1 11/ 12 Statistics Federa Financia Supervisory Authority (Bundesanstat für Finanzdiensteistungsaufsicht BaFin) Reinsurance undertakings
5 Contents I Reinsurance Supervision in Authorised reinsurers Economic trends... 5 II Statistica evauation for Premiums Gross oss ratio Technica provisions Overa underwriting resut Net resut Fair vaues of investments Equity and own funds III Tabe Section Tabe 600 Aggregated baance sheets Tabe 610 Changes in investments (excuding deposits retained) Tabe 620 Equity, profit-sharing capita and subordinated iabiities Tabe 630 Technica provisions Tabe 631 Technica provisions by cass of business Tabe 640 Seected items in the profit and oss account Tabe 641 Summary of individua casses of business Tabe 660 Seected financia ratios ranked by gross premiums earned... 29
7 I Reinsurance Supervision in I Reinsurance Supervision in Authorised reinsurers BaFin granted one reinsurer authorisation to commence business operations in Four undertakings were recassified as reinsurance undertakings without business activities because they stopped writing new business. Overa, BaFin supervised a tota of 44 reinsurance undertakings or branch offices of reinsurance undertakings at the end of the year under review (previous year: 43). Tabe 1 Number of reinsurers under ega supervision of BaFin As at 31 December of the reevant year Reinsurance undertakings with business activities Reinsurance undertakings without business activities EEA branches Third-country branch Economic trends Sight overa increase in premiums. Economic osses in the year under review were cose to the ongterm average, foowing the exceptiona eve of osses recorded in 2011 the most oss-intensive year of a time. Insured osses aso decined significanty, putting the brakes on the sight upward trend in prices for reinsurance coverage observed in the first haf of the year. Overa, the increase in premiums in 2012 was therefore ony sight to moderate. The insurance industry was abe to repenish or increase its capita buffers, as the number of oss-intensive catastrophes was sma, especiay in the first nine months of the year under review. Reinsurance capacities were therefore more than adequate. Additionay, a ot of capita fowed into the market because investors were seeking a safe haven in the wake of the turmoi on the financia markets. Hurricane Sandy reieved the growing pressure on prices, especiay in North America, at the end of the year. However, one singe major oss event is not enough to push up prices across a markets, a phenomenon that had aready been observed during the renewas
8 6 I Reinsurance Supervision in 2012 process foowing the string of catastrophes in Another factor was that a growing number of primary insurers especiay arge insurance groups are increasing their retentions, which is aso putting pressure on prices. In ight of the persistenty ow interest rates, the profitabiity of the insurance business is gaining prominence. Reinsurers are therefore very interested in obtaining prices that adequatey refect their risks. This objective is being pursued even in the case of ong-term customer reationships, which in turn may encourage an opportunistic approach to buying reinsurance coverage. The resuting fiercer competition in the reinsurance market is tending to generate additiona price pressure, which the reinsurers shoud resist from a risk perspective. Third most expensive year since 1980 despite a considerabe drop in caims expenditures. Goba overa economic osses in the year under review attributabe to natura disasters amounted to approximatey US$170 biion, approaching the ong-term average of US$165 biion. Goba insured osses exceeded the ong-term average of US$50 biion by US$20 biion, representing a year-on-year decine of more than 40%. Tabe 2 Natura disasters in 2012 compared with the past ten years Year Number of events Fataities Overa osses (US$m) Insured osses (US$m) , ,000 70, , , , , ,000 42, ,000 60,000 22, , ,000 45, ,025 16,000 83,000 26, ,000 50,000 15, , , , , ,000 48, ,000 65,000 16,000 Notabe events Hurricane Sandy, drought in the USA, earthquakes in Itay, severe weather and tornadoes in the USA, Hurricane Isaac Earthquakes in Japan and New Zeaand, foods in Thaiand, tornadoes in the USA, Hurricane Irene Earthquakes in Haiti, Chie and China, heatwave in Russia, foods in Pakistan, vocanic eruption in Iceand Winter storm Kaus, tornadoes in the USA, hai storms in Centra Europe Hurricanes in the USA and the Caribbean, winter storm Emma Winter storm Kyri, foods in the UK Earthquake in Yogyakarta, Indonesia Hurricanes in the Atantic, earthquake in Pakistan Hurricanes in the Atantic, typhoon in Japan, tsunami Heatwave in Europe, earthquake in Bam, Iran ,000 60,000 14,000 Foods in Europe Source: Based on Munich Re NatCatSERVICE data In 2012, Hurricane Sandy was by far the argest oss event, accounting by itsef for overa economic osses of US$65 biion and insured osses (incuding osses covered by the Nationa Food Insurance Program) amounting to an estimated US$30 biion.
