HDI Versicherung/2025/FY/Annual report: Difference between revisions

| summary_md = <!File:HDI_Versicherung-2025- ARCHIVE_MD_LINK_HERE FY-->Annual_report.md

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== Table of ContentsContent ==

* Section 2: Lagebericht

* Section 2: Geschäftstätigkeit, Organisation und Struktur

* Section 3: Wirtschaftsbericht

* Section 18: Risikobericht

* Section 26: Prognose- und Chancenbericht

* Section 29: Versicherungsarten

* Anlage 1 zum Lagebericht (Appendix 1 to the Management Report)

=== Business activitiesActivities, organizationOrganization and structureStructure ===

==== Corporate policyPolicy backgroundBackground ====

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* HDI Deutschland AG manages thisthe HDI Deutschland business division.

* HDI Versicherung AG provides comprehensive insurance coverage for companies in trade, services, and crafts withthrough industry-specific solutions and modular insurance packages.

* HDI Versicherung AG aimspositions toitself beas a provider of affordable and transparent insurance products for private and corporate customers.

* The focus is on price- and performance-conscious customers who independently navigate theseek market solutions, as well as adviceconsultation-oriented customers seekingwho desire customized insurance products.

* The company uses its in-house sales force organization forto provide a holistic customer caresupport approach for its customers.

* In addition to its own [[Definition:Property & casualty|property and casualty]] insurance, legal protection, credit, life, and health insurance products from other companies are also offered through this channel.

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'''RatingCredit rating'''

* The outlook for HDI Versicherung AG's rating is "'stable"'.

* StandardThe &rating Poor's certifiedconfirms that the company has a particularly strong financial profile.

==== Our salesSales partnersPartners ====

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* This is achieved by maintaining and expanding cooperation with carefully selected salesdistribution partners across all relevant distributionsales channels.

* Relevant distributionsales channels for HDI include its own exclusive sales organization, salesdistribution through independent intermediaries and multi-agents, and various cooperation partners.

* AThis cross-segment perspective is crucial for improving processes and services for the benefit of customers and salesdistribution partners.

* With the increasing importance of online sales, HDI also seeksaims to optimize interfaces with salesits distribution partners and offer them digitally signablecontractible products.

==== Group Services within the Group ====

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'''HDIGroup-wide Versicherung AG operationsservices and servicessynergies'''

* Essential services from cross-functional areas (e.g., such as Finance, Human ResourcesHR, IT, Operations, and Sales,) are provided by HDI AG for the domestic companies of the Talanx Group, including HDI Versicherung AG.

=== Overall economicEconomic and industryIndustry-specificSpecific conditionsFramework Conditions ===

==== Economic developmentDevelopment ====

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'''Global economic development and US trade policy'''

* Global economic growth remained at 3.3% YoY in 2025, the weakest value since the CovidCOVID year 2020, influenced by the start of US President Trump's second term and his administration's trade policy.

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'''EuropeanGerman and Eurozone economic developmentperformance'''

* The German economy recorded a +0.2% YoY increasegrowth in 2025 after two consecutive recession years.

* Germany's GDP was only 0.1% above its pre-CovidCOVID level at the end of 2019.

* A decline inDeclining construction and equipment investments in Germany waswere not offset by an increase in the defense sector.

* The special fund for infrastructure announced in March and higher defense spending announced in March are expected to take full effect in the coming years.

* TheGermany German economy, similar toand France, lagged behind itstheir European peers economically; France experienced political instability and government changes in 2025 due to budget disputes.

* Excluding Ireland, which saw double-digit GDP growth in 2025 due to sharply rising (pharmaceutical) exports, Eurozone growth would have been only 0.9% YoY.

'''USChina and ChinaLatin America economic developmentperformance'''

'''LatinGlobal America economic developmentinflation and globalinterest inflationrates'''

* US inflation also slightly decreased from 2.9% to 2.7% overYoY in 2025, as anticipated strong price effects from US tariff barriers did not fully materialize.

* US inflation remained above the FedFederal Reserve's (Fed) target, leading the Fed to react cautiously to the weakening labor market byand cuttingcut theits key interest rate from 4.50% to 3.75%.

==== Capital markets ====

'''GlobalInternational equity markets 2025performance'''

* The S&P 500 ended 2025 with a price increase of +16.8% (all performance figures in USD), marking its sixth double-digit gain in seven years.

* Loan granting is carried outoccurs within the scope of capital investment by Ampega Asset Management GmbH, with a process established for control by the Money Laundering Officer.

* Legal questions and challenges focusingrelated onto IT security are becoming more important for HDI Group companies.

* The EU also issuedenacted the Artificial Intelligence Act (Regulation (EU) 2024/1689) in 2024, which affects the insurance industry and will have specific implications for the HDI Group.

==== Data protection ====

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* Talanx Group insurance companies process extensive personal data for application, contract, and claims processinghandling.

* The data protection management system isensures designedcompliance towith observedata and controlprotection requirements, ofincluding the EU General Data Protection Regulation (GDPR) and the German Federal Data Protection Act.

* Employees are trained on careful data handling and are contractually obligated to handle data carefully and comply with data protection requirements.

* CentralCentralized procedures are in place for process-independent data protection requirements, such as engagingcommissioning service providers.

* Compliance with applicable law is a prerequisiteessential for the Talanx Group companies' long-term successful business operationssuccess.

* The Group focuses on adapting its business and products to legal, supervisory, and tax frameworksregulations.

* Mechanisms are in place to identify and evaluateassess future legal developments and their impact on business operations early, allowing for timely adjustments.

=== Business performance and positionsituation ===

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'''Business Performanceperformance and Positionsituation'''

==== TopicsReporting ofyear the reporting yeartopics ====

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* TheThis section covers topics offrom the reporting year.

===== SecuringFuture the futureviability of the HDI Germany segment =====

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'''HDI Deutschland strategic programGermany "Substanz" Strategic Program'''

* HDI DeutschlandGermany is continuing its entrepreneurialbusiness planning withinunder the new strategic program "Substanz" (SBSTNZ.).

* The guidelines of the new strategicstrategy program are: Simple - Focused - Successful.

* CentralKey toaspects thisinclude strategy are the reduction ofreducing complexity and the increase ofincreasing efficiency in internal processes.

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* HDI DeutschlandGermany aims to become more profitable in the medium term by focusing on core competencies and a streamlined product portfolio.

* The company intends to distinguish itself through high-quality service offerings and reliable cooperationcollaboration with sales partners.

* Important progress was made in the strategic program last year, with the company responding to central challenges by sharpening its strategic direction.

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* In the motor insurance business, the focus is on securing a profitable portfolio in a competitive market environment, driven by high claims inflation and correspondingassociated high claims costs.

* The emphasisEmphasis is placed on consistent alignment with market requirements and customer demandsneeds for simple products and digital processes.

* The implementationImplementation of the "Substanz" strategic program shows noticeable efficiency gains through the further development of operations and claims, particularly by focusingvia business modelsmodel focus, automation, and theAI use of AI.

* The corporate and freelance professions [[Definition:Business mix|business unitsegment]] is being expanded, especially through competitive-differentiating, proven market and business expertise, and systematic portfolio management of the portfolio for profitability.

* InProfitability fireof and multi-risk products,the portfolio profitability, processand professionalization,/efficiency and efficiencyof improvementsprocesses are being consistently and successfully driven forwardin fire and multi-risk products.

* Average premium income increased throughdue to targeted premium adjustments and restructuring.

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'''Future readinessAI and agilityAgility Initiatives'''

* The use of generative artificial intelligence is planned for the company's future viability and is currently in a testing phase inacross various corporate departments.

* Agility is an overarching goal, aiming forenabling the organization to react flexibly to changes and act proactively.

* This includes early identification and adoption of changing economic conditions to make necessary adjustments proactively and respond to market developments.

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* The IT strategy for the Private and CommercialCorporate Insurance Germany division covers all essential IT aspects for the risk carriers of HDI Germany.

* The IT strategy incorporates the requirements of the business strategy forof all risk carriers.

* DigitalizationDigitization of processes and service offerings, along with the modernization of IT infrastructure, shape HDI Germany's business activities.

* Essential components of the IT strategy include the sustainableSustainable implementation of IT compliance and regulatory requirements under the Digital Operational Resilience Act (DORA), and continuous improvement of the security protectionis levelessential.

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* Examples of thesepositive evaluationsratings are found inacross all private propertynon-life insurance sectorssegments.

* Stiftung Warentest also rated the residential building insurance in the (Premium [[Definition:Business mix|product line]]) with 'Sehr gut (0.7)'.

* Franke & Bornberg Research GmbH awarded the HDI private liability insurance (Premium [[Definition:Business mix|product line]], Single and Premium [[Definition:Business mix|product line]], Family) and the residential building insurance (Premium [[Definition:Business mix|product line]] / Multi-family house Premium product) with 'FFF+' (excellent) in the HUS-Privat sectorsegment.

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'''Sustainability strategy and net-zero ambitiontargets'''

* Talanx Group, as an international insurance group and long-term investor, has long been committed to responsible corporate managementgovernance focused on sustainable value creation.

* The sustainability strategy is an integral part of the Groupcorporate strategy, based on the targeted implementation of ESG-specific aspects (Environmental, Social, Governance) across the entire value chain.

* The sustainability strategy focuses on environmental aspects in investments, underwriting, and own operations, the Group's social focus of the Group, and ensuring adequate governance.

* Talanx Group aims to achieve net-zero emissions by 2050 for its insurance and investment portfolioportfolios{{fn ref|1}}.

