Obligation Talant AG 3.125% ( DE000TLX2003 ) en EUR

Talant AG

100 % ▼

Allemagne

DE000TLX2003 ( en EUR )

3.125% par an ( paiement annuel )

12/02/2023 - Obligation échue

Prospectus brochure de l'obligation Talanx AG DE000TLX2003 en EUR 3.125%, échue

100 000 EUR

750 000 000 EUR

Talanx AG est un groupe d'assurance allemand opérant dans les domaines de l'assurance dommages, de la réassurance et de l'assurance vie, présent sur les marchés nationaux et internationaux.

Une obligation d'entreprise émise par Talanx AG, l'un des principaux assureurs allemands et européens dont le siège est en Allemagne, a récemment atteint sa maturité et a été intégralement remboursée, signalant la fin de son cycle de vie financier. Cet instrument de dette, identifié par le code ISIN DE000TLX2003, provenait d'une émission d'une taille totale de 750 000 000 EUR et était libellé en euros (EUR). Offrant un taux d'intérêt fixe de 3,125% avec une fréquence de paiement annuelle, cette obligation, dont la taille minimale à l'achat était fixée à 100 000 EUR, a vu sa maturité arriver au 12 février 2023. Son prix de remboursement sur le marché était de 100%, attestant ainsi de son remboursement à parité aux investisseurs à la date d'échéance.

Prospectus dated 11 February 2013

Talanx Aktiengesellschaft
(a stock corporation incorporated under the laws of the Federal Republic of Germany,
having its corporate domicile in Hannover, Federal Republic of Germany)
750,000,000 3.125% Fixed Rate Notes due 2023
ISIN DE000TLX2003, Common Code 088941705, WKN TLX200
Issue price: 99.958 per cent.

Talanx Aktiengesellschaft (the "Issuer") will issue on or about 13 February 2013 (the "Issue Date") 750,000,000 3.125% Fixed Rate
Notes due 2023 in the principal amount of 100,000 each (the "Notes").
The Notes will be governed by the laws of the Federal Republic of Germany ("Germany").
The Notes will bear interest from and including 13 February 2013 (the "Interest Commencement Date") to but excluding 13 February 2023
(the "Final Maturity Date") on their aggregate principal amount at a rate of 3.125% per annum, payable annually in arrear on 13 February
of each year, commencing on 13 February 2014. The Notes will cease to bear interest from the beginning of the day their principal amount
is due for repayment.
The Notes will be redeemed at their principal amount on the Final Maturity Date.
The Notes may be subject to early redemption for tax reasons as described in § 4(2) of the Terms and Conditions of the Notes (the "Terms
and Conditions").
The Notes to the bearer will initially be represented by a Temporary Global Note, without interest coupons, which will be deposited with
Clearstream Banking AG, Frankfurt am Main on or about the Issue Date of the Notes. The Temporary Global Note will be exchangeable for
a Permanent Global Note, without interest coupons, not earlier than 40 days after the Issue Date, upon certification as to non-U.S.
beneficial ownership.
This prospectus in respect of the Notes (the "Prospectus") constitutes a prospectus within the meaning of Article 5.3 of Directive
2003/71/EC of the European Parliament and of the Council of 4 November 2003 (as amended, inter alia, by Directive 2010/73/EU) (the
"Prospectus Directive"). This Prospectus will be published in electronic form together with all documents incorporated by reference on the
website of the Luxembourg Stock Exchange (www.bourse.lu).
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier, Luxembourg ("CSSF") in its capacity as
competent authority under the Luxembourg Act dated 10 July 2005 relating to prospectuses for securities (Loi du 10 juillet 2005 relative aux
prospectus pour valeurs mobilières, the "Luxembourg Prospectus Law"). By approving this Prospectus, CSSF gives no undertaking as to
the economic and financial soundness of the operation or the quality or solvency of the Issuer.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") and the
Notes are subject to special U.S. tax law requirements where held by U.S. persons (TEFRA D rules). Subject to certain exceptions, the
Notes may not be offered, sold or delivered within the United States or to U.S. persons.
Application has also been made to the Luxembourg Stock Exchange for the Notes to be listed on the official list of the Luxembourg Stock
Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated market. The Luxembourg
Stock Exchange's regulated market is a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the
Council of 21 April 2004 on markets in financial instruments.