9 I Reinsurance Supervision in Sandy wi go down in the insurance industry statistics (since 1980) as the third most expensive oss. The extent of the osses caused by Hurricane Sandy is attributabe firsty to the sheer size of the wind fied: a tota of approximatey 1.5 miion square kiometres were affected an area roughy the size of France, Germany, Itay and the United Kingdom together. Secondy, the hurricane coincided with the spring high tide, with the resut that arge parts of the East Coast of the United States were hit by a storm surge of more than three metres. Thousands of residentia and commercia buidings, as we as key parts of the infrastructure, fe victim to the foods; these incuded container ports, subway stations, modern high-rise buidings, hotes, etc. The direct food damage was accompanied by a arge number of business interruption insurance caims. By contrast, wind damage caused by the hurricane was imited. The second major catastrophic event that emerged was the monthong drought in the Midwest of the United States. Juy 2012 was the hottest month ever measured in the USA and, overa, the year went into the statistics as the hottest since temperature records began in At the same time, the onged-for rains faied to materiaise. The extreme drought caused considerabe osses to agricuture, which are generay covered by the pubic/private muti-risk crop insurance protection scheme. Other sectors of the economy were aso affected. For exampe, the extreme drought adversey affected inand navigation on the Mississippi and cut power generation; the favourabe conditions aso caused widfires. Around two-thirds of the insured osses wordwide in the year under review were attributabe to these two events. Together with the osses caused by tornadoes, the USA accounted for amost 90% of a insured osses which in contrast to the previous year were mainy attributabe to the weather. In Europe, the argest insured oss was caused by a series of earthquakes in the northern Itaian region of Emiia Romagna. Despite the consideraby ower eve of caims expenditures compared with the previous year, 2012 was the third most expensive year overa for the insurance industry since The first three months of 2013 were reativey kind to the insurers, with ony a few natura disasters causing insured osses worth mentioning. Foods in Austraia and Indonesia, as we as tornadoes in the USA, are ikey to resut in insured osses running into the hundreds of miions in each case. The most spectacuar event was the exposion of a meteor about 15 to 25 kiometres high in the atmosphere above the southern Uras. The force of the pressure wave was about thirty times greater than that of a nucear bomb, damaging thousands of residentia and commercia buidings. No fataities were recorded, nor were there any appreciabe insured osses.