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'''UnderwritingThermal exclusionscoal forand fossil fuelsfuel exclusions'''

* Exclusions for conventional oil and gas projects in underwriting came into forceeffect in July 2023, including a general exclusion of new greenfield oil and gas projects.

* Further restrictions have beenwere defined since July 2023, and the phase-out of all existing oil sands risks was brought forward to the end of 2025.

* InSince addition to existing2024, exclusions for oilfracking andof tarshale sandsgas and for oil andin gasthe drillingArctic apply, exclusionsin foraddition frackingto ofexisting shaleexclusions gasfor oil and oiltar insands theand Arcticfor haveoil appliedand sincegas 2024drilling.

* ASince 2025, there will be a systematic reduction of exposure along the entire value chain of the oil and gas sector will take place from 2025.

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* AIn uniform2022, a unified framework for the mostlylargely decentralized social and community engagement was created and anchoredembedded in the Groupcorporate strategy in 2022.

* The Group's governance is a significant topic for the capital market and a key focus of the sustainability strategy.

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'''Financialfinancial performance indicators'''

* The company has setdefined only financial key performance indicators (KPIs) for the 2025 fiscalfinancial year.

* These indicatorsKPIs include [[Definition:Gross written premiums|gross written premiums]], gross expenses for insurance claims, gross expenses for insurance operations, investment income, and net incomeprofit before profit transfer.

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'''Productproduct ratings and awards'''

* The HDI Versicherung (Premium [[Definition:Business mix|product line]]) receivedwas anrated "FFF" (very good) rating.

* The HDI Kfz-Versicherung (Motor Premium [[Definition:Business mix|product line]]) wasmaintained ratedits top rating of "FFF+" (excellent) byfrom the independent analysis firm Franke & Bornberg Research GmbH.

* Franke & Bornberg Research GmbH rated the "Inhaltsversicherung Sach Allgefahren" (ContentsProperty All-Risk Contents Insurance) with modules for gastronomyGastronomy, floodFlood, and backwaterBackwater as "FFF" (very good).

* The "Betriebshaftpflichtversicherung" (Business Liability Insurance) with modules for constructionConstruction, servicesServices, tradeTrade, craftsCrafts (ancillaryAncillary constructionConstruction tradesTrades), and ancillaryAncillary medicalMedical professionsProfessions received an "FFF+" (excellent) rating.

* The commercial cyber insurance (CyberversicherungCyber fürInsurance Firmenfor undCompanies Freieand BerufeFreelancers, BetriebsunterbrechungBusiness durchInterruption due to Cloud-Ausfall Outage) was also rated "FFF" (very good).

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=== Earnings performance of HDI Versicherung AG ===

==== Business performance: Insurance business total ====

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| style="text-align:left" | Technical result forf. owne. accountR.

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'''[[Definition:Gross written premiums|Gross written premiums]] and netreinsurance premiums'''

* HDI Versicherung AG's [[Definition:Gross written premiums|grossGross written premiums]] decreased by EUR 23.5m to EUR 1,564.8m (prior: EUR 1,588.3m).

* Positive development in commercialcorporate lines did not fully offset the declinedeclines in motor insurance due to portfolio reductions.

* Freelance professions and private lines also saw a slight decreasedeclines in [[Definition:Gross written premiums|gross written premiums]] due to portfolio reductions.

* Reinsurance premiums decreased by EUR 5.5m to EUR 69.4m (prior: EUR 74.9m) due to lower reinsurance costs and a higher retention rate in the cyber segment.

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'''Claims expensesGross and lossnet ratiosclaims expenses'''

* Gross claims expenses for insurance claims decreased by EUR 39.4m YoY to EUR 1,006.0m (prior: EUR 1,045.4m) YoY.

* ThisGross wascurrent primarilyyear dueclaims toexpenses adecreased by EUR 172.4m decrease in gross current year expenses to EUR 1,071.8m (prior: EUR 1,244.1m), drivendue byto a reduction in frequency claims, especiallyprimarily in the motor insurance segment.

* Increased expenses for large claims, particularlymainly in motor and multi-risk linessegments, were largely offset by lowerdecreasing expenses from natural catastrophes, especiallyparticularly in comprehensive and building insurance.

* Gross run-off gain decreased by EUR 133.0m to EUR 65.8m (prior: EUR 198.7m), mainly in liability and motor liability linessegments due to reserve adjustments for prior year claims.

* Gross total loss ratio decreased by 1.7pts YoY to 64.5% (prior: 66.2%) YoY.

* Net claims expenses for insurance claims decreased by EUR 46.3m to EUR 996.0m (prior: EUR 1,042.3m).

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'''Operating expenses and combinedcost ratioratios'''

* Gross operating expenses for insurance business decreased by EUR 20.3m to EUR 486.4m (prior: EUR 506.7m).

* Administration costs significantly decreased due to the success of the SBSTNZ strategic program and a special write-down in the priorprevious year.

* Net operating expenses for insurance business decreased by EUR 19.0m to EUR 477.3m (prior: EUR 496.2m).

* DespiteGross lower premium levels, the gross expensecost ratio slightly decreased to 31.2% (prior: 32.1%) anddespite thelower netpremium expense ratio to 32.0% (prior: 33.0%)levels.

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* Net technical result after fluctuation reserve improved by EUR 50.8m to EUR 20.1m (prior: -EUR -30.7m).

==== Insurance business ====

===== Self-concluded insurance business =====

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==== Motor insurance ====

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! colspan="5"| style="text-align:left" | In %

| style="text-align:left" | Combined ratioloss /

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'''Motor insurance premiums and claimsperformance'''

* This decline was primarily drivendue byto portfolio reductions following the application of the premium adjustment clauseclauses and the discontinuationcessation of new business in selected sales channels.

* This reduction was duedriven toby a decrease in gross current year claims expenses by EUR 148.4m to EUR 428.5m (prior: EUR 576.9m).

* Drivers for theThe decrease in gross current year claims expenses includedwas due to lower frequency claims and the absence of cumulative expenses for natural catastrophe claimscatastrophes.

* Conversely, the gross run-off gain decreased by EUR 32.1m to EUR 62.2m (prior: EUR 94.3m), resulting from necessary reserve adjustments in the motor liability divisioninsurance.

* The net underwriting result forOverall, the Motor insurance division wasreported a net technical result of EUR -2.6m (prior: EUR -39.0m).

==== Liability insurance ====

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! style="text-align:left" | In EUR million

! class="col-s" style="text-align:right" | 2025 Gross

! class="col-s" style="text-align:right" | 2025 Net

! class="col-s" style="text-align:right" | 2024 Gross

! class="col-s" style="text-align:right" | 2024 Net

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'''Liability insurance gross and net premiumsperformance'''

* [[Definition:Gross written premiums|Gross written premiums]] forin liability insurance decreased by EUR 2.2m to EUR 355.1m (prior: EUR 357.2m).

* The corporate division's business liability segment showed positive effects on [[Definition:Gross written premiums|gross written premiums]] from continuedsustained portfolio growth.

* Premiums forin the liberal professions' medical liability segment remained stable with slightly growingslight portfolio growth.

* Premiums in the private liability, planning liability, and financial loss liability insurance segments slightly declined, following portfolio development.

* EarnedNet netearned premiums decreased by EUR 4.4m to EUR 349.7m (prior: EUR 354.0m).

* This increase was due to a decrease in gross settlement results by EUR 92.0m to -EUR -55.8m (prior: EUR 36.2m), resulting from necessary reserve adjustments for major claims from older years and an increase in the late claimclaims reservesreserve.

* Gross claims expenses for the financial year rose to EUR 221.6m (prior: EUR 218.8m), particularly in the corporate division's business liability segment, following portfolio development.

* The gross loss ratio increased by 27.3pts3 percentage points to 78.4% (prior: 51.1%).

* ThisThe increase in net expenses was primarily due to the decrease in net settlement results to -EUR -46.3m (prior: EUR 41.7m), analogous to the gross figures.

* The net loss ratio increased by 26.6pts6 percentage points to 76.6% (prior: 50.0%).

* ExpensesGross and net expenses for insurance operations decreased both gross and net to EUR 131.5m (prior: EUR 137.9m) due to lower administrative costs, mainlyespecially after considering a special write-down in the previous year.

* The gross cost ratio slightly decreased to 37.2% (prior: 38.6%) and the net cost ratio to 37.6% (prior: 38.9%).

* Combined loss and expense ratios increased gross to 115.5% gross (prior: 89.6%) and net to 114.2% net (prior: 89.0%).

==== Accident insurance ====

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! style="text-align:left" | In EUR million

! class="col-s" style="text-align:right" | 2025 Gross

! class="col-s" style="text-align:right" | 2025 Net

! class="col-s" style="text-align:right" | 2024 Gross

! class="col-s" style="text-align:right" | 2024 Net

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* The decrease in [[Definition:Gross written premiums|gross written premiums]] was due to a slight decline in the number of insurance contractspolicies in the portfolioforce.

* This increase was due to higher currentfinancial year expenses resulting from increased large loss burdens, both gross and net, to EUR 46.9m (prior: EUR 42.8m).

* GrossThe gross and net settlement resultsresult increased to EUR 17.1m (prior: EUR 16.2m).

* GrossThe gross and net loss ratios increased to 49.2% (prior: 42.7%).

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* Gross and net operating expenses for insurance operationsbusiness decreased by EUR 1.2m to EUR 22.3m (prior: EUR 23.5m).

* Despite the slightly declining premium development, this led to a decrease in the gross and net expense ratios decreased to 36.8% (prior: 37.7%).

* GrossThe combined gross and net combinedloss/expense ratios increased to 86.0% (prior: 80.4%).

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* The accident insurance segment achieved a net technical insuranceunderwriting result of EUR 14.6m (prior: EUR 15.8m) after the fluctuation reserve.

