Sustainability Report 2017

Our corporate strategy encompasses ten strategic principles that apply to all business units and help to ensure that we can realise our vision for the strategy cycle of 2015 to 2017, namely "Long-term success in a competitive business".

1. We have ambitious profit and growth targets
- Generate an IFRS return on equity of at least 900 basis points above the risk-free interest rate
- Achieve profitability targets and generate a profit clearly in excess of the cost of capital
- Grow the premium volume (by more than the market average)
- Outperform the Global Reinsurance Index (GloRe) over a three-year period
- Consistently pay an attractive dividend
2. We are a preferred business partner
- Offer an attractive value proposition that makes us the preferred business partner for our clients
- Foster customer relationships to both parties' mutual benefit irrespective of the size of the account
3. We aim for successful employees
- Offer attractive workplaces
- Foster the qualifications, experience and commitment of our staff
4. We strive for an optimal balance between the stability and yield of our investments
- Achieve the target return – risk-free interest rate plus cost of capital
5. We manage risks actively
- Ensure protection of capital through quantitative risk management
- Ensure protection of capital through qualitative risk management
6. We maintain an adequate level of capitalisation
- Ensure that requirements for equity resources (economic capital model, solvency regulations, etc.) are met
- Optimise the overall cost of capital
7. We ensure low costs through an efficient organisational set-up
- Ensure a lower expense ratio than our competitors
8. We use information technology to achieve a competitive advantage
- Information and communication systems assure optimal support for business processes in light of cost/benefit considerations
9. We are committed to sustainability, integrity and compliance
- Ensure conformity with all legal requirements
- Encourage sustainable actions with respect to all stakeholders
- Support considered and pragmatic principles of corporate governance and recognise their central role in guiding our activities
10. We strive for Performance Excellence and continuous improvement
- Ensure the rigorous derivation of strategic objectives across all areas of the company

We implement the goals of our corporate strategy in accordance with our holistic management system Performance Excellence 2.0. We use key indicators in our target matrix to map the status of goal accomplishment. Details are provided under "Value-based management" in the present Sustainability Report, in the respective sections of the current Annual Report and in our Strategy Brochure.

We subject our corporate strategy to regular scrutiny. This strategy review, which is carried out on a rotating basis, was conducted in 2017 in accordance with our established practice. The updated corporate strategy for the period 2018 – 2020 was already unveiled to the public in October 2017 and more extensive information has since been published on our website.

We have no doubts as to the favourable outlook for the worldwide reinsurance market going forward and our goal throughout the 2018 – 2020 strategy cycle is once again to further expand our position as one of the leading, most profitable globally operating reinsurers on a sustainable basis. We intend to achieve this by creating value through reinsurance for our clients, our shareholders and our employees. With this in mind, we have formulated the new strategy to reflect our vision of "Creating value through reinsurance".

The 2018 – 2020 strategy cycle is shaped by a number of factors, including the advancing digital transformation. The challenges posed by digitalisation and automation quite rightly feature at the very top of our industry's agenda, since technological developments will lead to lasting changes in workflows and processes in the future. This aspect has therefore become an integral component of our corporate strategy: we support our business activities with efficient IT application and we leverage the opportunities offered by digitalisation and automation. Furthermore, the Executive Board has for the first time adopted a stand-alone digitalisation strategy that focuses in detail on the associated opportunities and risks – both with an eye to our business processes and as far as our work as a reinsurer is concerned.

Sustainability Report 2017

Group strategy

1. We have ambitious profit and growth targets

2. We are a preferred business partner

3. We aim for successful employees

4. We strive for an optimal balance between the stability and yield of our investments

5. We manage risks actively

6. We maintain an adequate level of capitalisation

7. We ensure low costs through an efficient organisational set-up

8. We use information technology to achieve a competitive advantage

9. We are committed to sustainability, integrity and compliance

10. We strive for Performance Excellence and continuous improvement

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