|in EUR million||2017||2016||2015||2014||2013|
|Investments under own management||40,057||41,793||39,347||36,228||31,875|
Hannover Re's investment policy continues to be guided by the following core principles:
With these goals in mind we engage in active risk management based on balanced risk / return analyses. To this end we adhere to centrally implemented investment guidelines and incorporate insights gained from dynamic financial analysis. They form the basis for investment ranges which are specified in light of the prevailing state of the market and the requirements on the liabilities side and within which operational management of the portfolio takes place. These measures are intended to safeguard the generation of an appropriate level of return. In so doing, we pay strict attention to compliance with our clearly defined risk appetite, which is reflected in the risk capital allocated to the investments and constitutes the foundation for the asset allocation of the entire Hannover Re Group and the individual portfolios. Our ability to meet our payment obligations at all times is also ensured in this way. Within the scope of our asset / liability management (ALM) the allocation of investments by currencies and maturities is determined by the technical liabilities. The modified duration of our bond portfolio is geared largely to the technical liabilities.
By adjusting the maturity pattern of our fixed-income securities to the expected payment patterns of our liabilities we reduce the economic exposure to the interest rate risk. In the current reporting period this gave rise to a broadly neutral modified duration of our bond portfolio, which stood at 4.8 (previous year: 5.0) as at 31 December 2017. Through active and regular management of the currency spread in our fixed-income portfolio we bring about extensive matching of currencies on the assets and liabilities sides of the balance sheet, as a consequence of which fluctuations in exchange rates have only a limited effect on our result.
As at year-end 2017 we held 30.1% (30.2%) of our investments in euro, 45.5% (48.3%) in US dollars, 8.2% (6.9%) in pound sterling and 5.9% (5.1%) in Australian dollars.