==== Multi-risk Risk ====

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|+ Multi Risk-risk

! style="text-align:left" | In EUR million

! class="col-s" style="text-align:right" | 2025 Gross

! class="col-s" style="text-align:right" | 2025 Net

! class="col-s" style="text-align:right" | 2024 Gross

! class="col-s" style="text-align:right" | 2024 Net

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'''Multi-risk Risksegment premiums and claimsperformance'''

* [[Definition:Gross written premiums|Gross written premiums]] forin Multi Risk increased by EUR 1.6m to EUR 168.1m (prior: EUR 166.5m).

* Premium adjustments contributedhad positivelya topositive effect on premium growth.

* Reinsurance premiums decreased by EUR 5.3m to EUR 20.0m (prior: EUR 25.3m), mainly due to lower payable reinsurance costs, mainly from a reduction in the reinstatementreplenishment premium reserve.

* Net earned premiums increasedrose by EUR 7.0m to EUR 148.0m (prior: EUR 141.0m).

* Gross claims expenses for insurance benefits increased by EUR 23.6m to EUR 116.2m (prior: EUR 92.6m).

* This increase was primarilydriven due toby a EUR 30.7m decrease in gross run-off gains of EUR 30.7m to EUR 3.3m (prior: EUR 34.0m), following exceptionally high run-off gains from reserve reductions for major claims in the previous year.

* Offsetting thisConversely, current year claims expenses decreased by EUR 7.1m to EUR 119.5m (prior: EUR 126.6m) due to the absence of accumulation claimsexpenses, which more than compensatedovercompensated for the increased burden from major claims.

* Net claims expenses increasedfor insurance benefits rose by EUR 17.3m to EUR 117.2m (prior: EUR 100.0m).

* CombinedThe combined ratios reflected these developments, with gross at 107.0% (prior: 94.6%) and net at 119.9% (prior: 114.4%), both higher than the previous year.

==== Combined residential building insurance ====

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! style="text-align:left" | In EUR million

! class="col-s" style="text-align:right" | 2025 Gross

! class="col-s" style="text-align:right" | 2025 Net

! class="col-s" style="text-align:right" | 2024 Gross

! class="col-s" style="text-align:right" | 2024 Net

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* This decrease was due to lower claims expenses for the financial year of EUR 89.0m (prior: EUR 101.8m), primarily from reduceddeclining frequency claims and no cumulativeaccumulation claims fromof natural catastrophescatastrophe claims.

* The gross settlement result improved by EUR 16.3m YoY to EUR 15.0m (prior: -EUR -1.3m) duefollowing toreviews reserveof reviewsreserves from older accident years.

* The net settlement result increased by EUR 15.1m to EUR 14.0m (prior: -EUR -1.2m).

* The combined gross loss/costexpense ratio was 77.9% (prior: 98.5%).

* The combined net loss/costexpense ratio was 83.8% (prior: 107.4%).

* The net technicalunderwriting result improved by EUR 21.6m YoY to EUR 18.6m (prior: -EUR -3.0m) after the fluctuation reserve.

* EUR 1.5m was allocatedadded to the fluctuation reserve, following a withdrawal of EUR 12.6m in the previous year.

==== Combined household insurance ====

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* [[Definition:Gross written premiums|Gross written premiums]] in Combinedcombined Householdhousehold Insuranceinsurance decreased to EUR 72.4m (prior: EUR 75.2m) due to a decline in portfolio.

* Earned net premiums decreased accordingly to EUR 69.6m (prior: EUR 70.7m).

* This reduction was due to the absence of cumulative expenses from natural catastrophes and adeclining decreaseexpenses infor both frequency and large claims.

* The grosspremium lossand ratioclaims decreaseddevelopment byled to an 8.1 percentage pointspoint reduction in the gross loss ratio to 36.1% (prior: 44.2%).

* Net claims expenses for the financial year decreased by EUR 2.7m to EUR 32.9m (prior: EUR 35.6m), mirroringsimilar to the gross developmentfigures.

* The gross expensecost ratio decreasedreduced to 35.7% (prior: 36.3%).

* The net expensecost ratio decreasedreduced to 36.6% (prior: 38.1%).

* The grossGross combined ratio decreased from 80.5% to 71.8%.

* The netNet combined ratio decreased from 84.8% to 74.7%.

==== Other insurance ====

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! style="text-align:left" | In EUR million

! class="col-s" style="text-align:right" | 2025 Gross

! class="col-s" style="text-align:right" | 2025 Net

! class="col-s" style="text-align:right" | 2024 Gross

! class="col-s" style="text-align:right" | 2024 Net

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'''Other Insuranceinsurance Lineslines Performanceperformance'''

* Other insurance lines include fire insurance, transport insurance, assistance insurance, cyber insurance, and technical insurance.

* The main driver for gross premium growth was the Fire segment due to an internal portfolio transfer from the Residentialresidential Buildingsbuilding segment and additional premiums from contract renewals.

* The Cyber segment also showed positive development due to portfolio growth from new business.

* Technical Insurance and Transport Insurance segments experiencedshowed a slight premium increase YoY.

* Reinsurance premiums increased by EUR 5.9m to EUR 26.2m (prior: EUR 20.2m), consistent with gross premiums due to the internal portfolio transfer, mirroring gross premiums.

* Gross claims expenses for insurance claims decreased by EUR 8.8m to EUR 115.9m (prior: EUR 124.7m) YoY.

* The decrease in gross claims expenses was driven by an EUR 8.2m reduction in gross current year claims expenses to EUR 133.3m (prior: EUR 141.5m), primarily due to the absence of natural catastrophe accumulation expenses and a decline in large claims in the Fire segment.

* The gross loss ratio for other insurance lines decreased by 16.1pts1 percentage points to 52.8% (prior: 68.8%).

* Net claims expenses for insurance claims decreased by EUR 6.4m to EUR 115.7m (prior: EUR 122.1m).

* This reduction was partly driven by a EUR 6.8m decrease in net current year claims expenses of EUR 6.8m to EUR 130.0m (prior: EUR 136.8m).

* Gross operating expenses increased to EUR 81.8m (prior: EUR 70.5m) and net operating expenses increased to EUR 78.4m (prior: EUR 65.5m).

* The combined gross ratio improved to 90.0% gross (prior: 107.7%) and 100.5% net (prior: 116.5%).

==== Investment result ====

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'''Investment income and expensesresults'''

* Current income, primarily from coupon payments on fixed-income investments, was EUR 95.9m (prior year: EUR 118.7m).

* Distributions from equity funds were significantly lower at EUR 1.3m (prior year: EUR 20.0m) YoY, due to the sale of all equity holdings in the previous year.

* The asset class "shares in affiliated companies and participations" contributed EUR 4.3m (prior year: EUR 17.2m) to the result.

* Slightly higher income was generated in directly held fixed-income directasset investmentsclasses due to an increased reinvestment rate for the full year.

* Current expenses (including scheduled depreciation) amounted to EUR 8.1m (prior year: EUR 7.5m).

* Current result was EUR 87.8m (prior year: EUR 111.3m).

* A currentAn average yieldcurrent return{{fn ref|1}} of 3.0% (prior year: 3.0%) was achieved for the full year.

{{chunk|doc=9fth4kgfqj|c=6859|p=18}}

'''Other income and expensesresult'''

* Other incomeresult: EUR 122.2m (prior: EUR -62.5m)

* Other income included [[Definition:Other revenue|other revenues]] of EUR 144.8m (prior: EUR 18.2m) and other expenses of EUR 22.6m (prior: EUR 80.7m)

* ExpensesOther for the company as a whole accounted forexpenses: EUR 1722.8m6m (prior: EUR 7780.4m7m) of other expenses

* LossesTalanx wereAG offset bythese losses with an income-effective subsidy of EUR 132.7m from Talanx AG

* This income was reported in the other incomeresult

{{chunk|doc=9fth4kgfqj|c=6960|p=18}}

{{chunk|doc=9fth4kgfqj|c=7061|p=18}}

{{fn note|1=2|2=AlleAll Erträgeincome abzüglichless allerall Aufwendungenexpenses fürfor Kapitalanlageninvestments imin Verhältnisrelation zumto mittlerenthe Bestandaverage derinvestment Kapitalanlagenportfolio zumas of 1.1. undand 31.12. desof the respective jeweiligenfiscal Geschäftsjahresyear}}

==== Total comprehensive income of HDI Versicherung AG ====

{{chunk|doc=9fth4kgfqj|c=7162|p=18}}

! style="text-align:left" | In EUR million

| style="text-align:left" | InTechnical EURresult millionf. e. R.

{{chunk|doc=9fth4kgfqj|c=7263|p=18}}

* Due to the existing control and profit transfer agreement, aA profit of EUR 109.5m (prior year: EUR 17.6m) was transferred to the parent company, HDI Deutschland AG, indue to the fiscalexisting control yearand profit transfer agreement.

==== Financial position ====

===== Shareholders' equity =====

{{chunk|doc=9fth4kgfqj|c=7364|p=18}}

* Equity remained unchanged YoY at: EUR 57.1m. (unchanged YoY)

===== Liquidity position =====

{{chunk|doc=9fth4kgfqj|c=7465|p=18}}

* Liquidity required to meetfor current payment obligations is ensured by ongoing liquidity planning, which considers the expected liquidity development for the next twelve months.

* LiquidAs of the balance sheet date, liquid funds in the form of deposits and current balances with credit institutions totaledamounted to EUR 88.1m (prior: EUR 51.3m) at the balance sheet date.

