonds are used. The illiquidity premium is calculated using reference portfolios based on assets specific to the Talanx Group (applying the top-down approach) to ensure better matching with liabilities and stable results. Assessing the liquidity features of cash flows from liabilities requires making judgements. The illiquidity premium was estimated based on observable market liquidity premiums for financial assets, which were adjusted to reflect the illiquidity characteristics of the cash flows from the liability. ${ }^{1}$ The method used to calculate the illiquidity premium is similar to the EIOPA method for calculating the volatility adjustment under Solvency 2.
The illiquidity premium is calculated as the risk-adjusted return of a reference portfolio specific to the Talanx Group. The reference portfolio specific to the Talanx Group includes a mix of government and corporate bonds. The return on the reference portfolio was adjusted to eliminate the effects of expected and unexpected credit risks. These adjustments were estimated using information from observable historical loss rates and credit default swaps in connection with the bonds included in the reference portfolio.
Observable market information for a period of up to 50 years, depending on the currency in question, is available to calculate the discount rates. For the euro, for example, market data for a period of up to 50 years is used. For the non-observable period, state-of-the-art methods were used to interpolate the yield curve for a final rate. In this connection, we use an extrapolation method for the liquid portion of the yield curve that is similar to the method used in the latest Solvency 2 review. The final rate is comparable to the ultimate forward rate under Solvency 2. To calculate the illiquidity premium curve for the euro and the US dollar, we opted to use Smith-Wilson optimisation to develop a maturity-dependent curve that results in a final illiquidity premium similar to the ultimate forward rate and that is calculated as the stable long-term average of the illiquidity premium.
The following yield curves are used to discount estimated future cash flows:
1 The illiquidity premium is calculated only for the main currencies. For the euro and the US dollar, we use a curve for the illiquidity premium that depends on the assets' maturity.
YIELD CURVES USED
| EUR | USD | GBP | AUD | CAD | BRL | |
|---|---|---|---|---|---|---|
| 30.06.2024 | ||||||
| 1 year | 0.036599 | 0.053394 | 0.052976 | 0.049473 | 0.046817 | 0.110405 |
| 5 years | 0.030093 | 0.045856 | 0.043650 | 0.046242 | 0.036784 | 0.121309 |
| 10 years | 0.030543 | 0.049250 | 0.042650 | 0.048220 | 0.036876 | 0.122118 |
| 15 years | 0.031156 | 0.049356 | 0.043586 | 0.049556 | 0.036548 | 0.115913 |
| 20 years | 0.030187 | 0.048940 | 0.043962 | 0.049333 | 0.036383 | 0.106553 |
| 25 years | 0.029166 | 0.047325 | 0.043547 | 0.047910 | 0.036285 | 0.097961 |
| 30 years | 0.029040 | 0.046250 | 0.043269 | 0.046186 | 0.036219 | 0.090757 |
| 50 years | 0.030471 | 0.040432 | 0.039659 | 0.043346 | 0.036125 | 0.072817 |
| 31.12.2023 | ||||||
| 1 year | 0.036075 | 0.050854 | 0.050997 | 0.046455 | 0.043537 | 0.101278 |
| 5 years | 0.025919 | 0.041036 | 0.037194 | 0.042250 | 0.035620 | 0.099844 |
| 10 years | 0.027342 | 0.046590 | 0.036483 | 0.045210 | 0.035363 | 0.104516 |
| 15 years | 0.028315 | 0.047025 | 0.037619 | 0.046790 | 0.034728 | 0.101740 |
| 20 years | 0.027677 | 0.046759 | 0.037971 | 0.046612 | 0.034411 | 0.094931 |
| 25 years | 0.027066 | 0.045391 | 0.037536 | 0.045194 | 0.034221 | 0.088253 |
| 30 years | 0.027269 | 0.044480 | 0.037246 | 0.043384 | 0.034094 | 0.082511 |
| 50 years | 0.029525 | 0.037807 | 0.033063 | 0.040780 | 0.033666 | 0.067920 |
Contractual service margin
The insurance services provided in a reporting period are included in the amount of the contractual service margin recognised in profit or loss for that period. The amount is determined on the basis of the number of coverage units provided in the reporting period, based on the volume of coverage provided and the expected coverage period. IFRS 17 does not contain any requirements as to the method to be used to determine the volume of the insurance coverage. An appropriate method is selected for each group of contracts. In the case of insurance contracts that offer both insurance coverage and invest-ment-related services, measurement of the volume of insurance services provided includes determining the relative weighting of the services provided to the policyholders by the insurance coverage. The way in which the services provided change in the course of the coverage period is determined and the individual components are then aggregated.