Joint Lead Managers
Deutsche Bank
J.P. Morgan
The Royal Bank of Scotland

RESPONSIBILITY STATEMENT
The Issuer with its registered office in Germany accepts responsibility for the information contained
in this Prospectus and hereby declares that, having taken all reasonable care to ensure that such is
the case, the information contained in this Prospectus is, to the best of its knowledge, in
accordance with the facts and does not omit anything likely to affect the importance of such
information.
The Issuer further confirms that (i) this Prospectus contains al information with respect to the Issuer
and its consolidated subsidiaries taken as a whole (the "Talanx Group" or the "Group") and to the
Notes which is material in the context of the issue and offering of the Notes, including al information
which, according to the particular nature of the Issuer and of the Notes 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 Talanx Group
and of the rights attached to the Notes; (i ) the statements contained in this Prospectus relating to
the Issuer, the Talanx Group and the Notes are in every material particular true and accurate and
not misleading; (i i) there are no other facts in relation to the Issuer, the Talanx Group or the Notes
the omission of which would, in the context of the issue and offering of the Notes, make any
statement in the Prospectus misleading in any material respect; and (iv) reasonable enquiries have
been made by the Issuer to ascertain such facts and to verify the accuracy of all such information
and statements.
NOTICE
No person is authorised to give any information or to make any representation other than those
contained in this Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorised by or on behalf of the Issuer or Deutsche Bank AG, London
Branch, J.P. Morgan Securities plc and The Royal Bank of Scotland plc (together, the "Joint Lead
Managers" or the "Managers").
This Prospectus should be read in conjunction with any supplement hereto and with any other
documents incorporated herein by reference.
This Prospectus contains certain forward-looking statements, including statements using the words
"believes", "anticipates", "intends", "expects" or other similar terms. This applies in particular to
statements under the caption "General Information on the Issuer and the Talanx Group Business
Overview" and "Recent Developments/Trend Information" and statements elsewhere in this
Prospectus relating to, among other things, the future financial performance, plans and
expectations regarding developments in the business of the Talanx Group. These forward-looking
statements are subject to a number of risks, uncertainties, assumptions and other factors that may
cause the actual results, including the financial position and profitability of the Talanx Group, to be
materially different from or worse than those expressed or implied by these forward-looking
statements. The Issuer does not assume any obligation to update such forward-looking statements
and to adapt them to future events or developments.
Each investor contemplating purchasing any Notes should make its own independent investigation
of the financial condition and affairs, and its own appraisal of the creditworthiness, of the Issuer and
the Talanx Group. This Prospectus does not constitute an offer of Notes or an invitation by or on
behalf of the Issuer or the Managers to purchase any Notes. Neither this Prospectus nor any other
information supplied in connection with the Notes should be considered as a recommendation by
the Issuer or the Managers to a recipient hereof and thereof that such recipient should purchase
any Notes.
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This Prospectus reflects the status as of its date of issue. The offering, sale and delivery of the
Notes and the distribution of the Prospectus may not be taken as an implication that the information
contained herein is accurate and complete subsequent to the date hereof or that there has been no
adverse change in the financial condition of the Issuer since the date hereof.
To the extent permitted by the laws of any relevant jurisdiction, neither the Managers nor any of
their respective affiliates accepts responsibility for the accuracy and completeness of the
information contained in this Prospectus or any other document incorporated by reference.
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 distribution of this Prospectus and the offering, sale and delivery of the Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Prospectus comes are
required to inform themselves about and to observe any such restrictions. For a description of the
restrictions applicable in the United States of America and the United Kingdom, see "Subscription
and Sale of the Notes Selling Restrictions". In particular, the Notes have not been and wil not be
registered under the United States Securities Act, as amended, and are subject to United States tax
law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within
the United States of America or to U.S. persons.
The legal y binding language of this Prospectus is English. Any part of the Prospectus in German
language constitutes a translation, except for the Terms and Conditions of the Notes in respect of
which German is the legal y binding language.
In this Prospectus all references to "", "EUR" or "Euro" are to the currency introduced at the start
of the third stage of the European economic and monetary union, and as defined in Article 2 of
Council Regulation (EC) No. 974/98 of 3 May 1998 on the introduction of the Euro, as amended.
IN CONNECTION WITH THE ISSUE OF THE NOTES, DEUTSCHE BANK AG, LONDON
BRANCH (THE "STABILISING MANAGER") (OR ANY PERSON ACTING ON BEHALF OF ANY
STABILISING MANAGER) MAY OVER-ALLOT NOTES OR EFFECT TRANSACTIONS WITH A
VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN
THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT
THE STABILISING MANAGER (OR ANY PERSON ACTING ON BEHALF OF THE STABILISING
MANAGER) WILL UNDERTAKE STABILISATION ACTION. ANY STABILISATION ACTION MAY
BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE
TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY
TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE
DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES.
ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE
STABILISING MANAGER (OR ANY PERSON ACTING ON BEHALF OF THE STABILISING
MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.
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TABLE OF CONTENTS
RISK FACTORS .................................................................................................................................. 5
ANLEIHEBEDINGUNGEN ................................................................................................................ 28
TERMS AND CONDITIONS OF THE NOTES .................................................................................. 28
GENERAL INFORMATION ON THE ISSUER AND THE TALANX GROUP .................................... 44
TAXATION ......................................................................................................................................... 58
SUBSCRIPTION AND SALE OF THE NOTES ................................................................................. 63
GENERAL INFORMATION ............................................................................................................... 65
DOCUMENTS INCORPORATED BY REFERENCE ........................................................................ 67

