Investments

In view of the low yield level on government bonds and the reduced risk premiums on corporate bonds, we do not anticipate any significant improvements in investment income. What is more, we believe that there is an increased probability of a rise in yield curves, as a consequence of which equity impairments from medium- to long-dated bonds are possible.

We are keeping a very close eye on stock markets in view of the continued anticipated volatility. When contemplating our potential re-entry into equity investments, we shall also take into consideration the changes in IFRS accounting for financial instruments that are currently under discussion.

Our strategy of stepping up investments in real estate will continue in 2010. We anticipate further attractive opportunities here in our focus markets of Germany and the United States.

When it comes to alternative investments, we shall invest within the limits of our investment strategy since we see here a means of risk diversification and a chance to boost our return.