The Group determines the relative weighting of the insurance service provided under the insurance coverage by accounting for the service as if it had been offered independently. The ratio is then calculated based on the ratio of the respective services for the financial year in relation to the expected total services.
[^0]
[^0]: ${ }^{1}$ The illiquidity premium is calculated only for the main currencies.
For the euro and the US dollar, we use a curve for the illiquidity premium that depends on the assets' maturity.
Risk adjustment for non-financial risk
The non-financial risk adjustment is used to compensate for uncertainty regarding the amount and timing of cash flows in connection with the non-financial risk (e.g. insurance risk, cost risk, inflation risk and, in particular, policyholder behaviour risk). The Talanx Group uses two methods to calculate the non-financial risk adjustment, reflecting its different business models. Primary Insurance applies the confidence level method with a Group-wide confidence level of $75 \%$ (exception: $65 \%$ for HDI Global Specialty SE, Hannover). The risk adjustment is determined at entity level, but risk diversification between entities is not taken into account. We apply a pricing margin approach for our Reinsurance Division and our internal reinsurance business at Talanx AG. This approach is based on the fact that the need to compensate for uncertain cash flows is already addressed during premium calculation. The surcharges determined there are applied to the cash flows and hence also form the risk adjustment under IFRS 17. This approach does not use the confidence level as an input.
(11) Notes payable and loans
| EUR million | 30.06 .2024 | 31.12 .2023 |
|---|---|---|
| Talanx AG notes payable | 2,481 | 1,746 |
| Hannover Rück SE | 747 | 747 |
| Hannover Re Real Estate Holdings, Inc. mortgage loans | 210 | 206 |
| HR GLL Central Europe GmbH \& Co. KG mortgage loans | 205 | 206 |
| Real Estate Asia Select Fund Limited mortgage loans | 207 | 217 |
| Loans from infrastructure investments | 31 | 54 |
| Hannover Rück SE loans | 140 | 138 |
| E+S Rückversicherung AG loans | 31 | 31 |
| Liabilities from real estate investments of KOP4 GmbH \& Co. KG | 44 | 44 |
| Other | - | 6 |
| Total | 4,097 | 3,395 |
NOTES PAYABLE
| EUR million | Nominal amount Coupon | Maturity | Rating ${ }^{1}$ | Issue | 30.06 .2024 | 31.12 .2023 |
|---|---|---|---|---|---|---|
| These senior unsecured bonds have a fixed term and can only be called for extraordinary reasons. | 735 | - | ||||
| Talanx AG | 750 Fixed (2.5\%) | 2024/2026 | $(- ;-)$ | These senior unsecured bonds have a fixed term and can only be called for extraordinary reasons. | 748 | 748 |
| Talanx AG | 750 Fixed (4.0\%) | 2022/2029 | $(- ;-)$ | These senior unsecured bonds have a fixed term and can only be called for extraordinary reasons. | 499 | 498 |
| Talanx AG | 500 Fixed (4.0\%) | 2022/2029 | $(- ; A+)$ | These senior unsecured bonds have a fixed term and can only be called for extraordinary reasons. | 500 | 500 |
| Talanx AG | 500 Fixed (2.5\%) | 2014/2026 | $(- ; A+)$ | These unsubordinated unsecured bonds have a fixed term. | 747 | 747 |
| Hannover Rück SE | Fixed 750 (1.125\%) |
2018/2028 | $(- ; A A-)$ | 3,229 | 2,493 |
${ }^{1}$ AM Best debt rating; S\&P debt rating.
FAIR VALUE OF NOTES PAYABLE AND LOANS
| EUR million | 30.06 .2024 | 31.12 .2023 |
|---|---|---|
| Amortised cost | 4,097 | 3,395 |
| Unrealised gains/losses | $-48$ | - |
| Fair value | 4,049 | 3,395 |
Notes to the consolidated statement of income
(12) Insurance revenue
| EUR million | 6M 2024 | 6M 2023 |
|---|---|---|
| Contracts not measured under the PAA | ||
| Experience adjustments related to past or current services | 451 | 536 |
| CSM recognised for services provided | 2,027 | 1,712 |
| Changes in risk adjustment for non-financial risk for risk expired | 371 | 329 |
| Expected incurred claims and other insurance service expenses | 10,971 | 10,068 |
| Amortised insurance acquisition cash flows | 987 | 682 |
| Total | 14,807 | 13,327 |
| Contracts measured under the PAA | 8,799 | 7,535 |
| Total insurance revenue | 23,606 | 20,862 |
(13) Net insurance financial result
The following table shows the Group's net insurance financial result, divided into items through profit or loss and items through other comprehensive income.