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RISK FACTORS
The Issuer believes that the fol owing factors may affect its ability to fulfil its obligations under the
Notes. Factors which the Issuer believes may be material for the purpose of assessing the market
risks associated with the Notes are also described below. Potential investors should carefully read
and consider these risk factors before deciding upon the purchase of the Notes.
The Issuer believes that the factors described below represent the principal risks inherent in
investing in the Notes, but the Issuer may be unable to pay interest, principal or other amounts on
or in connection with the Notes, respectively, for other reasons than those described below, and the
Issuer does not represent that the statements below are exhaustive. Prospective investors should
also read the detailed information set out elsewhere in this Prospectus (including any documents
incorporated by reference herein) and reach their own views prior to making any investment
decision.
Potential investors should consider al information provided in the Prospectus and consult their own
experts. In addition, the investors should bear in mind that several of the mentioned risks may occur
simultaneously and that their implication can, possibly together with other circumstances, thus be
intensified. The order in which the risks are described does neither represent a conclusion about
their probability of occurrence nor the gravity or significance of the individual risks. The following
information is not exhaustive. Further risks which have not been visible yet may also affect the
business activities of the Talanx Group and the ability of the Issuer to fulfil its obligations arising
from the Notes. Due to the occurrence of each individual risk described in the following, investors
could lose their invested capital in whole or in part.
Words and expressions defined in "Terms and Conditions of the Notes" below shall have the same
meanings in this section.
Risks relating to the Issuer and to the Talanx Group
Set out below are risks associated with the Issuer and the Talanx Group which may have a material
impact on its business operations and/or the level and volatility of its profitability, and therefore its
ability to perform its obligations under the Notes, including:
BUSINESS AND COMPANY RELATED RISKS
The Talanx Group is exposed to significant counterparty risks.
The Talanx Group has monetary and securities claims under transactions against ceding
companies, policyholders, reinsurers, retrocessionaires, insurance brokers, financial institutions and
other debtors. In all these cases, the Talanx Group is exposed to a significant counterparty risk, i.e.,
the risk that the debtor is in financial difficulties and cannot repay due and payable claims. An
increased default would mean that value adjustments above and beyond the extent already covered
by provisions would have to be made on assets of the Talanx Group and could negatively affect the
equity of the Talanx Group. The risks are especially high in relation to reinsurers and
retrocessionaires, because these debtors provide coverage for significant amounts of insurance
risks. If Talanx Group's internal guidelines for the concentration of counterparty risks of individual
debtors (in particular reinsurers and retrocessionaires) and the permanent monitoring of their
solvency are not adhered to or are not sufficient, there may be increased risks for the Talanx Group.
In addition, systemic risks may materialise, i.e., the risk that, as a consequence of extraordinary
burdens imposed on one or more market participants (e.g. in case large reinsurers suffer high
losses from major incidents), the solvency of other market participants which are exposed to the
counterparty risk of these parties is indirectly affected. In view of the uncertain development of the
5