===== Asset situationposition =====

====== Investments ======

{{chunk|doc=9fth4kgfqj|c=7566|p=18}}

* Investments were primarily in fixed-income securities held directly, accounting for 66.7% (prior year: 70.9%) of total investments at the end of 2025.

* Equity funds were continuously built up againrebuilt after a reduction at the beginning of 2025, reaching approximately EUR 39.8m (prior year: EUR 147.8m) at year-end.

* Technical provisions, (net), increased by EUR 83.7m to EUR 3,761.9m (prior: EUR 3,678.1m).

* Net provisions for outstanding claims are almostlargely unaffected by exchange ratecurrency fluctuations because HDI Versicherung AG operates exclusively in the German market.

==== Overall statement on the economic situation ====

{{chunk|doc=9fth4kgfqj|c=7869|p=19}}

'''Operating performance and net resultpremium volume'''

* [[Definition:Net written premiums|Net written premiums]] for the company sawshowed a slight decline.

* An increase inincreased net burden from large claims was offset by a decrease in claims expenses for natural catastrophes in motor and propertybuilding lines due to the absence of cumulative events.

* This increase was due to positive operationaloperating development and a higher withdrawal from fluctuation reserves compared to the previous year.

* The company's net premium volume developeddeclined slightly negatively YoY, as expected.

* ThisThe wasmain primarilydriver drivenfor bylower anet decreaseclaims inexpenses currentwas yearthe decrease in claims expenses duefor tothe lowerbusiness year, resulting from reduced frequency claims expenses in motor and private lines.

* A decrease in claims expenses for natural catastrophes in motor and propertybuilding lines due to the absence of cumulative events was offset by an increase in the burden from large claims burden.

* Claims settlement developed negatively due to increased expenses for necessary reserve adjustments for large claims from previous years, especiallyparticularly in corporate and freelance professional lines.

{{chunk|doc=9fth4kgfqj|c=7970|p=19}}

===== Summary of the risk situation =====

{{chunk|doc=9fth4kgfqj|c=8071|p=20}}

* The company's risk management regularly examines risks to the company.

* Established risk management systems and control bodies support early identification, assessment, and management of risks that could significantly impact the company's earnings, financial position, and asset situationposition.

* Risks threatening the company's existence, specifically (material risks with existential loss potential,) could arise from systemic risks, such as a collapse of the financial system.

{{chunk|doc=9fth4kgfqj|c=8172|p=20}}

* The company's risk profile is strongly characterizedinfluenced by underwriting risks and market risks.

* KeySignificant risk-relevant influencing factors in the reporting year include the continued subdued overall economic situation in Germany.

* SubstantialVarious challengeslegal and risks canrequirements continue to arisepose fromsubstantial variouschallenges legaland requirementsrisks.

{{chunk|doc=9fth4kgfqj|c=8273|p=20}}

'''Strategic measures and capitalregulatory requirementscapital'''

* Intensive strategic considerations and measures in the reporting year created the conditions for focused capital build-upaccumulation to strengthen risk resilience.

* The company meets the supervisoryregulatory capital requirements.

* Specific capital ratios will be published in April [[Definition:Year 2026|2026]] in the Solvency and Financial Condition Report (SFCR) for December 31, 2025.

{{chunk|doc=9fth4kgfqj|c=8374|p=20}}

'''Risk management compliance and reporting'''

* The company's risk management fulfills the requirements of the German Stock Corporation Act (§ 91 paraAbs. 2 AktG).

* This report fulfills the company's obligation to report on the significant risks of its prospective development (§ 289 paraAbs. 1 HGB).

{{chunk|doc=9fth4kgfqj|c=8475|p=20}}

'''Risk Managementmanagement Systemstrategy Overviewand system'''

* The basis of risk management is thebased riskon strategy,an annually approved annuallyrisk strategy by the Management Board, derived from the business strategy.

* The risk strategy is a binding, integral componentpart of corporatebusiness actionsoperations.

* Risk understanding is holistic, encompassingcovering opportunities and risks, with a focus on negative target deviations (and risks in the narrower sense).

* The company's risk management is integrated into the risk management of the HDI GermanyDeutschland [[Definition:Business mix|business unit]] and the Group, adheringand toconsiders Group guidelines.

* A supervisory-approved Internal Model according to Solvency II is used for risk quantification, with a one-calendar-year time horizon.

{{chunk|doc=9fth4kgfqj|c=8576|p=20}}

'''Risk Assessmentassessment and Monitoringmonitoring'''

* Strategic risks, project risks, reputationalreputation risks, and emerging risks resulting from target deviations are also considered.

* The company conducts an Own Risk and Solvency Assessment (ORSA) at least annually, aswhich areviews keythe partoverall ofsolvency itsneeds riskconsidering managementthe company's specific risk systemprofile.

{{chunk|doc=9fth4kgfqj|c=8677|p=2021}}

'''Investment Risk Managementorganization and future risks'''

* This outsourcing bundles know-how and ensures efficient resource utilization; anAn outsourcing officer within the company monitors thisthe outsourcing.

* This task is performed by the Chief Risk Officer with support from risk management and the Risk Committee of the HDI Deutschland [[Definition:Business mix|business unit]], which makes recommendations to the Management Board.

* The Actuarial Function contributes to the effective implementation of the risk management system and risk and solvency assessment within its legal duties, particularly regarding the calculation of technical provisions, underwriting and acceptance policy, and the adequacy of reinsurance arrangementsagreements.

* The Internal Audit, Compliance, and the Actuarial FunctionsFunction are also outsourced to HDI AG.

====== PremiumReserve risks ======

{{chunk|doc=9fth4kgfqj|c=9078|p=2122}}

* Reserve risk is the danger that technical provisions are insufficient to fully settle claims that have already occurred but are not yet settled or known but have already occurred, potentially leading to a need for additional reserves.

* The level of provisions is regularly reviewed by internal and external actuaries, who providewith reserve reports provided to the company.

* ToRisk controlmanagement and reducereduction risks,also the company primarily usesinvolve claims analyses, natural catastrophe modeling, selective underwriting, and regular monitoring of claims development.

==== Lapse risks ====

{{chunk|doc=9fth4kgfqj|c=9279|p=22}}

* The company regularly analyzes the lapse situation and takesimplements appropriate control measures ifas necessaryneeded.

=== Market risks ===

{{chunk|doc=9fth4kgfqj|c=9380|p=22}}

'''Market risk definition and management'''

* Market risk is defined as the danger arising from fluctuations in the levelamount or volatility of financial market data, thatwhich affectaffects the value of assets and liabilities.

* These guidelines are based on legal and regulatorysupervisory requirements, as well as the company's internal policies, to ensure maximum security and profitability with constant liquidity, while maintaining an appropriate mix and diversification.

* Parametric stress tests are calculated as part of the monthly reporting to determine thehow sensitivity ofsensitively the portfolio reacts to significant changes in market data.

==== Equity and participation risks ====

{{chunk|doc=9fth4kgfqj|c=9481|p=22}}

* Equity risk refers to the risk arising from changes in stockequity price levels.

* Potential changes in stockequity price levels affect the valuation of equities and asset positions modeled as equities in the risk model, particularly any companyinvestments holdingsheld by the company.

* A sensitivity analysis below shows percentage changes in the market value of investments for a hypothetical loss/gain in equity investments, (calculated as of the balance sheet date).

{{chunk|doc=9fth4kgfqj|c=9582|p=22}}

|+ AssumedPercentage change in equitymarket value of investments by percentageassumed change in market value ofequity investments

! class="col-s" style="text-align:right" | -10 %

! class="col-s" style="text-align:right" | +10 %

| style="text-align:right" | -0.1 %

| style="text-align:right" | 0.1 %

==== Interest rate risks ====

{{chunk|doc=9fth4kgfqj|c=9683|p=22}}

* Interest rate risk is managed through regular assetAsset-liabilityLiability analyses, continuous monitoring of investments and capital markets, and implementation of appropriate measures.

* AThe sensitivityfollowing analysissection provides percentage changes in the market value of investments for a hypothetical decrease/increase in interest rates (parallel shift of the interest rate curve, calculated at the balance sheet date) as part of a sensitivity analysis.

{{chunk|doc=9fth4kgfqj|c=9784|p=22}}

| style="text-align:right" | 2.1 %

| style="text-align:right" | -2.0 %

===== Currency risks =====

{{chunk|doc=9fth4kgfqj|c=9885|p=23}}

'''Currency risk exposuremanagement'''

* Currency risk, defined describesas the sensitivity of assets, liabilities, and financial instruments to changes in theexchange rate levellevels or volatility, ofplays exchangea minor role for the ratescompany.

* Currency risk plays a minor role for theThe company's becausecapital investments are almost exclusively madedenominated in Euroseuros.

===== Real estate risks =====

{{chunk|doc=9fth4kgfqj|c=9986|p=23}}

'''Real estate investment risk management and sensitivity'''

* Real estate risk refersis todefined as the risk offrom fluctuations in the value of real estate held in investments.

* For direct real estate investments, yield and other key performance indicators (e.g., vacancies or arrears) are regularly measured at the objectproperty and portfolio levellevels.

* A sensitivity analysis shows the percentage changes in the market value of investments given a hypothetical loss in value of real estate investments (calculated as ofat the balance sheet date).

* Credit risks describe the risks of loss or adverse changes in financial position resulting from fluctuations in the creditworthiness of securitysecurities issuers, counterparties, and other debtors against whom the company has claims.

* TheseCredit risks manifest as counterparty default risks, spread risks, or market risk concentrations.

* Credit risks below investment grade and without a rating are only entered intoundertaken to a limited extent.

* KeyRatings indicators for investment decisions by portfolio management are the rating classes assigned byfrom external agencies such as Standard & Poor's, Moody's, Fitch, or Scope Analysis are key indicators for investment decisions by portfolio management.