| EUR million | 6M 2024 | 6M 2023 ${ }^{1}$ |
|---|---|---|
| Investment income for own risk | 3,207 | 2,676 |
| Investment expenses for own risk | $-1,020$ | $-950$ |
| Investment income for the account and risk of life insurance policyholders | 1,273 | 827 |
| Investment expenses for the account and risk of life insurance policyholders | $-25$ | $-48$ |
| Amounts recognised in other comprehensive income | $-1,819$ | 1,146 |
| Total net investment income in the statement of income and other comprehensive income | 1,615 | 3,652 |
| Insurance finance income and expenses | ||
| Net insurance finance income or expenses from insurance contracts issued | ||
| Changes in the fair value of underlying items of direct participating contracts | $-1,022$ | $-1,928$ |
| Interest accreted | $-883$ | $-574$ |
| Effect of changes in interest rates and other financial assumptions | 652 | $-344$ |
| Net foreign exchange loss | $-627$ | 278 |
| Total net finance income or expenses from insurance contracts issued in the statement of income and other comprehensive income | $-1,881$ | $-2,568$ |
| of which recognised in profit or loss | $-3,343$ | $-1,532$ |
| of which recognised in other comprehensive income | 1,462 | $-1,036$ |
| Net insurance finance income or expenses from reinsurance contracts held | ||
| Interest accreted | 65 | 49 |
| Effect of changes in interest rates and other financial assumptions | 3 | 34 |
| Currency effects | 109 | $-46$ |
| Total net insurance finance income or expenses from reinsurance contracts held in the statement of income and other comprehensive income | 177 | 38 |
| of which recognised in profit or loss | 174 | 19 |
| of which recognised in other comprehensive income | 3 | 19 |
| Total net insurance financial result in the statement of income and other comprehensive income | $-1,704$ | $-2,530$ |
| Correction for currency result from net insurance financial result | 519 | $-232$ |
| Total net insurance financial result before currency effects in the statement of income and other comprehensive income | $-1,185$ | $-2,762$ |
| Total net insurance financial and investment result before currency effects in the statement of income and other comprehensive income | 430 | 890 |
| of which recognised in profit or loss | 784 | 760 |
| of which recognised in other comprehensive income | $-354$ | 129 |
[^0]
[^0]: ${ }^{1}$ Adjusted in accordance with IAS 8, see 2023 Annual Report, "Accounting policies" section of the Notes.
(14) Net investment income
NET INVESTMENT INCOME
| EUR million | 6M 2024 | 6M 2023 |
|---|---|---|
| Income from real estate | 230 | 217 |
| Dividends ${ }^{1}$ | 93 | 65 |
| Current interest income | 1,964 | 1,651 |
| Income from investment contracts | 149 | 87 |
| Current income from investment funds | 158 | 149 |
| Other income | 62 | 95 |
| Ordinary investment income | 2,657 | 2,264 |
| Income from reversal of impairment losses | 2 | - |
| Realised gains on disposal of investments | 77 | 44 |
| Investment income from fair value changes | 471 | 367 |
| Investment income for own risk | 3,207 | 2,676 |
| Realised losses on disposal of investments and expenses | $-196$ | $-299$ |
| Investment losses from fair value changes | $-436$ | $-353$ |
| Expenses from investment contracts | $-147$ | $-86$ |
| Depreciation of/impairment losses on investment property | ||
| Depreciation | $-33$ | $-29$ |
| Change in expected credit loss | 4 | 9 |
| Amortisation of/impairment losses on other investments | ||
| Amortisation | $-16$ | $-16$ |
| Investment management expenses | $-97$ | $-93$ |
| Other expenses | $-99$ | $-82$ |
| Investment expenses for own risk | $-1,020$ | $-950$ |
| Net investment income for own risk | 2,186 | 1,726 |
| Investment income for the account and risk of life insurance policyholders | 1,273 | 827 |
| Investment expenses for the account and risk of life insurance policyholders | $-25$ | $-48$ |
| Net investment income for the account and risk of life insurance policyholders | 1,248 | 779 |
| Net investment income | 3,434 | 2,506 |
[^0]
(15) Net investment income by investment type
Including net investment income for the account and risk of life insurance policyholders (EUR 1,248 [779] million), total net investment income as at the reporting date amounted to EUR 3,434 (2,506) million.
