Obligation Gothaer Allgemeine Versicherung AG 5.527% ( XS0269270566 ) en EUR

Gothaer Allgemeine Versicherung AG

100 % ⇌

Allemagne

XS0269270566 ( en EUR )

5.527% par an ( paiement annuel )

28/09/2026

Prospectus brochure de l'obligation Gothaer Allgemeine Versicherung AG XS0269270566 en EUR 5.527%, échéance 28/09/2026

50 000 EUR

250 000 000 EUR

29/09/2024 ( Dans 134 jours )

L'Obligation émise par Gothaer Allgemeine Versicherung AG ( Allemagne ) , en EUR, avec le code ISIN XS0269270566, paye un coupon de 5.527% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 28/09/2026

Prospectus dated 27 September 2006
Gothaer Allgemeine Versicherung AG
(a stock corporation incorporated under the laws of the Federal Republic of Germany)
250,000,000 Subordinated Fixed to Floating Rate Bonds due 2026
Issue Price: 100.00 per cent.
Gothaer Allgemeine Versicherung AG, Cologne (the "Issuer") will issue 250,000,000 principal amount of subordinated fixed
to floating rate bonds due 29 September 2026 (the "Bonds") on 29 September 2006 (the "Issue Date") at an issue price of 100.00 per
cent. of the principal amount of such Bonds. The Bonds will be issued in denominations of 50,000 each.
For the period from and including 29 September 2006 to but excluding 29 September 2016 (the "First Call Date") the Bonds
bear interest on their aggregate principal amount at the rate of 5.527 per cent. per annum payable annually in arrear on 29 September
in each year (each a "Fixed Interest Payment Date") commencing on 29 September 2007. In the period from and including the First
Call Date to but excluding the date of redemption, the Bonds shall bear interest on their aggregate principal amount at the Euro inter-
bank offered rate for three months deposits plus 2.50 per cent. The interest will be payable quarterly in arrear on 29 September,
29 December, 29 March and 29 June in each year (each a "Floating Interest Payment Date").
Under certain circumstances, the Issuer may elect to defer payment of interest. The Issuer may pay such deferred interest at any
time and must pay such deferred interest under certain circumstances as described in the "Terms and Conditions of the Bonds".
The Bonds shall, to the extent not previously redeemed in whole or in part, be redeemed at their principal amount on 29 Sep-
tember 2026 . The holders of the Bonds (the "Holders") shall have no right to call for redemption of the Bonds.
The Issuer may redeem the Bonds in whole but not in part on the First Call Date or on any Floating Interest Payment Date
thereafter at their principal amount together with any accrued interest and all outstanding Arrears of Interest (as defined in the
"Terms and Conditions of the Bonds"). The Issuer may also redeem the Bonds in whole but not in part following a Gross-up Event
at their principal amount and following a Tax Event or a Regulatory Event at the greater of the principal amount and the Make-
Whole Amount (as defined in "Terms and Conditions of the Bonds"), in each case together with any accrued interest and all out-
standing Arrears of Interest.
The Bonds constitute unsecured and subordinated obligations of the Issuer ranking pari passu among themselves and at least
pari passu with all other unsecured and subordinated obligations of the Issuer outstanding on the date of issue of the Bonds. In the
event of the liquidation, dissolution, insolvency, composition or other proceedings for the avoidance of insolvency of, or against, the
Issuer, the obligations of the Issuer under the Bonds will be subordinated to the claims of all unsubordinated creditors of the Issuer,
so that in any such event no amounts shall be payable in respect of the Bonds until the claims of the unsubordinated creditors of the
Issuer shall have first been satisfied in full. No security of whatever kind is, or shall at any time be, provided by the Issuer or any
other person securing rights of the Holders under the Bonds.
Application has been made to the Commission de Surveillance du Secteur Financier, Luxemburg ("CSSF"), as competent
authority under Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 (the "Prospectus Direc-
tive"), for this Prospectus to be approved. Application has been made to the Luxembourg Stock Exchange for the Bonds to be listed
on the market of the Luxembourg Stock Exchange appearing on the list of regulated markets issued by the European Commission
(Regulated Market "Bourse de Luxembourg"). The Bonds will be traded on the Luxembourg Stock Exchange. The Issuer may request
CSSF to provide competent authorities in additional host Member States within the European Economic Area with a certificate of
approval attesting that the Prospectus has been drawn up in accordance with the Loi du 10 juillet 2005 relative aux prospectus pour
valeurs mobilières which implements the Prospectus Directive into Luxembourg law.
The Bonds will be issued in bearer form and will be represented by a global bearer bond (the "Global Bond") without coupons
which will be deposited with a depositary common to Clearstream Banking, société anonyme, Luxembourg and Euroclear S. A./N. V.
(together the "Clearing System"). No definitive bonds or coupons will be issued.
The Issuer expects that upon issuance the Bonds will be assigned a rating of BBB by Standard & Poor's (a division of the
McGraw-Hill Companies, Inc.) ("S&P") and a rating of BBB + by Fitch Ratings Ltd. ("Fitch"). A rating is not a recommendation
to buy, sell, or hold securities, and may be subject to revision, suspension or withdrawal at any time by the relevant rating agency.
THE BONDS HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U. S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND THE BONDS ARE SUBJECT TO U. S. TAX LAW REQUIREMENTS. SUBJECT TO
CERTAIN EXCEPTIONS, THE BONDS MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE UNITED STATES OR TO
U. S. PERSONS.
INVESTMENT IN THESE BONDS INVOLVES CERTAIN RISKS. PLEASE SEE THE SECTION "RISK FACTORS"
BEGINNING ON PAGE 5 FOR A DESCRIPTION OF THESE RISKS.
This Prospectus constitutes a prospectus pursuant to, and is in compliance with the requirement of, the Prospectus Directive. It
has been filed with CSSF, has been approved by said authority and will be published in electronic form on the website of the Luxem-
bourg Stock Exchange (www.bourse.lu).
Lead Manager and Sole Structuring Advisor
Morgan Stanley
Senior Co-Lead Managers
DZ BANK AG
HVB Corporates & Markets