capital markets and the general global economic development, the decline in real estate values and
comparable influencing factors, the counterparty risks may increase in the future, as these factors
may simultaneously affect the solvency of a multitude of market participants.
If any of the risks mentioned above materialises this could have a detrimental effect on the assets,
financial position and net income of the Talanx Group.
If the actuarial valuations of the insured risks used as a basis for the calculation of the
premiums prove to be incorrect, this may have considerable negative effects on the net
assets, financial position and results of the Group.
By concluding insurance and reinsurance contracts, the Talanx Group knowingly underwrites risks.
At the time these contracts are concluded, it is not yet certain whether or not and in which amount
compensation wil have to be paid. The price determination is therefore based on past experience
and projected calculations for the future. The results of the Talanx Group materially depend on the
extent to which the benefits payable in the insured event actual y correspond to the assumptions
used for the price determination. Typical risks in life insurance are associated, for example, with the
fact that the policies grant long-term benefit guarantees. Biometric actuarial bases such as mortality,
longevity and morbidity are established at the inception of a contract in order to calculate premiums
and reserves. Over time, however, these assumptions may prove to be no longer accurate and may
therefore necessitate additional expenditures.
The Talanx Group seeks to minimise the risk of incorrect assumptions by reviewing the calculation
models on an ongoing basis and regularly comparing the claims expected with the most recent
information available in the insurance industry. Nevertheless, deviations may occur if data material
is interpreted incorrectly or external factors outside the sphere of influence of the Talanx Group
change. A price determination, which is commensurate with the risk, is also complicated in the
casualty and property business particularly due to the increasing complexity and long-term nature of
the run-off. If the calculated premiums are insufficient to cover the claims arising upon occurrence of
the insured event, this may have an adverse effect on the net assets, financial position and results
of the Talanx Group.
The provisions for future liabilities from insurance claims may prove to be too low and lead
to an additional need for provisions.
The amount of the necessary provisions for future liabilities from insurance claims is determined by
the Talanx Group using actuarial methods and statistical models. Adjustments are continuously
made, taking into account the relevant most recent market information available to the Group.
Provisions are subject to change due to a number of variables which affect the ultimate cost of
insurance claims, such as changes in the legal environment, results of litigation, changes in medical
costs, costs of repairs and other factors. Therefore, it cannot be excluded that the provisions so
established by the Talanx Group may prove to be too low if the calculations of future claims deviate
from reality.
In the life insurance and health reinsurance lines, changes may arise with respect to certain
external parameters. For instance, the increase in the general life expectancy, a higher morbidity or
changes of other biometric actuarial bases may lead to a higher need for provisions. In the
property/casualty business, there is the risk that the provisions are insufficient to fully compensate
damage which is yet unknown. In the past, miscalculations occurred in particular in respect of
claims brought in connection with asbestos and claims arising from the attacks on the World Trade
Center on 11 September 2001.
If, on the basis of the actual future development or as a consequence of the inaccurate selection or
application of methods to calculate the constituted provisions, the Talanx Group were to be
6