10 8 I Reinsurance Supervision in 2012 Tabe 3 The five biggest natura disasters in 2012 measured by overa oss Date Region Event Fataities 24 October 31 October June September 2 March 4 March 28 Apri 29 Apri 28 June 2 Juy USA, Caribbean Overa osses (US$m) Insured osses (US$m) Hurricane Sandy ,000 30,000 USA Drought ,000 USA USA USA Source: Munich Re NatCatSERVICE Severe weather/ tornadoes Severe weather/ tornadoes Severe weather/ tornadoes 15,000 17, ,000 2, ,600 2, ,000 2,000
11 II Statistica evauation for II Statistica evauation for 2011 The report on the statistics for financia year 2011 incuded the annua financia statements of 34 reinsurers (previous year: 35), pus the annua financia statements of one third-country branch (Transatantic Re). Most of them are stock corporations, one is a mutua insurance association (Versicherungsverein auf Gegenseitigkeit) and two are insurance undertakings under pubic aw. The data in the tabes beow, as we as in the Tabe Section, is based on what is known as industry revenue. This figure, which is cacuated for each insurance segment, is the tota of the forms and records submitted by the reinsurance undertakings. This not ony aows a the vaues to be reconstructed at any time, but aso enabes additiona (consistent) data to be retrieved from the data records if needed. A disadvantage of this approach is that depending on the forms and records actuay submitted the number of reporting reinsurance undertakings may differ from tabe to tabe. As far as the industry data is concerned, however, this does not have any significant impact, because it is ony pubished after a the reevant undertakings have submitted correct data, thus ensuring competeness. 1 Premiums Reinsurance coverage is offered not ony by reinsurance undertakings, but aso by primary insurers engaging in reinsurance business. The tota gross inward reinsurance premiums can be broken down as foows between reinsurers and primary insurers: Tabe 4 Gross premiums in the reinsurance business Gross premiums written ( m) Year Primary insurers Reinsurers (inward reinsurance business) Tota , , , , , , , , , , , , , , ,015.2 Gross premiums written up for the third year in succession. In the year under review, gross premiums written by reinsurers rose for the third year in succession. Growth was particuary strong in 2011, at 7.9%. Overa, gross premiums written have risen by more than one-fifth since Reinsurers ast wrote
12 10 II Statistica evauation for 2011 more premiums than in 2011 back in 2004; however, at 44, the number of reinsurers was consideraby higher then than in the year under review (35 undertakings). There is an evident trend towards concentration in the reinsurance industry. The strong rise in premiums in 2011 is ikey to have been driven by the robust growth in demand on the primary insurance markets in the emerging economies, especiay for property and casuaty insurance. The unusuay high osses in the first quarter of 2011 aso pushed up demand for coverage against risks reated to natura disasters and triggered rising reinsurance prices in the regions and insurance casses affected by natura disasters. There was aso sustained strong demand for reinsurance as a capita substitute, not east because of the persistenty ow eves of interest rates. Growth in primary insurers premium income. At approximatey 22.4%, premium income from inward reinsurance for primary insurers conducting reinsurance business grew at a much faster pace than for pure reinsurers. As a resut, the proportion of the tota inward reinsurance business accounted for by reinsurers decined from 91.4% to 90.4% in the year under review. The number of primary insurers engaging in active reinsurance increased sighty from 153 to 154 undertakings in the year under review, of which 35 were ife insurers, 12 were heath insurers and 107 were property/casuaty insurers. The decine in reinsurance acceptance from domestic ceding insurers that has been observabe for severa years continued during the year under review and amounted to 5.0% (previous year: 5.9%). Gross premiums written which had been accepted from domestic ceding insurers amounted to 11.6 biion; ten years ago, this figure was approximatey 20 biion. By contrast, the reinsurers further expanded their foreign insurance business, whose growth acceerated to 12.9% (previous year: 10.9%). Overa, reinsurance business accepted from foreign ceding insurers increased from 71.9% to 75.2% in the year under review. Ten years ago, by contrast, the share of reinsurance business accepted from domestic ceding insurers accounted for amost haf of a insurance business. Reinsurance business makes positive contribution to baance of trade in services. Measured in terms of gross premiums written, insurance business accepted from abroad by a domestic insurance undertakings in 2011 ( 37.1 biion) ceary exceeded insurance business ceded abroad ( 15.2 biion). That means that, as in previous years, domestic insurers made avaiabe more capacity to the internationa insurance market than they used themseves. The positive contribution to Germany s baance of trade in services increased sighty to 21.9 biion in the year under review (previous year: 18.5 biion). Of the gross premiums written by reinsurers, 2.7 biion was attributabe to facutative and 44.0 biion to obigatory reinsurance business. At 66.5% (previous year: 70.4%), proportiona reinsurance in the form of quota share and surpus treaties made up the argest proportion of gross premiums written. However, there are signs that the importance of proportiona reinsurance is diminishing, because its share of tota reinsurance treaties has dropped by amost tweve percentage points in the past two years.