{{chunk|doc=9fth4kgfqj|c=10288|p=23}}

* Management of these risks involves careful due diligence checks in advance and ongoing monitoring measures.

===== Derivatives and structured products =====

{{chunk|doc=9fth4kgfqj|c=10689|p=23}}

* Derivative transactions are conducted within the company's internal guidelines for yield enhancement, acquisition preparation, and portfolio hedging, ofas portfolioswell as structured product transactions, are conducted within the company's internal guidelines.

* Derivatives are efficient and flexible instruments for portfolio management instruments due to their low transaction costs, high market liquidity, and transparency.

{{chunk|doc=9fth4kgfqj|c=10790|p=24}}

* The company's inflation -swap portfolio (Inflationinflation Receiversreceivers) was further expanded to hedge against inflation risk.

* Value at Risk (VaR) is a key elementused forto managingmonitor market risks, representing the maximum expected loss within a defined period at a given probability, measured as a percentage of the market values of the investments.

* Information on default risks in capital investments is found under credit risks.

* RisksThe fromrisk of default ofon claims against reinsurers involveis the possibility of default on reinsurers' shares of insurance liabilities, minus reinsurance deposits or other collateral.

* TheDefault risk of default on claims from reinsurance business is low due to the favorable credit assessment of reinsurance partners.

* Claims against reinsurers amounted to EUR 1.7m (prior: EUR 14.6m) atas of the balance sheet date.

* RisksThe fromrisk of default ofon claims against insurance intermediaries and policyholders primarily involveinvolves the possibility that commission clawbacks may not be sufficiently valuable in the event of increased policy cancellations.

* The company addresses this risk bythrough intensivelyintensive monitoring theof intermediary creditworthiness of intermediaries using a detailed control system.

* Liquidity risk refers tois the risk that the company cannot realize investments and other assets to meet its financial obligations at maturity, potentially due to illiquid markets or price discounts.

* Compliance risks include legal risks and risks from changes in legislation, including changes in tax legislation and statutory reporting requirementsobligations.

{{chunk|doc=9fth4kgfqj|c=11390|p=26|cont=1}}

* Compliance risks in sales are regularly monitored, also with regard to the GDV Code of Conduct for Sales, for which a Compliance Steering Committee HDI Germany has been established.

{{chunk|doc=9fth4kgfqj|c=11491|p=26}}

'''Fraud Risk ManagementDefinition and Mitigation'''

* Fraud risks involveinclude the risk of intentional violation of laws or rules by internal employees (internal fraud risks) and/or by third parties (external fraud risks) to gain personal advantage.

* Fraud risks are understoodbroadly indefined ato broader sense, includinginclude not only fraud but also other property offenses.

* The company addresses the risk of fraudulent acts through regulations and internal controls in thewithin departments.

* Internal Audit reviews systems, processes, and individual cases throughoutacross the company.

{{chunk|doc=9fth4kgfqj|c=11592|p=26}}

* The company mitigatesprioritizes personneltraining risksand throughprofessional trainingdevelopment andto continuingmitigate educationpersonnel risks.

* Employees can adapt to current market demandsrequirements viathrough individual development plans and appropriate qualification programs.

* Modern management tools and appropriateadequate monetary and non-monetary incentive systems promote high employee commitment.

* Measures for employee health promotion, process documentation, and substitutionrepresentation rules also helpcontribute reduceto reducing personnel risks.

{{chunk|doc=9fth4kgfqj|c=11693|p=26}}

'''Information and IT securitySecurity risksRisks'''

* IT security risk includes cyber securitycybersecurity risk.

* A protective firewall technology is installed for connecting internal and external network connectionsnetworks, which is regularly reviewed and continuously developed.

{{chunk|doc=9fth4kgfqj|c=11794|p=26}}

'''Outsourcing risksrisk management'''

* Outsourcing risks arerefer defined asto risks arising from outsourcing functions or insurance activities, either directly or through further outsourcing, that could otherwise be performed by the company itself.

* Outsourcing risks are differentiated by the externalizationoutsourcing of tasks up to sales and the externalizationoutsourcing of sales services.

* Risks from outsourced functions or services are integrated into the risk management process, includingand identificationare identified, assessmentevaluated, controlmanaged, and monitoringmonitored, even forif intra-groupthe servicesservice is provided within the group.

* Initial risk analyses are conducted before outsourcing activities or /areas.

* The company contractually secures necessary information and instruction rights from the service providersprovider, allowing the Management Board to issue individual instructions at any time and influence outsourced areas.

===== ICT risks =====

{{chunk|doc=9fth4kgfqj|c=11895|p=27}}

'''ICT Riskrisk Managementmanagement'''

* ICT risks manifest as operational risks withacross various subcategories.

* An ICT risk control function was established in the reporting year withinin the context of the EU Digital Operational Resilience Act (DORA).

* ThisThe Group Security function isperforms performedthe byICT Grouprisk Securitycontrol function for the company.

===== Other materialsignificant risks =====

{{chunk|doc=9fth4kgfqj|c=11996|p=27}}

'''otherOther materialsignificant risks'''

====== Strategic risks ======

{{chunk|doc=9fth4kgfqj|c=12097|p=27}}

'''Strategic risks management'''

* Strategic risks describeare defined as risks arising from strategic business decisions.

* Strategic risk alsoThis includes the risk that business decisions are not adapted to a changed economic environment.

* Strategic risks are addressed within thethrough planning and control processes.

* Intensive strategic work in the reporting year createdestablished the conditions for focused organic growth.

====== Project risks ======

{{chunk|doc=9fth4kgfqj|c=12198|p=27}}

'''Project risks and management'''

* Project risks and their effects are systematically recordedidentified as part ofwithin project management.

* The company uses established processes and measures tofor controlcontrolling and manage bothmanaging the project portfolio and individual projects.

====== Reputation risks ======

{{chunk|doc=9fth4kgfqj|c=12299|p=27}}

'''Reputationreputation risk management'''

* TheseReputation risks are closely monitored.

* The risk of reputation damage is limited by quality requirements for products, continuous quality management of keyessential business processes, anti-money laundering measures, and strict data protection and compliance guidelines.

* Crisis communication management proceduresis are establishedregulated.

====== Emerging Risks ======

{{chunk|doc=9fth4kgfqj|c=123100|p=27}}

'''Emerging Risksrisks identificationdefinition and management'''

* Emerging Risks are potential threats or hazards resulting from new, changing, complex, or uncertain developments or factors that are changing, complex, or uncertain, difficult to predict, or hard to assess.

* TheseEmerging risksRisks often stem from trends or structural long-term structural developments withthat can have indirect impacts on the political, social, technological, ecological, and/or economic environmentsenvironment.

* The findingsresults and insights from the Emerging Risk process are integratedincorporated into risk reporting and the risk management process to enable early detection of potential vulnerabilities and, if necessary, mitigation through risk reduction measures.

====== Sustainability risks ======

{{chunk|doc=9fth4kgfqj|c=124101|p=27}}

'''Sustainability risks definition and managementoverview'''

* Sustainability risks are events or conditions from the Environment, Social, or Governance (ESG) areas that can have significant negative actual or potential significant negative impacts on the earnings, financial position, and asset situation, andas well as the reputation of the company.

* ThisThese includesrisks include climate-related risks such as physical risks and transition risks associated with transformation processes, as well as risks of potential greenwashing allegations.

* Sustainability risks can materialize as a meta-risk across all risk categories, so the company monitors these risks within its risk management system.

=== Forecast and opportunityOpportunity reportReport ===

{{chunk|doc=9fth4kgfqj|c=125102|p=28}}

* The following statements are based on expert assessments from third parties and on theplans company'sand ownforecasts planningconsidered andconclusive forecastsby the company, whichbut arerepresent considereda conclusivesubjective assessment.

==== Economic conditionsEnvironment ====

{{chunk|doc=9fth4kgfqj|c=126103|p=28}}

* ThisGlobal trendeconomic growth is expected to continue this trend in [[Definition:Year 2026|2026]], with global economic growtha projectedforecast atof +2.7% YoY.

* Stable growth is supported by the delayed effect of central banks nearing the end ofbank interest rate cuttingcut cycles and sustainedpersistently high/ or rising fiscal stimulus.

* In the Eurozone, higher fiscal stimulus, particularly increasedrising government investments in infrastructure and defense in Germany, is expected to slightly accelerate growth dynamics during the year.

* External trade in the Eurozone faces [[Definition:Headwind|headwinds]] from global trade reordering, including weak exports and rising (cheapercheap) imports from China due to trade diversion away from the US.

* This trade diversion, along with lowerLower energy prices YoY and a stronger Euro, isalongside increased imports from China, are expected to contribute to a further declinedeclining inflation rate in the Eurozone's inflation rate.

* Consumer restraint amongin lower and middle-income households in the US, due to a weaker labor market weakness and increased pricesprice levels (partly tariff-related), may be partially offset by wealthy households, but no further acceleration is expected.

* Investments in AI are expected to continue providing tailwinds in the US, though it remains to be seen if theannounced high investmentinvestments announcementsby from majorlarge tech companies fully materialize.

* Very expansive fiscal policy, including tax cuts, should also provide support in the US economy.

* A significant increase in the US unemployment rate in [[Definition:Year 2026|2026]] is expected to be avoided bydue to a simultaneously lower labor supply (less migration).

* The US inflation rate is expected to reach its tariff-related peak by mid-year due to tariffs, but will exceed the Fed's 2% target on average for the sixth consecutive year on average.