NET INVESTMENT INCOME BY ASSET PER CLASS
EUR million
Shares in affiliated companies, associates and joint ventures
Investment property
Financial instruments measured at cost
Financial instruments measured
at fair value through other comprehensive income
Debt instruments
Equity instruments
Financial instruments measured
at fair value through profit or loss
Debt instruments
2,186
43
9
49
36
11
1,654
1,254
31
38
Financial instruments measured
at fair value through profit or loss
Debt instruments
2,186
43
9
49
36
135
124
29
1,726
[^0]: 1 Net income from shares in associates and joint ventures is reported under dividends.
(16) Other income/expenses
OTHER INCOME/EXPENSES
| EUR million | 6M 2024 | 6M 2023 |
|---|---|---|
| Other income | ||
| Income from services, rents and commissions | 237 | 178 |
| Recoveries on receivables previously written off | - | 2 |
| Income from the disposal of property, plant and equipment | 1 | 3 |
| Income from the reversal of other non-technical provisions | 13 | 15 |
| Interest income | 74 | 38 |
| Miscellaneous other income | 172 | 11 |
| Total | 498 | 247 |
| Other expenses | ||
| Other interest expense | $-70$ | $-59$ |
| Depreciation, amortisation and impairment losses | $-37$ | $-19$ |
| Personnel expenses | $-29$ | $-11$ |
| Expenses for services and commissions | $-129$ | $-89$ |
| Other taxes | $-59$ | $-36$ |
| Expenses for restructuring provisions | $-5$ | - |
| Miscellaneous other expenses | $-702$ | $-499$ |
| Total | $-1,031$ | $-713$ |
| Other income/expenses | $-534$ | $-466$ |
| Of which monetary gains and losses according to IAS 29 | 35 | 26 |
The "Other income/expenses" item does not generally include personnel expenses incurred by our insurance companies that are allocated to the individual functions concerned during cost object accounting and contained in investment expenses and insurance service expenses. The same principle also applies to depreciation and amortisation of, and impairment losses on, intangible and other assets at our insurance companies.
Other disclosures
Number of employees
The Group's total workforce as at the reporting date numbered 29,572 $(27,863)$.
Related party disclosures
Related parties in the Talanx Group include HDI Haftpflichtverband der Deutschen Industrie Versicherungsverein auf Gegenseitigkeit (HDI V.a.G.), Hannover, which directly holds the majority of the shares of Talanx AG, all subsidiaries that are not consolidated on the grounds of insignificance and associates and joint ventures. Pension funds ("Versorgungskassen") that pay benefits in favour of employees of Talanx AG or one of its related parties after their employment has ended also fall within this category. Individuals classed as related parties are the members of the Board of Management and the Supervisory Board of Talanx AG and HDI V.a.G.
Transactions between Talanx AG and its subsidiaries (including structured entities) are eliminated in the course of consolidation and are therefore not disclosed in the Notes. In addition, HDI V.a.G. conducts primary insurance business in the form of co-insurance, with the lead insurer being HDI Global SE, Hannover. In accordance with the Articles of Association of HDI V.a.G., the insurance business is split uniformly in the ratio of $0.1 \%$ (HDI V.a. G.) to 99.9\% (HDI Global).
On 15 April 2024, Talanx AG issued a senior unsecured bond with a value of EUR 750 million as part of a private placement. The bond's sole subscriber was HDI V.a.G. The issued bond is listed on the Luxembourg Stock Exchange, matures on 23 July 2026, has a fixed coupon of $2.5 \%$ per annum and was issued at a price of $97.798 \%$.
Talanx AG had repaid the master agreement concluded with HDI V.a.G. in 2021 and valid until 2026, which was structured in the form of a subordinated bond, in full as at the reporting date.
Talanx AG issued two senior unsecured bonds with a total volume of EUR 1.25 billion on 18 October 2022. EUR 750 million of this was subscribed by HDI V.a.G.
Other business relationships with unconsolidated companies or with associates and joint ventures are insignificant overall.
Other disclosures on financial instruments
As at the reporting date, the Group recognised securities in the "financial instruments measured at fair value through OCI" category that were sold to third parties with a repurchase commitment at a fixed price (genuine repurchase transactions). This is because the material opportunities and risks in connection with the financial
assets remained within the Group. As at the reporting date, the carrying amount of transferred financial assets from repo transactions was EUR 232 (476) million with that of the associated liabilities at EUR 233 (462) million. The difference between the amount received for the transfer and the amount agreed for the return of the assets is allocated for the term of the repurchase transaction and recognised in net investment income.
Litigation
We were not involved in any significant new litigation in the reporting period or at the end of the reporting period in comparison to 31 December 2023.