RESPONSIBILITY STATEMENT
The Issuer with its registered office in Cologne, Germany accepts responsibility for the information con-
tained in this prospectus (the "Prospectus"). To the best of the knowledge and belief of the Issuer, the informa-
tion contained in this Prospectus is in accordance with the relevant facts and does not omit anything likely to
affect the import of such information.
NOTICE
The Issuer further confirms that (i) this Prospectus contains all information with respect to the Issuer and its
subsidiaries taken as a whole (the "Gothaer Allgemeine Group") and to the Bonds which is material in the con-
text of the issue, offering and listing of the Bonds, including all information which, according to the particular
nature of the Issuer and of the Bonds is necessary to enable investors and their investment advisers to make an
informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Issuer
and the Gothaer Allgemeine Group and of the rights attached to the Bonds; (ii) the statements contained in this
Prospectus relating to the Issuer, the Gothaer Allgemeine Group and the Bonds are in every material respect true
and accurate and not misleading; (iii) any opinions and intentions expressed by the Issuer herein are honestly
held and based on reasonable assumptions, (iv) there are no other facts in relation to the Issuer, the Gothaer
Allgemeine Group or the Bonds the omission of which would, in the context of the issue and offering of the
Bonds, make any statement in the Prospectus misleading in any material respect and (v) reasonable enquiries
have been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and state-
ments.
No person is authorised to give any information or to make any representations other than those contained
in this Prospectus and, if given or made, such information or representations must not be relied upon as having
been authorised by or on behalf of the Issuer or Morgan Stanley & Co. International Limited ("Morgan Stanley"
or the "Lead Manager") or Bayerische Hypo- und Vereinsbank AG, or DZ BANK AG Deutsche Zentral-Genos-
senschaftsbank, Frankfurt am Main (together with the Lead Manager, the "Managers"). Neither the delivery of
this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Issuer or any of their affiliates since the date of this Prospectus, or that the
information herein is correct at any time since the date of this Prospectus.
Each investor contemplating purchasing any Bonds should make its own independent investigation of the
financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. This Prospectus does
not constitute an offer of Bonds or an invitation by or on behalf of the Issuer or the Managers to purchase any
Bonds. Neither this Prospectus nor any other information supplied in connection with the Bonds should be con-
sidered as a recommendation by the Issuer or the Managers to a recipient hereof and thereof that such recipient
should purchase any Bonds.
This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by
anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is
unlawful to make such offer or solicitation.
The offer, sale and delivery of the Bonds and the distribution of this Prospectus in certain jurisdictions is
restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and the Manag-
ers to inform themselves about and to observe any such restrictions. In particular, the Bonds have not been and
will not be registered under the Securities Act and the Bonds are subject to U. S. tax law requirements. Subject to
certain limited exceptions, the Bonds may not be offered, sold or delivered within the United States or to
U. S. persons.
IN CONNECTION WITH THE ISSUE OF THE BONDS, MORGAN STANLEY AS STABILISING
MANAGER (OR PERSONS ACTING ON ITS BEHALF) MAY OVER-ALLOT BONDS (PROVIDED THAT
THE AGGREGATE PRINCIPAL AMOUNT OF THE BONDS ALLOTTED DOES NOT EXCEED 105 % OF
THE AGGREGATE PRINCIPAL AMOUNT OF THE BONDS (OR SUCH OTHER PERCENTAGE AS MAY
BE APPLICABLE TO ANY SUCH ACTIONS IN THE JURISDICTION WHERE SUCH ACTIONS ARE TO
BE EFFECTED) OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE
OF THE BONDS AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOW-
EVER, THERE IS NO ASSURANCE THAT MORGAN STANLEY AS STABILISING MANAGER (OR PER-
2

