Overall business outlook for 2010
For non-life reinsurance we anticipate net premium growth of around 4% in the original currencies as well as a healthy profit contribution. In life and health reinsurance we are planning to grow net premium by roughly 10% in the current year. In terms of the operating profit (EBIT), we envisage a gratifying EBIT margin. Given the expected absence of special effects such as those recorded in 2009, the figure will be on a normalised level – i.e. below that of the previous year.
| Strategic targets | |||||
|---|---|---|---|---|---|
| Business group | Key data | Strategic targets | |||
| 1IVC/net premium earned | |||||
| 2MCEV increase on the basis of the adjusted MCEV of the previous year after elimination of capital changes and changes from currency effects | |||||
| 3Risk-free interest rate + cost of capital | |||||
| 4750 basis points above the risk-free return | |||||
| Non-life reinsurance | Combined ratio | ≤ 100% | |||
| Net catastrophe loss expectancy in EUR million | ≤ 500 | ||||
| EBIT margin | ≥ 10% | ||||
| IVC margin1 | ≥ 2% | ||||
| Life and health reinsurance | Gross premium growth | 10 – 12% | |||
| EBIT margin | 6 – 7% | ||||
| MCEV increase2 | ≥ 10% | ||||
| Increase in the value of new business | ≥ 10% | ||||
| Group | Investment return | ≥ 3.5%3 | |||
| Minimum return on equity | ≥ 11.1%4 | ||||
 Triple-10 target |
EBIT growth | ≥ 10% | |||
| Growth in earnings per share | ≥ 10% | ||||
| Growth in book value per share | ≥ 10% | ||||
The expected positive cash flow that we generate from the technical account and our investments should – subject to stable exchange rates – lead to further growth in our asset portfolio. In the area of fixed-income securities we continue to stress the high quality and diversification of our portfolio. We are targeting a return on investment of 3.5% for 2010.
Bearing in mind the favourable market conditions described above in non-life and life/health reinsurance as well as our strategic orientation, we are looking forward to another good financial year in 2010. We expect our gross and net premium volume in total business to grow by about 5%.
For the 2010 financial year one positioning is such that we have a thoroughly realistic chance of building on the good performance of 2009 – adjusted for non-recurring effects. As things currently stand, we anticipate a return on equity of at least 15%. This is subject to the premise that the burden of catastrophe losses does not significantly exceed the expected level of around EUR 500 million and that there are no drastically adverse movements on capital markets. As in past years, we are aiming for a dividend in the range of 35% to 40% of Group net income.