13 II Statistica evauation for The tabe beow gives a breakdown of the reinsurers gross premiums written by cass of business: Tabe 5 Reinsurers gross premiums written by cass of business Gross premiums written Cass of business m % Genera accident 1, Liabiity 4, Motor 5, Aerospace/aviation Fire 6, Transport 1, Credit and surety 1, Aerospace/aviation iabiity Other property insurance 5, Other indemnity insurance 1, Property/casuaty insurance 27, Life 14, Heath 4, Tota insurance business 46, Persona insurance again increased its share of the tota insurance business in the year under review, growing to more than two-fifths for the first time. Ten years ago, ife and heath insurance ony accounted for just over a quarter. Growing ife expectancy and medica advances are driving fourishing ife and heath insurance markets, incuding and especiay in emerging economies. Because of the persistenty ow interest rates, there is aso continued high demand from persona insurance companies for reinsurance as a capita substitute. Gross premiums written in the property/casuaty insurance business rose by around 1 biion, with gains recorded in particuar by fire and motor insurance. By contrast, transport insurance premiums decined by around 0.5 biion. Among other factors, this trend was probaby attributabe to unsatisfactory market prices due to competition factors, together with the consequent reuctance of reinsurers to underwrite new business. Reinsurers retentions rise by 2%. Reinsurers ceded 6.3 biion (previous year: 6.6 biion) of their tota gross premiums written of 46.7 biion (previous year: 43.3 biion) to retrocessionaires. As a resut, the retrocession ratio amounted to 13.5% (previous year: 15.2%), which refects a 2% increase in reinsurers retentions. Tabe 641 of the Tabe Section provides detais of reinsurers gross and net premiums earned by cass of business in the year under review.
14 12 II Statistica evauation for Gross oss ratio Tota caims expenditures increased to 77.1%. An extraordinary string of severe natura disasters occurred in 2011, making it the most oss-intensive year of a times. Goba overa economic osses amounted to approximatey US$400 biion, of which US$210 biion aone was attributabe to the devastating earthquake in Japan, incuding the subsequent tsunami. The Japanese catastrophe resuted in insured osses of approximatey US$40 biion. Insured osses wordwide amounted to some US$119 biion (previous year: US$42 biion). Other earthquakes, ike the one in New Zeaand, were the reason why unusuay geophysica events accounted for amost twothirds of overa economic osses and around haf of insured osses. In addition, with an insured oss of approximatey US$10 biion, the word s most severe oss to date due to fooding occurred in Thaiand during the year under review. It resuted in numerous indirect business interruption insurance caims, some of them by businesses ocated far from the fooded area. Goba suppy chains for manufacturing industry are very vunerabe, a factor that is being viewed as an increasing risk for the insurance industry. The share of goba insured osses accounted for by Asia rose to an unusuay high figure of 44% because of the arge number of natura disasters there. Despite some hurricanes in the USA, there were virtuay no major oss events in North America and Europe. Gross oss ratio before settement increased to 73.0%. The severe natura disasters in 2011 are aso refected in the oss ratios. For exampe, the gross oss ratio before settement increased from 62.6% in the previous year to 73.0% of gross premiums earned in the year under review. Simiary, tota caims expenditures incuding settement resuts increased from 66.7% to 77.1%. Even in 2005, a oss-intensive year, the oss ratios were consideraby ower, at 66.1% and incuding settement resuts 73.3% respectivey. The gross expense ratio decined to 26.8% in the year under review (previous year: 29.0%). Overa, the reinsurers combined oss-expense ratio after settement increased from 95.7% in the previous year to 103.9% in the year under review. On a net basis, the combined ratio rose to 102.7% (previous year: 97.4%).