SONS ACTING ON ITS BEHALF) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION
ACTION MAY BEGIN AT ANY TIME AFTER THE ADEQUATE PUBLIC DISCLOSURE OF THE FINAL
TERMS OF THE OFFER OF THE BONDS AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT
MUST END NO LATER THAN THE EARLIER OF 30 CALENDAR DAYS AFTER THE DATE OF THE
RECEIPT OF THE PROCEEDS OF THE ISSUE BY THE ISSUER OR 60 CALENDAR DAYS AFTER THE
DATE OF THE ALLOTMENT OF THE BONDS OR, AS THE CASE MAY BE, SUCH OTHER DATE(S) AS
MAY BE APPLICABLE TO ANY SUCH ACTION IN THE JURISDICTION WHERE SUCH ACTIONS ARE
TO BE EFFECTED. SUCH STABILISING SHALL BE IN COMPLIANCE WITH ALL LAWS, REGULA-
TIONS AND RULES OF ANY RELEVANT JURISDICTION.
3

TABLE OF CONTENTS
RESPONSIBILITY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
TERMS AND CONDITIONS OF THE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
DESCRIPTION OF THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
SUBSCRIPTION AND SALE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-1
Annual Report 2004 (Abridged Version) of Gothaer Allgemeine Versicherung AG
(including Auditor's Report). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-2
Annual Report 2005 (Abridged Version) of Gothaer Allgemeine Versicherung AG
(including Auditor's Report). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-33
4

