The year under review forcefully demonstrated that our business activities are consistently confronted with fresh challenges. The influencing factors were more varied than ever: not only a series of economic changes but also numerous reforms in the German and international legal environment left their mark on the insurance industry.

In July of the year under review the European Commission presented proposals for fundamental reform of insurance supervisory law in Europe in the form of the Draft Solvency II Framework.

The law amending the Insurance Supervision Act that was adopted by the German Federal Parliament in November 2007 – it entered into force on 1 January 2008 – is intended to strengthen the German insurance industry in the competitive European environment. Key points of this reform are new provisions relating to enterprise risk management. The rules place more exacting requirements, inter alia, on decision-making processes at companies. In another step, reform of the Insurance Contract Act was approved in the year under review that is intended to further strengthen the rights of policyholders.

Finally, November 2007 saw the entry into force of a new Environmental Damage Act which introduced civil liability for environmental damage and harm caused to biodiversity. The German insurance industry responded by launching a new type of liability insurance for environmental damage on the market.