{{chunk|doc=9fth4kgfqj|c=127104|p=28}}

'''Downside risks to globalGlobal economic outlookrisks'''

* RisksUpside risks to the global economic outlook are predominantly on the downside, despite potential upside risks such asinclude stronger fiscal support, a possiblepotential ceasefire in the war in Ukraine, or an AI-driven productivity boost.

* Increased politicization of the Fed, combined with the sharply risenincreased US national debt, could lead to a serious crisis of confidence with repercussions foron international capital markets.

* A potential AI crash is another risk; if confidence in the technology and its potential returns wanes given the immense capital requirements, it could worsen investment activity in the sector and the overall investment climate.

* The sustainability of high government debt outside the US is alsoremains a recurring concernquestion.

* Various structuralStructural risks, includinginclude climate change, demographic developments, and de-globalization, which could increase inflation risk in the medium term and promptlead central banks to adopt a sustainably more restrictive monetary policy.

==== Capital markets ====

{{chunk|doc=9fth4kgfqj|c=128106|p=2829}}

'''InterestBond rateyields and bondequity yieldmarket forecastsoutlook'''

==== Future industryIndustry situationSituation ====

{{chunk|doc=9fth4kgfqj|c=129107|p=29}}

* The macroeconomic environment continues to be characterized by significant risk factors and uncertainty, affecting both national and international insurance markets.

===== German insuranceInsurance industryIndustry =====

{{chunk|doc=9fth4kgfqj|c=130108|p=29}}

* The German insurance market is expected to continue growing untilin [[Definition:Year 2026|2026]], but with less momentum compared to the strong premium growth in the past fiscal year.

====== Property and Casualty Insurance ======

{{chunk|doc=9fth4kgfqj|c=131109|p=29}}

* For [[Definition:Year 2026|2026]], the German [[Definition:Property & casualty|P&C]] insurance segment expects slight follow-up effects are expected in sum insured and premium adjustments, drivenin byGerman cost[[Definition:Property increases& andcasualty|P&C]] inflation from recent yearsinsurance.

==== Opportunities from the developmentDevelopment of frameworkthe conditionsFramework Conditions ====

{{chunk|doc=9fth4kgfqj|c=132110|p=29}}

'''Digitalization strategydigitalization and AI implementationstrategy'''

* Digitalization is reshapingsignificantly changing the insurance industry by redesigningreshaping business processes and models through digital technologies.

* This development is crucial for the competitiveness of insurance companies, creating new opportunities in customer communication, claims processing, data analysis, and new business development.

* The AI Act aims to regulate AIthe development and use of AI in the EU, protect fundamental rights, buildstrengthen trust in the technology, and fosterpromote innovation through clear guidelines.

* Faster-than-expected implementation and customer adoption of digitalization projects could positively impact premium development and earnings, potentially leading to exceeding current forecasts.

===== Knowledge managementManagement =====

{{chunk|doc=9fth4kgfqj|c=133111|p=29}}

'''Knowledgeknowledge and innovation management'''

* Knowledge and innovation management are increasinglygaining importantimportance in the insurance industry.

* International experts in Excellence Teams exchange viewsideas on specialistspecialized topics and jointly develop new solutions, including pricing, sales, marketing, claims, fraud management, customer service centers, and digitalization.

* GeneratingFaster generation and implementingimplementation of new solutions and ideas faster than expected through the Best Practice Lab could positively impact premium development and earnings, potentially exceeding forecasts.

{{chunk|doc=9fth4kgfqj|c=134112|p=29}}

* The globalized world in the information age is characterized by increasing speed of change, volatility, uncertainty, complexity, and ambiguity (VUCA).

* To keep pace with the speed of change, an insurance companyHDI needsVersicherung tois transformtransforming into an agile organization.

* An agile organization for the companyHDI means being a learning organization focused on customer benefit to increase company profit.

* TheHDI company relies onuses interdisciplinary and creative teams, open and direct communication, flat hierarchies, and a culture that embraces mistakes.

* Numerous initiativesInitiatives support the company's transformationshift to an agile organization by shortening communication channels and fostering cross-departmental exchange.

* Customers benefit from new, tailored insurance solutions tailored to their needs.

* Employees gain more influenceautonomy and growth opportunities through agile work.

* A significant increase in investment income is anticipated, driven by a risinghigher extraordinary [[Definition:Net investment income|investment result]] afterfollowing loss realizations in the current reporting year.

==== Types of insuranceInsurance (Appendix 1 to the managementManagement reportReport) ====

{{chunk|doc=9fth4kgfqj|c=137114|p=31}}

'''Insurance types operated in 2025'''

* The following types of insurance were operated in the 2025 financial year as individual, group, or collective insurance policies against single or ongoing premiumscontributions: General liability insurance, Private liability insurance, Financial loss liability insurance, Cyber insurance, Medical professional liability insurance, Planning liability insurance, Motor vehicle liability insurance, Other motor vehicle insurance, General accident insurance, Multi-risk insurance, Transport insurance, Technical insurance, Fire insurance, Combined residential building insurance, Combined household contents insurance.

{{chunk|doc=9fth4kgfqj|c=138115|p=32}}

'''FinancialBrazil reportfinancial Brazilreport'''

{{chunk|doc=9fth4kgfqj|c=138115|p=33|cont=1}}

== Annual financialFinancial statementsStatements ==

{{chunk|doc=9fth4kgfqj|c=139116|p=33}}

=== Balance Sheet as of December 31, 2025 ===

{{chunk|doc=9fth4kgfqj|c=140117|p=34}}

{| id="t19" class="wikitable fintable"

! style="text-align:rightleft" |

! class="col-s" style="text-align:right" | 31.12.2024

| colspan="2" style="text-align:left" | ConcessionsAcquired concessions, industrial property rights and similar rights and values acquired for consideration, and licenses tofor such rights and values

| style="text-align:rightleft" | —

| colspan="2" style="text-align:left" | I. Land, rights equivalent to land, and buildings, including buildings on third-party land

| style="text-align:rightleft" | 0—

| colspan="2" style="text-align:left" | 1. Shares in affiliated companies

| style="text-align:rightleft" | 256,451

| colspan="2" style="text-align:left" | 2. Loans to affiliated companies

| style="text-align:rightleft" | 203,261

| colspan="2" style="text-align:left" | 3. Participations

| style="text-align:rightleft" | 1,964

| colspan="2" style="text-align:left" | 4. Loans to companies with which there is a participation relationship exists

| style="text-align:rightleft" | 19,939

| style="text-align:rightleft" | <strong>481,615</strong>

| style="text-align:right" | <strong>442,508</strong>

| colspan="2" style="text-align:left" | 1. Shares, units or shares in investment funds and other non-fixed-interestincome securities

| style="text-align:rightleft" | 772,675

| colspan="2" style="text-align:left" | 2. Bearer bonds and other fixed-interestincome securities

| style="text-align:rightleft" | 1,870,241

| colspan="2" style="text-align:left" | 3. Other loans

| style="text-align:rightleft" | —

| colspan="2" style="text-align:left" | ba) Promissory note receivables andRegistered loansbonds

| style="text-align:rightleft" | 165473,763581

| style="text-align:rightleft" | <strong>639,344</strong>

| style="text-align:right" | <strong>941,377</strong>

| style="text-align:rightleft" | <strong>3,282,259</strong>

| style="text-align:right" | <strong>3,318,087</strong>

| style="text-align:rightleft" | —

| style="text-align:left" | <strong>3,763,874</strong>

| style="text-align:right" | <strong>3,760,811</strong>

| colspan="2" style="text-align:left" | I. Receivables from direct insurance business from:

| style="text-align:rightleft" | —

| colspan="2" style="text-align:left" | 1. Policyholders

| style="text-align:rightleft" | 77,529

| colspan="2" style="text-align:left" | 2. Insurance intermediaries

| style="text-align:rightleft" | 7,194

| style="text-align:rightleft" | <strong>84,723</strong>

| style="text-align:right" | <strong>117,779</strong>

| colspan="2" style="text-align:left" | II. Settlement receivables from reinsurance business – thereof from affiliated companies: 292 TEUR (11,543 TEUR)

| style="text-align:rightleft" | 1,737—

| colspan="2" style="text-align:left" | III. Other receivables – thereof from affiliated companies: 147,670 TEUR (497,557 TEUR)

| style="text-align:rightleft" | 172,845—

| style="text-align:rightleft" | —

| style="text-align:left" | <strong>259,305</strong>

| style="text-align:right" | <strong>654,671</strong>

| colspan="2" style="text-align:left" | I. Current balances with credit institutions, checks and cash inon hand

| style="text-align:rightleft" | 88,055—

| style="text-align:rightleft" | —

| style="text-align:left" | <strong>88,055</strong>

| style="text-align:right" | <strong>51,289</strong>

| colspan="2" style="text-align:left" | I. Accrued interest and rents

| style="text-align:rightleft" | 36,129—

| colspan="2" style="text-align:left" | II. Other prepaid expenses and accrued income

| style="text-align:rightleft" | 1,345—

| style="text-align:rightleft" | —

| style="text-align:left" | <strong>37,475</strong>

| style="text-align:right" | <strong>32,601</strong>

| colspan="2" style="text-align:left" | F. DeferredActive tax assetdifference from asset offsettingnetting

| style="text-align:rightleft" | —

| colspan="2" style="text-align:left" | Total assetsAssets

| style="text-align:rightleft" | —

| style="text-align:left" | <strong>4,150,862</strong>—

| style="text-align:rightleft" | <strong>4,503150,332</strong>862

! colspan="5" style="text-align:left" | A. EquityShareholders' equity

| style="text-align:left" | —II. Capital reserves

| style="text-align:leftright" | —

| style="text-align:left" | —57,100

| style="text-align:right" | 57,100—

! colspan="5" style="text-align:left" | I. Unearned premiums

| style="text-align:leftright" | —

| style="text-align:left" | —224,341

| style="text-align:right" | 224,341—

! colspan="5" style="text-align:left" | II. Technical provisions for life insurance

