In the context of our business operations we purposely enter into a broad range of risks. As a leading player in the reinsurance industry, our commercial success is crucially dependent on the correct assessment of present and Emerging risks. This process of evaluating risks is growing in complexity due to the constant monitoring and analysis of new and emerging risks, trends and future-related factors; sustainability aspects are also playing a greater role here. In some instances these have direct strategic and operational relevance to our reinsurance products and the management of our investments. We can gain insights from the risks and opportunities for our own risk management and also use them as a basis for product and service innovations. In this way, we constantly adjust to societal changes and the needs of our clients. Not only does this enhance our competitiveness, it also boosts trust among our customers and business partners.

As a general principle, every identified risk that is considered to be material is evaluated quantitatively. Only risk types for which quantitative risk measurement is currently not possible or scarcely practicable are qualitatively evaluated, for example by means of expert assessments. Such risks include emerging and strategic risks as well as reputational risks.

In property and casualty reinsurance we make a fundamental distinction for risk assessment purposes between risks that result from business operations of past years (reserve risk) and those stemming from activities in the current or future years (price / premium risk). At the present time our most significant risks are the default and spread risks within the (capital) market risks and the reserving and catastrophe risks within the Underwriting risks of property and casualty reinsurance. Licensed scientific simulation models, refined by drawing on the experience of our own specialist departments, are used to assess our material catastrophe risks from natural hazards (especially earthquake, windstorm and flood). Furthermore, we establish the risk to our Portfolio from various scenarios in the form of probability distributions. The monitoring of the risks resulting from natural hazards is rounded out by realistic extreme scenarios.

Biometric risks, i.e. all risks directly connected with the life of an insured person, are among the material factors that need to be assessed in life and health reinsurance. The risks associated with assessment include, for example, the miscalculation of mortality, life expectancy, morbidity and occupational disability. In this respect, mortality risks have varying implications for our life and health reinsurance business. While annuity Portfolios are, as a general principle, adversely impacted by improvements in mortality, the effects for death benefit portfolios are inversely positive. In addition, we must evaluate the lapse risk because the cash flows resulting from reinsurance treaties are in part dependent on lapse rates among policyholders. In addition, consideration must be given to catastrophe risks in life and health reinsurance as well, especially events involving a high number of fatalities.

Social and environmental risks are considered primarily in the context of our reputational risks under "Other risks" in both main lines of business.

Along with our internal research activities, we also cultivate an ongoing dialogue with various globally operating risk managers, universities, reinsurers, clients, political actors and industry associations and we attend a number of conferences. Furthermore, our goal is to offer individual customer care and to assist our clients successfully not only through pure risk transfer but also with our range of services. Thus, for example, we offer our customers services and system-based applications to identify and successfully manage potential risks. All in all, the focus of all our activities – without losing sight of our corporate objectives – is on the needs of our customers. We aspire to be a long-term and expert partner in every situation.

Our activities in relation to risk expertise and risk assessment can be broken down into the subject areas of digitalisation, climate change, demographic change, financial inclusion, innovations and dialogue, which are displayed in the following chart.