Our internal control system

Another key element of the overall system is the Framework Guideline on the Internal Control System (ICS). The purpose of this set of rules is to ensure systematic execution of our company strategy with a special eye to capital protection. In addition, we thereby support our strategic action fields of “Corporate Governance” and “Compliance”. In accordance with these principles, the Framework Guideline puts in place a consistent appreciation of controls as well as a uniform procedure and standards for implementation of the ICS across all organisational units of Hannover Re.

The Framework Guideline defines concepts, stipulates responsibilities and provides a guide for the description of controls. In addition, it contributes to the accomplishment of internal objectives and the fulfilment of external requirements imposed on Hannover Re. The ICS consists of systematically structured organisational and technical measures/controls within the enterprise. It serves, inter alia, to safeguard compliance with guidelines and to reduce risks in the interests of secure execution of company strategy. This includes, among other things:

• Documentation of the controls within processes, especially in accounting
• Principle of dual control
• Separation of functions
• Technical plausibility checks and access privileges within the systems

In the area of Group accounting, processes with integrated controls ensure the completeness and accuracy of the consolidated financial statement. These processes for the organisation and implementation of consolidation tasks and for the preparation of the consolidated financial statement as well as the accompanying controls are documented and are subject to regular review. All internal Group accounting principles are collated in an Accounting Manual that is available in IT-supported form to all relevant organisational units and all staff of the Hannover Re Group.

Tested by independent auditors, the IFRS reporting of the entities included in the consolidated financial statement is carried out using an intranet-based IT application. The individual items of the balance sheet, statement of income, statement of comprehensive income, consolidated statement of changes in shareholders' equity, consolidated cash flow statement and the relevant data for the segmental reporting, notes and consolidation are stored in a database; this data can be uploaded via automatic interfaces to a consolidation system, where it can be edited. Depending upon the results of preceding reconciliation procedures for internal transactions within the Group, these values are reviewed and – as necessary – corrected. Provision is made for manual bookings in the case of extraordinary or unusual transactions. The control measures described above – among other checks – are performed in order to avoid false statements.