15 II Statistica evauation for Technica provisions Gross technica provisions increased to biion. Gross technica provisions increased by 7.3 biion (5.8%) to biion. In terms of gross premiums earned, this transated into a ower provision rate of 286.0% for the business as a whoe (previous year: 294.7%). As in previous years, provisions for caims outstanding were by far the most significant singe item, accounting for 76.7 biion. These provisions increased by 10.2% ( 7.1 biion) year-on-year, taking the provision rate to 164.8% (previous year: 163.4%). These figures refect firsty the high caims expenditures dating from 2011 and secondy the ongoing settement of catastrophe osses from previous years. The premium reserve increased sighty by 3.1% in the year under review to 35.5 biion (previous year: 34.0 biion). As in the previous year, the argest share of gross technica provisions for caims outstanding was attributabe to the foowing casses of business: iabiity insurance at 25.1 biion (33.1% of reinsurers tota gross provisions for caims outstanding), motor insurance at 15.4 biion (20.3%) and fire insurance at 12.0 biion (15.6%). In the previous year, provisions for caims outstanding in the fire insurance cass had ony amounted to 6.2 biion, and it is cear that the unusuay high osses in 2011 resuted in a sharp rise in fire insurance provisions. Mixed trends in the equaisation provision. Trends in the equaisation provision (incuding simiar provisions) were very mixed in the year under review. Reinsurers had to withdraw significant amounts from the equaisation provision in some casses of business, such as transport insurance ( 21.3%). In other casses of business, on the other hand, they had to make appropriations, for exampe in genera accident insurance (81.7%). The most conspicuousy high withdrawas, however, reated to fire insurance ( 2.8 biion or 56.6%); these were presumaby attributabe to the unusuay high osses in the year under review. The high eve of withdrawas from the equaisation provision for fire insurance aso affected the overa equaisation provision. In tota, the provision decined significanty ( 9.8%) because of the withdrawas, amounting to 12.7 biion at the end of the year under review (previous year: 14.1 biion). This corresponds to 31.5% of net premiums earned (previous year: 38.9%) or 9.5% of tota gross technica provisions (previous year: 11.2%). Further detais can be found in Tabes 630 and 631 of the Tabe Section.
16 14 II Statistica evauation for Overa underwriting resut The reinsurers underwriting resut is shown in the foowing tabe: Tabe 6 Underwriting resut by cass of business Cass of business m as % of premiums earned Genera accident Liabiity Motor Aerospace/aviation Fire -4, Transport Credit and surety Aerospace/aviation iabiity Other property insurance Other indemnity insurance Property/casuaty insurance -3, Life Heath Tota insurance business, gross resut -2, Retrocession resut Net resut 1-1, Change in provision for unexpired risks Change in equaisation reserve * , Net resut * Incudes simiar provisions. Sump in gross underwriting resut. The reinsurers gross underwriting resut decined sharpy in 2011 due to the unusuay high eve of osses. Athough they generated a profit of 1.2 biion in the previous year, they posted a oss of 2.4 biion in the year under review. This corresponds to 5.2% of gross premiums earned (previous year: 2.7%) and is thus sighty higher than the gross oss most recenty suffered in 2005 ( 4.9%). At 4.6 biion, the oss in the fire insurance cass was pronounced. Due to the unusuay high caims expenditures, seven of the 35 reinsurers reported a gross underwriting oss in the year under review, compared with ony two in the previous year. The primary insurers aso reported a decine in their gross underwriting profit in 2011 from insurance business accepted, athough this was far ess pronounced due to their substantiay
