Summary of major accounting policies
Adjustments in accordance with IAS 8
In the year under review further steps were taken to bring about a definition of segments according to areas of responsibility on the Board of Management of the Group holding company Talanx AG. The following companies were reallocated to a different segment: the life insurance business of HDI Assicurazioni S.p.A. is now reported in the Property/Casualty Primary Insurance segment (previously in: Life Primary Insurance). The personal accident insurers in the Bancassurance Division – HDI Magyar Posta Biztosító Részvénytársaság, CiV Versicherung AG, PB Versicherung AG and Neue Leben Unfallversicherung AG – were recognized in the Life Primary Insurance segment (previously in: Property/Casualty Primary Insurance). The newly added companies are recognized in the relevant segments after intrasegment consolidation (in this context the relations of the reallocated companies within the respective new segments were eliminated). Relations with companies from the segment to which the companies previous belonged are now eliminated in the "Consolidation" column. The new segment affiliations reflect the allocation to the various areas of Board responsibility at Talanx AG. These measures did not give rise to any changes in the consolidated balance sheet and statement of income of the Talanx Group. They are evident only in the segmental balance sheet and segmental statement of income, since they merely involve shifts between Group segments and the "Consolidation" column. The figures for the previous year were adjusted accordingly.
In the 2007 financial year the previous year’s figures with respect to the following circumstances were adjusted retrospectively and directly in equity in accordance with the requirements of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors":
a) Effective 28 December 2007 guarantees were transferred from Hannover Rückversicherung AG to Hannover Re-insurance (Ireland) Ltd. These guarantees given by Talanx AG relate to a group of reinsurance contracts and provide for cash compensation from the guarantor in the event that the technical balances plus interest paid on certain measurement dates are not covered by the present value of future profits from these contracts. The contracts in question are classified as financial instruments with the character of loans and receivables in accordance with IAS 39 and measured at amortized cost. In the Life Primary Insurance and Life/Health Reinsurance segments this led to a reclassification of deferred acquisition costs under a loan extended to affiliated companies, which in accordance with IAS 14.16 (b) is not recognized in the segment. The corresponding interest income, which is to be reclassified from the technical result, is similarly not shown. In the partner segment of Life Primary Insurance the corresponding amounts, which are to be reclassified from the retired deferred acquisition costs, are also eliminated. The interest expense associated with the loan is not recognized. The figures for the previous year, which changed to the extent of the amounts no longer shown in the technical account, have been adjusted. Appropriate adjustments have also been made in the statement of income.
b) Goodwill of EUR 11 million was derecognized with implications for previous years. This amount derives from the sale of interests in E+S Rückversicherung AG by HDI V.a.G. to Hannover Rückversicherung AG in 1995. In the subsequent year Hannover Rückversicherung AG was included in the predecessor company of Talanx AG. The consolidated financial statements of the subsequent Talanx AG were not drawn up as subgroup accounts (accounts of entities under common control), and to this extent the goodwill arising out of the transaction was not eliminated in the Talanx Group. Derecognition of the remaining amount brings uniformity to the principles used in preparing the accounts of all entities under the common control of the parent company HDI V.a.G.