RISK FACTORS
The following is a non-exhaustive description of certain risk factors with respect to the Bonds and the finan-
cial situation of the Issuer which prospective investors should consider before deciding to purchase the Bonds.
The order in which the following risk factors are presented is not an indication of the likelihood of their occur-
ance or of the extent of their commercial consequences. Prospective investors should consider all of the informa-
tion provided in this Prospectus and consult with their own professional advisers if they consider it necessary.
Words and expressions defined in "Terms and Conditions of the Bonds" below shall have the same mean-
ings in this section.
Risk Factors in respect of the Bonds
Bonds may be called for redemption prior to their scheduled maturity
The Bonds may be redeemed at the option of the Issuer (in whole but not in part) at their principal amount
on 29 September 2016 or on any Floating Interest Payment Date thereafter. The Issuer may also redeem the
Bonds in whole but not in part following a Gross-up Event, a Tax Event or a Regulatory Event. There can be no
assurance that the Holders will be able to re-invest the proceeds from early redemption of the Bonds at a compa-
rable yield. The Holders have no right to call for redemption of the Bonds.
Payments of Interest under the Bonds may be deferred at the election of the Issuer
The Issuer has the option to defer a payment of interest if (A) no dividend, other distribution or payment
(including for the purposes of a redemption or repurchase of shares) was resolved on in respect of any class of
shares of the Issuer at the annual general meeting (Jahreshauptversammlung) or any subsequent general meeting
of the Issuer immediately preceding that Interest Payment Date; and (B) no such dividend, special dividend or
other distribution of payment (including for the purposes of a redemption or repurchase of any Junior Securities
or Parity Securities) has been resolved on, paid or made in respect of any (i) Junior Securities or (ii) Parity Secu-
rities since that annual general meeting (Jahreshauptversammlung) of the Issuer; (C) a profit and loss transfer
agreement between the Issuer as the party obliged to transfer profits and Gothaer Finanzholding AG, Berlin or
another entity exists, and since the immediately preceding Interest Payment Date the Issuer has neither trans-
ferred any profits nor made any allocations to voluntary reserves pursuant to the terms of such profit and loss
transfer agreement; and (D) the Issuer has not repurchased or otherwise acquired, or caused another affiliate to
repurchase or otherwise acquire, any Parity Securities, Junior Securities or shares of any class of shares for any
consideration (except by conversion into or exchange for ordinary shares of the Issuer) since the immediately
preceding annual general meeting (Jahreshauptversammlung) of the Issuer. The Issuer shall not have any obliga-
tion to pay interest on any payment so deferred.
Claims under the Bonds are subordinated
The payment obligations of the Issuer under or in connection with the Bonds constitute unsecured and dated
subordinated obligations of the Issuer. In the event of the liquidation, dissolution, insolvency, composition or
other proceedings for the avoidance of insolvency of, or against, the Issuer, the obligations of the Issuer under the
Bonds will be subordinated to the claims of all unsubordinated creditors of the Issuer, so that in any such event
no amounts shall be payable in respect of the Bonds until the claims of the unsubordinated creditors of the Issuer
shall have first been satisfied in full.
Unsubordinated liabilities of the Issuer may also arise from events that are not reflected on the balance sheet
of the Issuer, as the case may be, including, without limitation, the issuance of guarantees or the incurrence of
other contingent liabilities on an unsubordinated basis. Claims made under such guarantees or such other contin-
gent liabilities will become unsubordinated liabilities of the Issuer, as the case may be, that in a dissolution or
insolvency proceeding of the Issuer, are to be paid in full before the obligations under the Bonds may be satis-
fied.
There is no limitation on the Issuer to incur additional indebtedness ranking senior to or pari passu with
the Bonds
The Issuer has not entered into any restrictive covenants in connection with the issuance of the Bonds
regarding its ability to incur additional indebtedness ranking pari passu with or senior to the obligations under or
5

in connection with the Bonds. Claims of the Holders for principal and interest under the Bonds will rank junior
to the claims of the holders of such senior bonds. Incurring any such additional indebtedness may increase the
likelihood of a deferral of interest payments under the Bonds and/or may reduce the amount recoverable by the
Holders in the event of insolvency or liquidation of the Issuer.
No express events of default
The Holders should be aware that the Terms and Conditions of the Bonds do not contain any express events
of default.
No prior market for the Bonds
Application has been made to the Luxembourg Stock Exchange for the Bonds to be admitted to the Official
List and trading on its regulated market. However, there can be no assurance that a liquid secondary market for
the Bonds will develop or, if it develops, that it will continue. In an illiquid market, an investor might not be able
to sell his or her Bonds at any time at fair market prices. The possibility to sell the Bonds might be restricted
additionally by country-specific reasons.
Fixed rate Bonds are exposed to specific market risks
A holder of a Bond with a fixed interest rate is exposed to the risk that the price of such Bond falls as a result
of changes in the market interest rate. While the nominal interest rate of the Bonds is fixed during the Fixed Inter-
est Period of the Bonds, the current interest rate on the capital market (market interest rate) typically changes on
a daily basis. As the market interest rate changes, the price of the Bonds changes in the opposite direction. If the
market interest rate increases, the price of the Bonds typically falls, until the yield of the Bonds is approximately
equal to the market interest rate. If the market interest rate falls, the price of the Bonds typically increases, until
the yield of the Bonds is approximately equal to the market interest rate. Holders should be aware that move-
ments of the market interest rate can adversely affect the price of the Bonds and can lead to losses for the Holders
if they sell the Bonds.
Risk Factors in respect of the Issuer
Fluctuations in the premium income levels could materially adversely affect the Issuer's financial position
or results.
The Issuer's results of operations are affected by a variety of market conditions, including economic cycles
and insurance industry cycles, in particular, with respect to the various segments of property and casualty insur-
ance markets in which the Issuer operates. Market conditions in the property and casualty insurance markets are
generally characterised by periods of price competition, fluctuations in underwriting results and the occurrence
of unpredictable weather-related or other catastrophe-related losses. The premium income might also be adversely
affected by the fact that both private and corporate clients are increasingly sensitive to premium levels and dem-
onstrate a high willingness to change their insurers. In particular, premiums in the industrial motor insurance
segment could decrease due to severe competition. A decrease of the premium income could materially adversely
affect the Issuer's financial position or results of operations.
Generally, the Issuer calculates the premiums on the basis of certain assumptions in accordance with market
practice and, amongst others, its historic claims experience. Nevertheless, these assumptions made in connection
with the calculation of the premiums could prove to be incorrect in comparison to the actual future developments
and, therefore, may lead to insufficient premium income in relation to the underwritten risks, which could mate-
rially adversely affect the Issuer's financial position or result of operations. In this regard, it has to be taken into
account, that the adjustment of costs is not as flexible as the adjustment of the premiums.
Loss reserves and calculation of premiums for the property and casualty insurance policies of the Issuer are
based on estimates as to future claim liabilities. Adverse developments relating to insurance claims could neces-
sitate further contributions to the loss reserves and materially adversely affect the Issuer's financial position or
its results of operations.
In accordance with industry practice and accounting and regulatory requirements, the Issuer establishes
reserves for losses and loss adjustment expenses related to the various segments of its property and casualty
insurance business. Reserves are based on estimates of future payments that will be made in respect of claims,
6