17 II Statistica evauation for ower internationa exposure. Their gross profit decined from 0.5 biion in the previous year to 0.3 biion in the year under review, representing 5.2% of gross premiums earned (previous year: 12.1%). For the reinsurers, business accepted from domestic ceding insurers made a positive contribution to earnings. In 2011, this business generated a gross underwriting profit of 0.6 biion, or 5.2% of domestic premiums earned (previous year: 0.9 biion, or 7.2%). For business accepted from foreign ceding insurers, the previous year s gross underwriting profit ( 0.3 biion; 0.9% of foreign premiums earned) turned into a gross oss of 3.0 biion ( 8.6%). This significant oss is attributabe to the unusuay high osses, primariy in Asia. Retrocessionaires accounted for a disproportionatey arge share of the osses of ceding insurers. In the year under review, retrocessionaires accounted for a disproportionatey arge share of the osses of ceding insurers for the first time since For the reinsurers, this resuted in a positive baance of 0.8 biion to the detriment of the retrocessionaires, corresponding to 12.3% of the amounts attributabe to retrocessionaires (previous year: 0.7 biion; 11.0% of amounts attributabe to retrocessionaires). As a resut, the reinsurers gross underwriting oss decined to 1.6 biion (= net resut 1), equivaent to 4.1% of net premiums earned (previous year: 0.4 biion; 1.2% of net premiums earned). In the year under review, reinsurers withdrew 1.4 biion (3.4% of net premiums earned) from the equaisation provision and simiar provisions that enabe risks to be baanced over time. The provision for unexpired risks was virtuay unchanged year-on-year. The net resut 2 which incudes contributions from retrocessionaires and changes due to aocations to and withdrawas from the equaisation provision and the provision for unexpired risks decreased to 0.3 biion ( 0.6% of net premiums earned), representing a significant year-on-year decine (previous year: 0.4 biion; 1.0%). However, the high underwriting oss of 2.4 biion was significanty reduced by the contributions from retrocessionaires and the withdrawas from the equaisation provision. Tabe 641 of the Tabe Section shows the net underwriting resuts by cass of business in each case before and after the change in the equaisation provision and simiar provisions.
18 16 II Statistica evauation for Net resut The summary beow shows the breakdown of reinsurers net resuts in reation to net premiums earned: Tabe 7 Breakdown of net resut Item m as % of net premiums earned Net underwriting resut 1-1, Specia aocation to caims provision Change in equaisation provision, etc , Net underwriting resut 1a Current investment income* Current investment expenses Current net investment income* Other resut from ordinary activities 10, , , , Operating resut 6, Non-periodic resut (inc. provisions for unexpired risks) Profit for the year before tax -1, , Taxes Profit for the year after tax Profit/oss brought forward 4, Change in reserves Net resut 4, * Excudes investment return aocated from the non-technica account (2011: 1.2 biion). Investment voume up by 3.4% to biion. Further rise in investment income from affiiates and equity investments. Reinsurers investment voume (incuding deposits retained) increased by approximatey 3.5% to biion (previous year: biion). Current investment income 1 increased by 9.9% to 11.6 biion (28.7% of net premiums earned). However, the share of net premiums earned accounted for by current investment income decined sighty because of the faster 11.5% growth in net premiums earned due to the increased retentions. As a proportion of the average investment portfoio (incuding deposits retained), the current yied increased to 4.9% (previous year: 4.6%). As in the previous years, the argest portion of current investment income was attributabe to income from affiiates and equity investments, i.e. to interest on oans and profit distributions, 1 Incudes the technica interest to be recognised in the underwriting account, but excudes gains on the disposa of investments as we as write-ups and reversas of the specia tax-aowabe reserves.