| style="text-align:leftright" | —

| style="text-align:left" | —8,905

| style="text-align:right" | 8,905—

! colspan="5" style="text-align:left" | III. Provision for outstanding claims

| style="text-align:leftright" | —

| style="text-align:left" | —3,261,447

| style="text-align:right" | 3,261,447—

! colspan="5" style="text-align:left" | IV. Provision for premium refunds, profit-dependent and profit-independent

| style="text-align:leftright" | —

| style="text-align:left" | —900

| style="text-align:right" | 900—

| style="text-align:left" | —V. Equalization provision and similar provisions

| colspan="2" style="text-align:leftright" | V. Fluctuation reserves and similar provisions—

| style="text-align:rightleft" | 252,856

! colspan="5" style="text-align:left" | VI. Other technical provisions

| style="text-align:leftright" | —

| style="text-align:left" | —13,439

| style="text-align:right" | 13,439—

| style="text-align:leftright" | —

| style="text-align:left" | —I. Provisions for pensions and similar obligations

| colspan="2" style="text-align:leftright" | I. Provisions for pensions and similar obligations—

| style="text-align:rightleft" | 847

| style="text-align:left" | —II. Other provisions

| colspan="2" style="text-align:leftright" | II. Other provisions—

| style="text-align:rightleft" | 20,763

| style="text-align:leftright" | —

! colspan="5" style="text-align:left" | I. Liabilities from direct insurance business to

| style="text-align:leftright" | —

| style="text-align:left" | —113,897

| style="text-align:right" | 113,897—

| style="text-align:rightleft" | 22,634

| style="text-align:rightleft" | 173,294

| style="text-align:leftright" | —

! colspan="3"| style="text-align:left" | E. Prepaid expenses and accrued income

! class="col-s"| style="text-align:right" | 440—

! class="col-s"| style="text-align:rightleft" | 651—

! colspan="3" style="text-align:left" | Total liabilities

{{chunk|doc=9fth4kgfqj|c=141119|p=35}}

* PensionThe pension provision included in the balance sheet under liabilities B.III. infor the balanceend sheetof forthe fiscal2025 yearfinancial 2025year, including uncollected pensions, isamounts to EUR 63,698.

* The pension provision under liabilitiesitem B.III. of the liabilities in the balance sheet washas been calculated in accordance with § 341f and § 341g HGB, and the legal ordinance issued underpursuant to § 88 Abspara. 3 VAG.

! class="col-s" style="text-align:rightleft" | 2025

| style="text-align:rightleft" | —

| style="text-align:rightleft" | —

| style="text-align:left" | —

| style="text-align:rightleft" | —

| style="text-align:left" | c) Change in gross premiumunearned incomepremiums

| style="text-align:rightleft" | —

| style="text-align:left" | d) Change in reinsurers' share of gross premiumunearned incomepremiums

| style="text-align:rightleft" | —

| style="text-align:left" | —

| style="text-align:rightleft" | —

| style="text-align:rightleft" | 1,489,867

|! colspan="4" style="text-align:left" | 2. Technical interest income for own account

|! style="text-align:left" | —1,020

|! class="col-s" style="text-align:leftright" | —1,052

|! colspan="4" style="text-align:left" | 3. Other technical income for own account

|! style="text-align:left" | —360

|! class="col-s" style="text-align:leftright" | —1,679

| style="text-align:rightleft" | —

| style="text-align:rightleft" | —

| style="text-align:left" | —

| style="text-align:rightleft" | —

! colspan="6" style="text-align:left" | b) Change in provision for outstanding claims provision

| style="text-align:rightleft" | —

| style="text-align:rightleft" | —

| style="text-align:left" | —

| style="text-align:rightleft" | —

| style="text-align:rightleft" | -995,994

! colspan="6" style="text-align:left" | a) PremiumTechnical reserveprovisions for life insurance

| style="text-align:rightleft" | —

| style="text-align:rightleft" | —

| style="text-align:left" | —

| style="text-align:rightleft" | —

| style="text-align:rightleft" | —

| style="text-align:rightleft" | -1,025

|! colspan="4" style="text-align:left" | 6. Expenses for premium refunds, profit-dependent and profit-independent premium refunds, for own account

|! style="text-align:left" | —-7

|! class="col-s" style="text-align:leftright" | —-2,008

| style="text-align:rightleft" | —

| style="text-align:left" | b) lessthereof: commissions received and profit participation from reinsurance business ceded

| style="text-align:rightleft" | —

| style="text-align:rightleft" | -477,273

|! colspan="4" style="text-align:left" | 8. Other technical expenses for own account

|! style="text-align:left" | —-11,229

|! class="col-s" style="text-align:leftright" | —-10,709

|! colspan="4" style="text-align:left" | 9. Subtotal

|! style="text-align:left" | —5,719

|! class="col-s" style="text-align:leftright" | —-39,736

|! colspan="4" style="text-align:left" | 10. Change in equalization reserveprovision and similar reservesprovisions

|! style="text-align:left" | —14,410

|! class="col-s" style="text-align:leftright" | —9,026

|! colspan="4" style="text-align:left" | 11. TechnicalUnderwriting result for own account

|! style="text-align:left" | —20,130

|! class="col-s" style="text-align:leftright" | —-30,710

{{chunk|doc=9fth4kgfqj|c=144120|p=37|cont=1}}

! colspan="4" style="text-align:left" | II. Non-technicalunderwriting account In EUR thousand

| colspan="2" style="text-align:left" | a) Income from participating interests – thereof from affiliated companiesundertakings: 4,325 TEUR (17,108 TEUR)

| colspan="3" style="text-align:left" | b) Income from other investments – thereof from affiliated companiesundertakings: 21,905 TEUR (35,520 TEUR)

| colspan="2" style="text-align:left" | b) AmortizationDepreciation ofon investments

| colspan="2" style="text-align:left" | IncomeTaxes taxeson income and earnings

! colspan="3" style="text-align:left" | Profits transferred underdue to a profit-sharing agreement, a profit transfer, agreement or a partial profit transfer agreement

! colspan="3" style="text-align:left" | Net income/net loss for the year or retained earnings

{{chunk|doc=9fth4kgfqj|c=145121|p=37}}

{{chunk|doc=9fth4kgfqj|c=146122|p=38}}

'''Companycompany registration details'''

* TheHDI companyVersicherung AG is registered with the Hanover District Court under commercial register number HRB 58934.

{{chunk|doc=9fth4kgfqj|c=147123|p=38}}

* The company's annual financial statements and management report of the company are prepared accordingin accordance towith the regulationsprovisions of the German Commercial Code (HGB), the German Stock Corporation Act (AktG), the German Insurance Supervision Act (VAG), and relevant ordinances, particularly the German RegulationAccounting on AccountingRegulations for Insurance Undertakings (RechVersV), in their versionsversion valid as ofat the balance sheet date.

==== Assets ====

{{chunk|doc=9fth4kgfqj|c=148124|p=38}}

'''Intangible assets and equity investments valuation'''

* Intangible assets are recognized at acquisition cost less scheduled, linearstraight-line depreciation over an estimated useful life of five years.

* Self-created intangible assets of fixed assets are not capitalized according toper § 248 Abs. 2 Satz 1 HGB.

* Shares in affiliated companies and equity investments are recognized at acquisition cost, reduced by any write-downsdepreciation according to the mitigatedsoftened lower of cost or market principle (§ 341b Abs. 1 Satz 2 HGB in conjunction with § 253 Abs. 1 Satz 1, Abs. 3 Satz 5 HGB).

{{chunk|doc=9fth4kgfqj|c=149125|p=38}}

'''Loans to affiliated companies and relateddebt entitiessecurities valuation'''

* Loans to affiliated companies and companies with which an equity relationship exists are recognized at amortized cost using the effective interest method, in accordance withper § 341c Abs. 3 HGB.

* Capital investments are recordedrecognized at the purchase price upon acquisition.

* The difference fromto the repayment amount is amortized using the effective interest method.

* Necessary write-downsdepreciations are made according to the mitigatedsoftened lower of cost or market principle.

* Securities intended forto permanentserve use inthe business operationspermanently are valued according to the provisions for fixed assets using the mitigatedsoftened lower of cost or market principle, as per the regulations for fixed assets (§ 341b Abs. 2 zweiter Halbsatz HGB in conjunction with § 253 Abs. 1 Satz 1, Abs. 3 Satz 5 HGB).

* Permanent impairments are written off through profit or lossexpensed.

* To assess the existence of a permanent impairment for bearer bonds, other fixed-incomeinterest securities, and debt instruments held through funds and recognized as fixed assets, issuercredit checks of the creditworthinessissuers and rating developments are considered.

* For publicly traded shares, the criteria recommended by the IDW Insurance Expert Committee of the IDW are used to determine the existence of a probable permanent impairment.

* A permanent impairment may exist if the fair value of a security has been consistently more than 20% below its book value for the six months preceding the balance sheet date, or if the average daily stock exchange price over the last 12 months has beenis more than 10% below its book value.

* The assessment of the probable permanence of an impairment for units or shares in investment funds with an unrealized loss on the investment unit at the balance sheet date is based on the assets held in the fund (look-through -approach).

{{chunk|doc=9fth4kgfqj|c=150125|p=39|cont=1}}

* Capital investments are recognized at the acquisition price upon purchaseacquisition.

* The difference fromto the repayment amount is amortized using the effective interest method.