including expenses relating to such claims. Such estimates are made both on a case-by-case basis, based on the
facts and circumstances available at the time the reserves are established, as well as in respect of losses that have
been incurred but not reported to the Issuer.
Reserves are subject to change due to a number of variables which affect the ultimate cost of claims, such as
changes in the legal environment, results of litigation, costs of repairs and risk factors such as inflation. The Issuer's
earnings depend significantly upon the extent to which the Issuer's actual claim experience is consistent with the
assumptions it uses in setting the prices for its insurance products and establishing the loss reserves. To the extent
that the Issuer's actual claims experience is less favourable than the underlying assumptions used in establishing
such loss reserves, the Issuer may be required to increase its reserves, which may adversely affect its earnings.
Established loss reserves estimates are periodically adjusted in the ordinary course of settlement, using the
most current information available to management, and any adjustments resulting from changes in reserve esti-
mates are reflected in the current results of operations. The Issuer also conducts reviews of various lines of busi-
ness to consider the adequacy of reserve levels. In addition, the Issuer's actuarial calculations as well as the
adequacy of reserve levels are reviewed by the Issuer's auditors in connection with the annual audit of the Issu-
er's financial statements.
However, although the Issuer believes to have build-up sufficient reserves, since the establishment of loss
reserves is subject to uncertainty, there can be no assurance that ultimate losses will not materially exceed the
Issuer's loss reserves. This might occur in particular in the event of elementary losses caused by storm, hail,
flooding or earthquake that affect several lines of insurance underwritten by the Issuer or due to natural disasters
as a consequence of the climate change in the recent years as well as in consequence of terrorist activities. Insuf-
ficient loss reserves may also occur as a consequence of risk accumulations within certain geographic areas or
classes of business. The Issuer considers this particularly likely in the in the area of technical insurance of wind
power plants. An increasing frequency in major losses exceeding the loss reserves might also occur in the insur-
ance line for products recall of suppliers to the automotive industry. Insufficient loss reserves may have a mate-
rial adverse effect on the Issuer's financial position or results of operations.
The Issuer has significant counterparty risk exposure.
The Issuer is subject to a variety of counterparty risks, including in particular vis-à-vis reinsurers. The Issuer
transfers its exposure to certain risks in its property and casualty insurance business to others through reinsurance
arrangements. Under these arrangements, other insurers assume a portion of the Issuer's losses and expenses
associated with reported and unreported losses in exchange for a premium. The availability, amount and cost of
reinsurance depend on general market conditions and may vary significantly. Any decrease in the amount of the
Issuer's reinsurance will increase its risk of loss. When the Issuer obtains reinsurance, it is still liable for those
transferred risks if the reinsurer cannot meet its obligations. Therefore, the inability of the Issuer's reinsurers to
meet their financial obligations could materially affect the financial position or results of operations. Although
the Issuer conducts periodic reviews of the financial statements and reputation of its reinsurers, the reinsurers
may become financially unsound by the time they are called upon to pay amounts due.
The reinsurers' ability to meet their obligations is particularly important to the Issuer with respect to poten-
tial major losses in the motor third party liability insurance business, because a part of these policies have for-
merly been underwritten with unlimited coverage and, from April 2005 on, with a very high coverage of 100
million. A default of any reinsurer of these motor third party liability risks may materially adversely affect the
Issuer's financial position or results of operations.
Apart from reinsurers, there are also significant counterparty default risks in relation to policyholders and
insurance agents as well as in relation to counterparties of financial investments, which could adversely affect the
results of operations, if the receivables cannot be recovered. At 31 December 2005 the counterparty default risks
with respect to policyholders and insurance agents amounted to 173 million. This includes value adjustments in
the amount of 12.4 million, which reasonably account for the counterparty default risks. On average the default-
ing claims (after unsuccessful judicial dunning procedures) during the last three years came to 4.4 Million,
amounting to 3.2 of the gross premiums written.
Interest rate volatility may adversely affect Issuer' results of operations.
Changes in prevailing interest rates (including changes in the difference between the levels of prevailing
short- and long-term rates) can affect the Issuer's results.
7