compel ed to increase the provisions or if the liabilities of the Talanx Group in connection with the
events that it has insured were to be higher than the constituted provisions, this could detrimentally
affect the assets, financial position and net income of the Talanx Group.
In the sale of insurance products, the Talanx Group relies heavily on its network of
insurance intermediaries.
Risks may arise due to the dependency on distribution channels and/or individual intermediaries. A
significant part of the Talanx Group's products is distributed through a network of external
intermediaries. A sufficient number of qualified and productive sales partners is considered a
prerequisite for realising the planned new business targets. If the Talanx Group fails to attract or
maintain a sufficient number of sales partners, this may negatively affect its business. This applies
in particular to the Talanx Group's bancassurance activities, i.e. the distribution through banks.
Here, the Talanx Group entered into long-term distribution agreements (some of them on an
exclusive basis) with distribution partners (e.g. Deutsche Postbank AG, TARGOBANK AG & Co.
KGaA and certain saving banks), whereas the offered products are targeted to the customers of
these distribution partners and are integrated in their customer advice services and marketing
processes. If the Talanx Group is not in a position to maintain and/or expand these cooperation, this
may negatively affect the business volume, as could the acquisition of Talanx Group's distribution
partners by a third party who does not intend to maintain the same level of cooperation with Talanx
Group.
In addition, investments in these cooperations (e.g. marketing) may not be profitable and earnings
may decline.
In this context, the growing concentration of the intermediaries presents an increased risk. In the
past, this concentration trend was reinforced in particular by the Directive 2002/92/EC of the
European Union on insurance mediation. On the one hand, the independence of the intermediaries
could be reduced while, on the other hand, pools/associations could gain considerable market
power.
Additional risks for the distribution may result from a change in the legal framework relating to
insurance brokerage. It may not be excluded that the common business model for insurance
brokerage in Germany wil not remain permissible in its current form, where the broker receives a
commission from the insurance company in relation to the conclusion of an insurance agreement
which wil then wholly or partially be taken into consideration when the insurance premium is
calculated. In connection with the Act Reforming the Laws on Intermediaries for Financial
Investments and on Investment Products published on 12 December 2011 the German government
declared that it intends to assess the possibilities for a statutory proposal relating to fee-based
advisory services. The German Ministry of Food, Agriculture and Consumer Protection defined
some criteria, pursuant to which fee-based advisory and brokerage services, where the customer
pays a fee to the broker, must be provided as an alternative to insurance brokerage which is solely
based on the commission model. More details of this proposal are yet to be determined. It may not
be excluded that such change in law may result in significant new chal enges in the distribution of
insurance products. Should the Talanx Group fail to adapt to such changes or adapt in a less
efficient way than its competitors this may result in losses in the underwriting of new business and a
drop in the market share.
If any of the distribution risks mentioned above materialises this may have adverse effects on the
Talanx Group's net assets, financial position and results.
A downgrade of the credit rating of the Talanx Group companies by rating agencies may
trigger significant consequences as regards the financing costs and customer relations as