Earnings per share
Earnings per share is calculated by dividing the Group net income attributable to the shareholders of Talanx AG by the average number of shares outstanding. There were no dilutive effects requiring to be recognised separately when calculating earnings per share, either at the reporting date or in the prior year. In the future, earnings per share may be potentially diluted as a result of share or rights issues from contingent or authorised capital.
EARNINGS PER SHARE
| 6M 2024 | 6M 2023 | |
|---|---|---|
| Net income attributable to shareholders of Talanx AG used to calculate earnings per share (EUR million) | 1,090 | 827 |
| Weighted average number of ordinary shares outstanding | 258,228,991 | 253,350,943 |
| Basic earnings per share (EUR) | 4.22 | 3.26 |
| Diluted earnings per share (EUR) | 4.22 | 3.26 |
Dividend per share
In the second quarter of 2024, a dividend of EUR 2.35 per share was paid for financial year 2023 (in 2023 for financial year 2022: EUR 2.00), resulting in a total distribution of EUR 607 (507) million.
Contingent liabilities and other financial commitments
As at 30 June 2024, the amounts used to collateralise potential technical obligations from ILS transactions in the Reinsurance Division increased to EUR 6,960 (5,112) million. Beyond this, there were no significant changes in contingent liabilities or other financial commitments in the reporting period compared with 31 December 2023.
Revenue
Revenue from contracts with customers covered by IFRS 15 is largely recognised over time and can be broken down as follows:
REVENUE CATEGORY
| EUR million | 6M 2024 | 6M 2023 |
|---|---|---|
| Capital management services and commission ${ }^{1}$ | 122 | 94 |
| Other insurance-related services ${ }^{2}$ | 116 | 85 |
| Income from infrastructure investments ${ }^{3}$ | 33 | 47 |
| Total revenue ${ }^{4}$ | 271 | 225 |
${ }^{1}$ Largely time-based revenue recognition.
${ }^{2}$ Largely at a point in time revenue recognition.
${ }^{3}$ Time-based revenue recognition.
${ }^{4}$ Revenue is recognised in the statement of income under "7.a. Other income" EUR 227 (167) million and under "4.a. Investment income for own risk" EUR 44 (58) million.
Events after the end of the reporting period
At the beginning of July 2024, tropical cyclone "Beryl" hit the Caribbean, parts of Central America and the United States, causing extensive damage. The extent of the losses insured by our subsidiary Hannover Rück SE cannot yet be conclusively estimated, but the overall impact of large losses is expected to lie in the high doubledigit to low triple-digit million range and is unlikely to exceed our expectations for such events in the third quarter.
Prepared and hence authorised for publication on 6 August 2024 in Hannover.
The Board of Management
Dr Jan Wicke
Review Report
To Talanx AG, Hannover
We have reviewed the condensed consolidated interim financial statements - comprising the consolidated balance sheet, consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow statement and selected explanatory notes - and the interim group management report of Talanx AG, Hanover, for the period from January 1 to June 30, 2024 which are part of the half-year financial report pursuant to $\$$ (Article) 115 WpHG ("Wertpapierhandelsgesetz": German Securities Trading Act). The preparation of the condensed consolidated interim financial statements in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and of the interim group management report in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports is the responsibility of the Company's Board of Managing Directors. Our responsibility is to issue a review report on the condensed consolidated interim financial statements and on the interim group management report based on our review.
We conducted our review of the condensed consolidated interim financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with moderate assurance, that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports. A review is limited primarily to inquiries of company personnel and analytical procedures and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot express an audit opinion.
Based on our review, no matters have come to our attention that cause us to presume that the condensed consolidated interim financial statements have not been prepared, in all material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU nor that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the German Securities Trading Act applicable to interim group management reports.
Hanover, August 6, 2024
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
sgd. Martin Eibl
Sgd. ppa. Philipp Rütter
Wirtschaftsprüfer
Wirtschaftsprüfer
(German Public Auditor)
(German Public Auditor)
Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the material opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Hannover, 6 August 2024
Board of Management
Laghdod
Dr Wilm Langenbach
Dr Edgar Puls
Secreting
Caroline Schlienkamp
Jens Warkentin
Dr Jan Wicke
Contact information
Talanx AG
HDI-Platz 1
30659 Hannover
Germany
Telephone +49 511 3747-0
Fax
$+495113747-2525$
www.talanx.com
Group Communications
Andreas Krosta
Telephone +49 511 3747-2020
[email protected]
Investor Relations
Bernd Sablowsky
Telephone +49 511 3747-2793
Fax +49 511 3747-2286
[email protected]
Financial calendar 2024
14 November
Quarterly Statement as at 30 September
11 December
Capital Markets Day