Over the past several years, movements in both short- and long-term interest rates have affected the level
and timing of recognition of gains and losses on securities held in the Issuer's investment portfolios. The Issuer's
investment portfolios are mainly weighted toward Euro-denominated fixed-income investments. Accordingly,
interest rate movements in the Euro zone will significantly affect the market value of the Issuer's investment
portfolios. Fixed income securities constituted 68.4 % of the Issuer's own investments at 31 December 2005. An
increase in interest rates could substantially decrease the market value of the Issuer's fixed income portfolio, and
any unexpected change in interest rates could materially adversely affect its bond and interest rate derivative
positions.
Market risks could impair the value of the Issuer's portfolio and adversely impact its financial position and
results of operations.
The Issuer holds a significant equity portfolio, which represented approximately 11.7 % of the Issuer's own
investments at 31 December 2005. Fluctuations in equity markets affect the market value and liquidity of these
holdings. The Issuer also has real estate holdings in its investment portfolio, the value of which is likewise
exposed to changes in real estate market prices and volatility. In this context, also reinvestment and inflation risks
exist, which means that a return on capital from an investment can only be re-invested at conditions less favour-
able than the original investment.
Fluctuations in currency exchange rates
As a result of its global activities, the Issuer and its subsidiaries taken as a whole (the "Gothaer Allgemeine
Group") may be affected by fluctuations in currency exchange rates. In accordance with its principle policy
Gothaer Allgemeine Group's hedges itself fully against fluctuations in the currency exchange rates of the U. S.-
Dollar and the Pound Sterling in relation to the Euro. To the extent Gothaer Allgemeine Group does not, or is no
longer able to, hedge itself against movements in the international foreign exchange markets, fluctuations in
exchange rates could have a material adverse effect on the Gothaer Allgemeine Group's financial condition and
results of operations.
Other Investment Risks
In addition to market risks, credit risks and currency exchange risks and basic investment risks, the Issuer is
exposed to concentration and liquidity risks as well as dealer and counterparty risks. With regard to liquidity
risks, there is a risk in relation to the liquidation of hidden reserves. The declared hidden reserves are subject to
market price fluctuations. Further, the realisation is highly dependent on the liquidity of the relevant asset class.
Risks relating to asset classes
All asset classes (fixed rate investments, shares, participation financing, hedge funds, asset backed securi-
ties, collateral debt obligations, structured credit, high yield, private equity, real estate, derivatives) are exposed
to market risks, counterparty and credit risks, liquidity and currency risks and to some extent legal and opera-
tional risks (if any). With respect to underlying leasing contracts for real estate tenant or counterparty risks exist
as well as concentration and liquidity risks. These risks may materially adversely affect the Issuer's financial
position or results of operations.
Risks in connection with the use of information technology
Gothaer Allgemeine Group is also exposed to risks in the field of information technology, since unauthor-
ized access to or misuse of data processed on its IT systems could severely disrupt its operations. If the protection
measures put in place by the Gothaer Allgemeine Group against potential disruptions of its IT systems would
prove insufficient, Gothaer Allgemeine Group's business could be negatively affected and this could have a mate-
rial adverse effect on the Gothaer Allgemeine Group's financial condition and results of operations.
Risks in connection with credit ratings
The Issuer's business is dependent on the credit ratings assigned to it by rating agencies. A downgrade in the
ratings assigned to the Issuer may materially adversely affect relationships with customers, negatively impact
sales and increase costs of borrowing. Due to the adequate risk bearing ability, this risk is to be rated as low.
8