19 II Statistica evauation for Net return was 3.7%. accounting for 61.0% (previous year: 58.4%). This type of income payed such a major roe mainy because some reinsurers aso exercise a hoding company function in addition to their reinsurance activities. The further increase in this income to approximatey 0.9 biion aso refects the growing capita strength of the affiiates, despite an adverse capita market environment and high eves of caims expenditures in some cases. Another 9.2% of current investment income was attributabe to interest received on deposits retained. Income from bearer bonds and other fixed-income securities, accounting for 15.9%, and from shares, investment units and other variabe-rate securities (7.5%), was aso significant. However, the eve of this investment income ony changed marginay. Current investment expense, i.e. depreciation/ amortisation and administrative expenses, increased significanty by 21.5% to 2.1 biion (previous year: 1.8 biion). This is due primariy to higher administrative expenses. Overa, reinsurers generated current net investment income 2 of 9.5 biion (23.4% of net premiums earned) in 2011, corresponding to a year-on-year increase of 7.6%. The current return in reation to the average investment portfoio, incuding deposits retained, was 4.0% (previous year: 3.8%). The reinsurers investment resut amounted to 8.7 biion (previous year: 9.2 biion). This figure incudes both other investment income, such as disposa gains, write-ups and income from the reversa of the specia tax-aowabe reserves amounting to 3.4 biion (previous year: 2.7 biion), as we as other expenses such as disposa osses, write-downs and oss absorption amounting to 4.2 biion (previous year: 2.3 biion). The decine in the investment resut is primariy attributabe to higher disposa osses and higher write-downs, which increased respectivey by more than twofod and by amost two-thirds year-on-year. This aso ceary refects the worsening government debt crisis in the periphera eurozone countries in the year under review. In consequence, the net return measured as a proportion of the average portfoio of investments, incuding deposits retained decined sighty to 3.7% (previous year: 4.0%). Tabe 610 of the Tabe Section provides a summary of the performance of each investment type. Reduced negative baance of exchange rate gains and osses. The other resut from ordinary activities in the genera section of the profit and oss account improved sighty from 1.6 biion in the previous year to 1.5 biion ( 3.7% of net premiums earned) in the year under review. The baance of exchange rate gains and osses contained in this figure amounted to 0.1 biion (previous year: 0.7 biion). Overa, the ower oss is due to a stronger increase in other income compared with other expenses. The operating resut 3 increased sighty year-on-year to 6.5 biion (16.1% of net premiums earned; previous year: Current investment income ess current investment expenses incuding technica interest. 3 Tota of current net investment income, other resut from ordinary activities and net underwriting resut 1a (after specia aocation to provisions for caims outstanding, after equaisation provisions, but before provisions for unexpired risks).
20 18 II Statistica evauation for 2011 biion; 17.4%). This improvement resuted in particuar from higher current investment income, which more than offset both the net underwriting oss attributabe to the unusuay high caims expenditures and the sighty reduced oss from other ordinary activities. Profit for the year before tax of 5.4 biion. Net retained profits after aocations to reserves and profits brought forward amounted to 4.6 biion. With a oss of 1.1 biion ( 2.7% of net premiums earned), the non-periodic resut 4 deteriorated significanty (previous year: 0.4 biion; 1.0% of net premiums earned). This was attributabe primariy to the significanty ower other investment resut. Together with the operating resut, this ed to a significant decrease in profit for the year before tax to 5.4 biion (13.3% of net premiums earned; previous year: 6.6 biion; 18.3% of net premiums earned) the worst profit for the year since The profit for the year after tax amounted to 4.7 biion (previous year: 5.6 biion), corresponding to 11.6% of net premiums earned. Utimatey, after aocations to reserves of 0.3 biion (0.8% of net premiums earned) and profits brought forward of 0.2 biion, net retained profits for a reinsurers decreased sighty yearon-year to 4.6 biion, or 11.4% of net premiums earned (previous year: 4.8 biion; 13.4% of net premiums earned). The 2011 net resut is remarkabe in ight of the unusuay high caims expenditures and the difficut capita market environment. Of a reinsurers examined, ony two undertakings reported a net oss for the year under review (previous year: four) and four reported net accumuated osses (previous year: five). 6 Fair vaues of investments Vauation reserves amounted to 35.6 biion as at 31 December Under section 54 of the Reguation on Insurance Accounting (Verordnung über die Rechnungsegung von Versicherungsunternehmen RechVersV), insurers are required to discose in the notes to the annua financia statement the fair vaues of investments recognised at cost or nomina vaue. The fair vaues of investments by primary insurers are reported in Tabes 14 to 18 of the narrative section of the BaFin statistics Primary insurance undertakings and pension funds. The figures for reinsurers are now aso avaiabe for that financia year. The picture for reinsurers is shown in the foowing tabe: 4 Essentiay: change in provisions for unexpired risks, baance from the disposa of investments, write-downs and write-ups of investments, and changes in specia taxaowabe reserves.