well as the sale of the Talanx Group's products.
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The assessment of the financial strength and creditworthiness of the Talanx Group by rating
agencies is of critical importance to the Talanx Group's competitiveness. In this context, a distinction
is to be made between the Insurer Financial Strength Rating ("IFSR"), which relates to the financial
stability of an insurance company regarding the service of its liabilities under insurance contracts,
and the Counterparty Credit Rating ("Counterparty Credit Rating"), which assesses the overal
financial strength of a company.
As of the date of this Prospectus, the IFSR assigned by Standard & Poor's Credit Market Services
Europe Ltd., branch office Germany ("S&P") to Talanx Group's core primary insurance entities is
"A+" (stable outlook) and the Counterparty Credit Rating assigned by Standard & Poor's to Talanx
AG is "A-" (stable outlook). 1
The rating agencies are monitoring their ratings and valuation methods on a continuous basis and
observe the financial strength of the Talanx Group. Therefore, a future downgrading by the rating
agencies, whether due to changes in the net assets, financial position and results of the Talanx
Group or on account of changes in the assessment of the insurance industry as a whole, cannot be
precluded. Any downgrade of the rating can adversely affect the sale of the Talanx Group's products
and impair its competitiveness on the markets. Also, the Talanx Group's ability to raise capital at the
capital markets could be constrained in the event of a downgrade. In addition, future downgrades of
the ratings may result in new debts or in accelerated maturity of already existing debts which
depend on the maintenance of a certain rating.
Standard & Poor's confirmed the current rating of the primary insurance business in a report on
28 September 2012, but also indicated that it could consider a downgrade if the profitability of the
primary insurance business does not develop as expected or if capitalisation deteriorates.
The Talanx Group relies on the proper and efficient functioning of its IT-systems, and a
large-scale malfunction could result in disruptions.
The Talanx Group ability to keep its business operating depends on the proper and efficient
operation of its computer and data-processing and telecommunications systems. Since computer
and data-processing systems are susceptible to malfunctions and interruptions (e.g., interruptions
of power supply, computer viruses and a range of other hardware, software and network problems),
it cannot be excluded that such malfunctions or interruptions will occur in the future. A significant or
large-scale malfunction or interruption of one or more of the Talanx Group's computer or data-
processing systems could adversely affect its ability to keep its operations running efficiently. If a
malfunction results in a wider or sustained disruption to the Talanx Group's business, this could
have a detrimental effect on the assets, financial position and net income of the Talanx Group.
Measures aiming at cost reduction or at an increase in efficiency may wholly or partially fail.
All markets in which the Talanx Group operates are characterised by a high competitive pressure.
Competing insurance and financial companies have in some cases cost advantages, e.g. deriving
from their economics of scale or distribution strategy. In particular, in markets and market segments,
in which market shares do normally not significantly change, costs are of high importance for the
Talanx Group's profitability. In the Retail Germany division, the Talanx Group has some competitive
disadvantages due to the complex corporate and distribution structure as well as different IT
systems, in particular as a consequence of the integration of Gerling group, which was acquired by
the Talanx Group in 2006. Therefore, the level of premiums, in particular in the causality insurance,