The Issuer's obligations in respect of pensions could substantially exceed the provisions that have been
made for these obligations
Until the end of 1999, the Issuer entered into pension commitments within the context of the implementa-
tion channels customary in Germany for company pension schemes, mainly in the form of indirect pension com-
mitments via independent pension funds such as the pension fund (Versorgungskasse) of Gothaer Versicherung-
bank VVaG and direct guarantees (Direktzusage). To cover these commitments the Issuer based on actuarial
reports pays contributions to the pension funds in accordance with the relevant pension schemes and made pen-
sion liability reserves (Deckungsrückstellung) pursuant to section 6a German Income Tax Act (Einkommens-
steuergesetz). However, the actuarial reports are based on certain actuarial assumptions, which include for exam-
ple demographic trends, pension trends, future salary trends and expected returns on plan assets. If actual devel-
opments were to deviate from those assumed, this could result in a substantial increase in pension obligations of
the Issuer, which could have a material adverse effect on the Issuer's financial condition and results of opera-
tions.
Because all pension schemes were closed by the end of 1999, an increasing number of the Issuer's employ-
ees do not benefit from any company pension schemes. In the medium term, the expenses relating to pensions
will slightly increase, in the long term, the Issuer expects a steady decline of contributions as a consequence
thereof.
Regulatory and Legal Risks
The Issuer is subject to regulatory and legal risks resulting from changes in the applicable legislative frame-
work or the failure to comply with regulatory or other statutory requirements, e. g. accounting regulation or tax
regulations.
Gothaer Insurance Group's insurance and asset management businesses are subject to detailed, comprehen-
sive laws and regulation as well as supervision in all the countries in which it does business. Changes in existing
laws and regulations may affect the way in which Gothaer Insurance Group conducts its business and the prod-
ucts it may offer. Changes in laws and regulations relating to pensions and employment, social security, financial
services including reinsurance business, taxation, securities products and transactions may materially adversely
affect Gothaer Insurance Group's insurance and asset management businesses by restructuring its activities,
imposing increased costs or otherwise.
In addition, current discussions on a new solvency regime for insurance companies in the EU (Solvency II)
are ongoing. As those discussions are in a preliminary stage, its potential future impact for capital requirements
can not currently be assessed.
The Issuer maintains an adequate risk management system regarding all abovementioned risks.
9

TERMS AND CONDITIONS OF THE BONDS
The German version of the Terms and Conditions of the Bonds is the only legally binding version. The Eng-
lish translation is for convenience only.
Emissionsbedingungen
Terms and Conditions of the Bonds
§ 1
§ 1
VERBRIEFUNG UND NENNBETRAG
FORM AND DENOMINATION
(a)
Währung, Nennbetrag und Form
(a)
Currency, Denomination and Form

Die Gothaer Allgemeine Versicherung AG, Köln (die ,,Emit-

Gothaer Allgemeine Versicherung AG, Cologne (the "Issuer")
tentin") begibt am 29. September 2006 (der ,,Begebungs-
issues on 29 September 2006 (the "Issue Date") subordinated
tag") auf den Inhaber lautende, nachrangige, fest- bis variabel
fixed to floating rate bearer bonds due 2026 (the "Bonds") in
verzinsliche Schuldverschreibungen fällig 2026 (die ,,Schuld-
a denomination of 50,000 each (the "Denomination") in the
verschreibungen") im Nennbetrag von je 50.000 (der
aggregate principal amount of 250,000,000.
,,Nennbetrag") und im Gesamtnennbetrag von 250.000.000.
(b) Globalurkunde
(b) Global
Bond

