Our glossary explains technical terms from the areas finance and reinsurance. We hope it facilitates the understanding of our texts, publications and annual reports. If you have comments or suggestions, please use our feedback form!

• Capital asset pricing model (CAPM)
  the CAPM is used to explain the materialisation of prices/returns on the capital market based on investor expectations regarding the future probability distribution of returns. Under this method, the opportunity cost rate for the shareholders’ equity consists of three components – a risk-averse interest rate, a market-specific risk loading and an enterprise-specific risk assessment, the beta coefficient. The cost of shareholders’ equity is therefore defined as follows: risk-averse interest rate + beta * enterprise-specific risk assessment.
• Cash flow statement
  statement on the origin and utilisation of cash and cash equivalents during the accounting period. It shows the changes in liquid funds separated into cash flows from operating, investing and financing activities.
• Cedant
  direct insurer or reinsurer which passes on (also: cedes) shares of its insured or reinsured risks to a reinsurer in exchange for premium.
• Cession
  transfer of a risk from the direct insurer to the reinsurer.
• Claims and claims expenses
  sum total of paid claims and provisions for loss events that occurred in the business year; this item also includes the result of the run-off of the provisions for loss events from previous years, in each case after the deduction of own reinsurance cessions.
• Coinsurance Funds Withheld (CFW) Treaty
  type of coinsurance contract where the ceding company retains a portion of the original premium at least equal to the ceded reserves. Similar to a Modco contract the interest payment to the reinsurer reflects the investment return on an underlying asset portfolio.
• Combined ratio
  sum of the loss ratio and expense ratio.
• Confidence (also: probability) level
  the confidence level defines the probability with which the defined amount of risk will not be exceeded.
• Contribution margin accounting level 5 (DB 5)
  this level of contribution margin accounting constitutes the clear profit after earning the discounted claims expenditure plus all external and internal costs including the cost of capital.
• Corporate Governance
  serves to ensure responsible management and supervision of enterprises and is intended to foster the trust of investors, clients, employees and the general public in companies.
• CDP
  The Carbon Disclosure Project is a non-profit organisation that encourages the voluntary disclosure of environmental data by companies for investors through the use of a standardised questionnaire.