1 The office issuing and elaborating the rating was a registered branch of Standard & Poor's Credit Market Services Europe
Limited which is, to the Issuer's belief, registered in accordance with Regulation (EC) No 1060/2009 of the European Parliament
and of the Council of 16 September 2009 on credit rating agencies (see "List of registered and certified credit rating agencies"
which can be accessed on ESMA's homepage under www.esma.europa.eu/page/List-registered-and-certified-CRAs).
8

is not in al cases sufficient to reach positive rates of return. In order to overcome these
disadvantages and to achieve in the long term a competitive position, the Talanx Group has taken
and wil continue to take measures aiming at cost reduction or at an increase in efficiency. Currently,
the Talanx Group has identified potential for efficiency enhancements in the Retail Germany division
and, as part of project "WIR", commenced the set-up of centralised service units and combined
distribution channels. The project shall be finalised by 2015. In addition, the Talanx Group
commenced several projects regarding the unification and modernisation of the IT-systems in the
primary insurance business. No assurance can be given, that these projects or other measures
aiming at cost reduction or at an increase in efficiency will successfully be implemented and wil
achieve the intended results. Should material measures wholly or partial y fail this could negatively
affect the Talanx Group's net assets, financial position and results.
Operational risks may have a negative effect on the business operations of the Talanx
Group.
Operational risks encompass the risk of losses occurring because of the inadequacy or failure of
internal processes or as a result of events triggered by employee-related, system-induced or
external factors. Operational risks exist, inter alia, in relation to the risk of business interruptions or
system failures or may derive from unlawful or unauthorised acts. Because of the broad spectrum of
operational risks, the realisation of one of these risks could have a detrimental effect on the assets,
financial position and net income of the Talanx Group.
Risks may evolve, inter alia, due to the fact that processes, for example in the IT, human resources,
accounting and legal divisions, have been delegated to internal service providers. If such risks
materialise, interruptions could occur in the operational work flow which may have an adverse
impact on the earnings situation and possibly harm the Group's reputation.
Loss of a number of key clients may have negative effects on the financial situations of the
Talanx Group.
Particularly in the reinsurance and industrial lines business division the Talanx Group cooperates
with large customers who generate high premiums. However, at the moment the Talanx Group is
not material y dependent on one single client. If, however, the Talanx Group would lose a number of
its key clients, it could have a detrimental effect on the assets, financial position and net income of
the Talanx Group.
Poor performance of the asset management may result in a divergence of the values of the
investment portfolio and the liabilities from the insurance business, as well as in a loss of
existing or potential future customers.
The premium income of the Talanx Group is invested in different types of assets. Thereby, the
Talanx Group pursues a conservative and internal y defined investment policy, which focuses on
liquid assets and issuer of high solvency. It may, however, not be excluded that performance
fluctuations or wrong decisions in connection with the selection of assets and the related trading
activities or other misconducts occur (including wilful breaches of mandatory law and investment
guidelines of the Talanx Group). This could result in losses of the investment portfolio and in a
divergence to the value of the liabilities from the insurance business. In addition, the Talanx Group
may lose current or potential customers and its reputation may suffer. This is particularly true for the
asset management business in which the Talanx Group competes with other financial services
providers and where the current and prospective customers compare the performance of these
competitors with that of the Talanx Group. If the performance of the Talanx Group's asset
management lags behind its competitors, it could result in a loss of customers, a reduction in the
managed assets and loss of market shares.
9

If any of the risks mentioned above materialises this could negatively affect the Talanx Group's net
assets, financial position and results.
The Talanx Group's reinsurance business relies on the provision of correct and sufficient
risk information by the relevant primary insurance company; incorrect information may
cause unforeseen burdens on the reinsurance business.
The reinsurance division of the Talanx Group systematically covers risk underwritten by primary
insurers and reinsurers. In deciding on whether such reinsurance or retrocession agreements are
entered into and which technical provisions are to be provided the Talanx Group relies on the
provision of correct and sufficient risk information by the respective ceding company. Should the
Talanx Group, on the basis of incorrect or incomplete information, wrongfully assess the covered
risks, this may result in additional expenses. Even if the Talanx Group would have recourse claims
against the ceding company it cannot be assured that these claims are fully valuable and
enforceable. This could negatively affect the Talanx Group's net assets, financial position and
results.
The Talanx Group's risk management systems might not be able to cover sufficiently
material risks.
The Talanx Group maintains complex risk management systems. These systems define the Group's
risk strategy, the allocation of tasks and responsibilities within the risk management process (on a
group level as wel as on the level of the business divisions) and the continuing identification,
documentation, assessment, reporting and the measures to control and avoid risks. Despite the
implementation of group wide risk management guidelines, the occurrence of errors or interruptions
of these systems may not be excluded.
In addition, the risk models used by the Talanx Group to quantify the risks are based on simplified
assumptions, which do not match the reality in every respect. For example, the market price risk of
the investment portfolio is measured on the basis of the value-at-risk model, which is based on
historical data and empirical values (e.g. market volatility and risk correlations). It cannot be
assured these data and assumptions correctly indicate in every respect the future market
development and the risks arising thereof for the Talanx Group's business and investment portfolio.
The risk of potential y incorrect identification of the risks applicable to the Talanx Group may
continue even if the planned changeover to new risk models currently developed by the Talanx
Group occurs. These new risk models are developed considering the expected requirements to be
imposed by EU Directive 2009/138/EC on the taking-up and pursuit of the business of Insurance
and Reinsurance ("Solvency II"). Since 2008 the Talanx Group and the Hannover Re Group are in
an ongoing review process with the German Financial Supervisory Authority ("BaFin") in this
respect.
If the Talanx Group's risk control and risk management systems do not sufficiently reflect material
risks or should the handling of risks not be sufficient this could negatively affect the Talanx Group's
net assets, financial position and results.
10