Die Schuldverschreibungen werden in einer Globalinhaber-

The Bonds will be represented by a global bearer bond (the
schuldverschreibung (die ,,Globalurkunde") ohne Zins-
"Global Bond") without coupons which will be deposited
scheine verbrieft und am oder um den Begebungstag bei einer
with a common depositary for Clearstream Banking, société
gemeinsamen Verwahrstelle für Clearstream Banking, société
anonyme, Luxembourg and Euroclear S. A./N. V. (together the
anonyme, Luxemburg und Euroclear S. A./N. V. (gemeinsam
"Clearing System") on or around the Issue Date. No defini-
das ,,Clearingsystem") hinterlegt. Einzelurkunden oder Zins-
tive Bonds or interest coupons will be issued.
scheine werden nicht ausgegeben.
§ 2
§ 2
STATUS
STATUS
(a)
Status der Schuldverschreibungen
(a)
Status of the Bonds

Die Schuldverschreibungen begründen nicht besicherte und

The obligations under the Bonds constitute unsecured and
nachrangige Verbindlichkeiten der Emittentin, die untereinan-
subordinated obligations of the Issuer ranking pari passu
der und mit allen anderen gegenwärtigen und zukünftigen
among themselves and at least pari passu with all other pres-
nicht besicherten und nachrangigen Verbindlichkeiten der
ent and future unsecured and subordinated obligations of the
Emittentin zumindest gleichrangig sind, soweit zwingende
Issuer. In the event of the liquidation, dissolution, insolvency,
gesetzliche Bestimmungen solche anderen nachrangigen Ver-
composition or other proceedings for the avoidance of insol-
bindlichkeiten nicht im Rang besser stellen. Im Fall der Liqui-
vency of, or against, the Issuer, the obligations of the Issuer
dation, der Auflösung oder der Insolvenz der Emittentin oder
under the Bonds will be subordinated to the claims of all un-
eines Vergleichs oder eines anderen der Abwendung der In-
subordinated creditors of the Issuer, so that in any such event
solvenz dienenden Verfahrens gegen die Emittentin stehen die
no amounts shall be payable in respect of the Bonds until the
Verbindlichkeiten der Emittentin aus den Schuldverschrei-
claims of the unsubordinated creditors of the Issuer shall have
bungen im Rang nach den Ansprüchen aller anderen nicht
first been satisfied in full. No security of whatever kind is, or
nachrangigen Gläubiger, so dass Zahlungen auf die Schuld-
shall at any time be, provided by the Issuer or any other per-
verschreibungen solange nicht geleistet werden, bis die An-
son securing rights of the holders of the Bonds (the "Hold-
sprüche von Gläubigern gegen die Emittentin aus nicht nach-
ers") under the Bonds.
rangigen Verbindlichkeiten nicht zuerst vollständig befriedigt
sind. Für die Rechte der Inhaber der Schuldverschreibungen
(die ,,Gläubiger") ist diesen keine Sicherheit durch die Emit-
tentin oder durch Dritte gestellt; eine solche Sicherheit wird
auch zu keinem Zeitpunkt gestellt werden.
(b)
Hinweis nach § 53c Absatz 3b Satz 4 Versicherungsaufsichts-
(b)
Notification pursuant to § 53c paragraph 3b Sentence 4 of the
gesetz (VAG)
German Insurance Supervisory Act (Versicherungsaufsichts-
gesetz, VAG)

Nachträglich können weder der Nachrang gemäß diesem § 2

No subsequent agreement may limit the subordination pursu-
beschränkt, noch die Laufzeit der Schuldverschreibungen
ant to the provisions set out in this § 2 or shorten any appli-
oder die jeweiligen Kündigungsfristen verkürzt werden. Eine
cable notice period (Kündigungsfrist) in respect of the Bonds.
vorzeitige Rückerstattung ist der Emittentin ohne Rücksicht
If the Bonds are redeemed prematurely the amounts redeemed
auf entgegenstehende Vereinbarungen zurückzugewähren, so-
must be returned to the Issuer irrespective of any agreement to
weit die Emittentin nicht aufgelöst wurde und das Kapital
the contrary insofar the Issuer has not been dissolved and such
nicht durch die Einzahlung anderer, zumindest gleichwertiger
capital has not been replaced by other at least equivalent regu-
Eigenmittel ersetzt worden ist oder die Bundesanstalt für
latory capital (Eigenmittel) of at least equal status or if the
Finanz
dienstleistungsaufsicht bzw. ein Funktionsnachfolger
Federal Financial Supervisory Authority (Bundesanstalt für
der Rückerstattung zustimmt.
Finanzdienstleistungsaufsicht) or any successor in capacity
has given its consent to the redemption.
10