* Necessary write-downsdepreciations are made according to the mitigatedsoftened lower of cost or market principle (§ 341b Abs. 2 zweiter Halbsatz HGB in conjunction with § 253 Abs. 1 Satz 1, Abs. 3 Satz 5 HGB).

* Structured products heldin the portfolio are financial instruments where the underlying instrument, a fixed-income cash instrument, is contractually combinedlinked with one or more derivatives.

* If the conditions underaccording to IDW RS HFA 22 are met, these are uniformly recognized at amortized cost according to the provisionsregulations for capital investments recognized as fixed assets, usingapplying the mitigatedsoftened lower of cost or market principle (§ 341b Abs. 1 Satz 2 HGB in conjunction with § 253 Abs. 3 Satz 5 HGB).

* In accordance with the requirement to write up assets (§ 253 Abs. 5 Satz 1 HGB), assets writtenthat were downdepreciated in previous years are written up through profit or loss to the extentamount of theirthe amortized costacquisition costs or a lower marketfair or stock exchangemarket value, if the reasons for the permanent impairment have ceased to exist and a recovery in value has occurred.

{{chunk|doc=9fth4kgfqj|c=151126|p=39}}

'''Receivables and other assets valuationcash'''

{{chunk|doc=9fth4kgfqj|c=152128|p=40}}

'''Equity and Reinsurancereinsurance Accountingaccounting'''

* SelectedFor selected reinsurance contracts use, a one-month time lag relative to gross figuresis used, with separate estimated bookings for large losses, for example, if material movements (e.g.occur, majorand losses)these are considered up to the current reporting date.

* Unearned premiums are calculated for directly written business are calculated using the 1/360 system or on a daily basis (pro- rata temporis basis), in accordance with supervisoryregulatory regulationsrequirements and the letter from the Federal Minister of Finance's letter ofdated April 30, 1974.

* Reinsured portionsshares are accrued accordingin toaccordance with contractual agreements.

{{chunk|doc=9fth4kgfqj|c=153129|p=40}}

'''Technical Provisionsprovisions Calculationfor claims'''

* The premium reserve for lifetime household insurance policies is calculated using the prospective method, on an individual contract basis, considering future costs, and in compliance with § 341f HGB and the legal ordinance issued under § 65 paraAbs. 1 VAG, on an individual contract basis, and including future costs.

* The technical interest rate valid at the time of contract inception is used.

* ForIn participatingparticipatory business, data from leading insurersinsurance companies is adopted.

* If data from leading insurers' datawas isnot unavailableavailable atby the balance sheet date, reserves per business relationship are estimated based on past experience.

* A latereserve claimsfor reserveincurred but not reported (IBNR) claims is calculated based on historical data for claims not yet reportedknown atby the balance sheet date, based on historical data.

* Actuarial methods are used to determine the number of expected lateIBNR claims and the expected average expected claim amount.

* For long-tail lines whereSince the standard method is unsuitablenot suitable for long-tail lines, the HGB late claimsIBNR reserve in these cases is derived from the actuarially determined IFRS reserve, with anincluding addeda surcharge.

* IfIn individual cases, if current information is available in individual cases, an appropriate amount is reserved based on thatthis information.

* The reserve for claims handling expensecosts reserveconsists comprisesof external and internal costscost components.

* ExternalThe external claims handling expensecost reservesreserve are establishedis specifically formed for each individual claim.

* InternalThe internal claims handling expensecost reservesreserve areis determined using a factor-based approximation method.

* This method uses paid claims as a volume measure for incurred costs and derivesdetermines future internal claims handling expense reservescosts as a percentage of the current claims reservesreserve for compensation.

* TheA reduction of the determined factor is reducedapplied based on line-of-business-specific experience, assuming that somea portion of claims handling has already occurredbeen performed for known claims.

{{chunk|doc=9fth4kgfqj|c=154130|p=40}}

'''Pension and Otherother Technicaltechnical Provisionsprovisions'''

* The gross pension reserve included in the reserve for outstanding claims is calculated basedaccording onto actuarial principles.

* The calculation usesis based on the German Actuarial Association (DAV) 2006 HUR mortality tables for women and men.

* The technical interest rate is determined according to § 5 paraAbs. 4 of the Reserve Regulation as the minimum of the originally applicablevalid maximum technical interest rate and the reference interest rate.

* The calculation of the fluctuation reserve applies the regulationsprovisions of § 29 and the appendix to § 29 RechVersV, as well as the provisions of the Insurance Reporting Ordinance (BerVersV).

* Other technical provisions are determined as follows: the lapse reserve was calculated by determining an average lapse rate for the last three years and multiplying it by the current year's premiums.

* If information is not available at the time of balancefinancial sheetstatement preparation, claims reserves are estimated based on the previous year's data.

* Pension obligations are recognized at the necessary fulfillment amount according to §reasonable 253judgment, para.as 1 sentence 2 HGB and discounted according toper § 253 paraAbs. 21 sentenceSatz 2 HGB using the average interest rate of the last ten years (projected to December 31, 2025) published by the Bundesbank according to the Reserve Discounting Ordinance (RückAbzinsV) as of September 30, 2025, with an assumed remaining term of 15 years.

* Pension provisions for non-reinsured employer-financed commitments arewere determined using the projected unit credit method.

* Pension provisions for non-securities-linked employee-financed commitments arewere determined using the projected unit credit method, unless benefits are covered by reinsurance.

{{chunk|doc=9fth4kgfqj|c=155131|p=42}}

'''Valuation Assumptionsassumptions and Currencyother Translationliabilities'''

* The valuation is based on the HEUBECK-RICHTTAFELN 2018 G withdrawal probabilities, which have been strengthened according to the observed risk profile observed in the portfolio.

* Other assumptions used for the calculation include: salary dynamics of 3.25% (prior: 3.50%); pension dynamics of 2.08% (prior: 2.14%); interest rate of 2.06% (prior: 1.90%).

* Securities-linked employee-financed commitments are exclusively consist of benefit-congruentcongruently reinsured pension commitments, which must be valued according to IDW RS HFA 30 Rz. 74 in conjunction with § 253 paraAbs. 1 sentenceSatz 3 HGB.

* Other provisions are recognized at their estimatedprobable necessary fulfillment amount based on prudent commercial judgment and, if expected maturities exceed one year, discounted according to § 253 para. 2 sentence 1 HGB using the average interest rate (reporting date interest rate as of December 31, 2025) of the last seven years published by the Bundesbank according to the Reserve Discounting Ordinance (RückAbzinsV)valuation.

* Deferred income isincludes reportedrevenues underreceived passivebefore deferredthe itemsbalance ifsheet itdate representsthat represent income for a specific period after the reporting datethereafter.

* Foreign currency positions are translated at the balance sheet date using the spot rate ([[Definition:Foreignmiddle exchange|foreign exchange]] mid-rate) for balance sheet items and the average rate for profit and loss statement items.

* For monthly foreign currency valuation, balanceinventory sheet itemspositions are translated at the respective month-end spot rate at month-end.

* The exchange rate for the monthly valuation of profit and loss statement items is the ultimaterespective closing rate of the previous month.

* The sum of the translated individual values effectively results in a translation usingat average rates.

* To improve clarity, the financial statements (balance sheet, income statement, and notes) are prepared in thousands of eurosEuros.

* Individual items, subtotals, and totals are commercially rounded, so the sum of individual values may differ from subtotals and totals due to rounding differences.

==== Development of assetsasset items A. and B.I. to B.III. in fiscal year 2025 ====

{{chunk|doc=9fth4kgfqj|c=156132|p=44}}

|+ Development of assetsasset items A. and B.I. to B.III. in fiscal year 2025

! class="col-s" style="text-align:right" | Amortization and depreciationDepreciation

| style="text-align:left" | ConcessionsAcquired concessions, industrial property rights and similar rights and values acquired for consideration, and licenses tofor such rights and values

| style="text-align:left" | I. Land, rights equivalent to land, and buildings, including buildings on third-party land

| style="text-align:left" | 4. Loans to companies with which there is a participation relationship exists

| style="text-align:left" | 1. Shares, units or shares in investment funds and other non-fixed-interestincome securities

| style="text-align:left" | 2. Bearer bonds and other fixed-interestincome securities

{{chunk|doc=9fth4kgfqj|c=157133|p=44}}

==== Determination of fair values of investments ====

{{chunk|doc=9fth4kgfqj|c=158134|p=46}}

'''Valuation of investments in affiliated companies and participations'''

* ValuationThe fair values of shares in affiliated companies and participations variesare determined differently based on the company's purpose and size.

* Companies valued using the income approach are typicallygenerally set at the present value of future distributable financial surpluses (income value).

* For companies that subscribe to unlisted equity instruments not traded on the capital market (investment vehicles for Private Equity, Real Estate funds, and other alternative investments), valuation is analogous to comparable directly held comparable instruments using the Net Asset Value method.

* FairThe fair values of loans to affiliated companies and companies with participationswhich an equity relationship exists, registered bonds, promissory note receivables, and loans are determined using a present value method with product- and rating-specific yield curves.

* Special features likesuch as deposit insurance, guarantor liability, or subordination are considered in the spread surcharges used.

{{chunk|doc=9fth4kgfqj|c=159135|p=46}}

'''Valuation of publiclyother traded equities and bondsinvestments'''

{{chunk|doc=9fth4kgfqj|c=160136|p=46}}

'''Valuation of alternative investments and swapsderivatives'''

* FairThe fair value forof Private Equity, Infrastructure, and Real Estate funds held in the portfolio is determined based on the last Net Asset Value (Capital Account) reported by the General Partner, which is updated to the reporting date for interim calls and distributions until the reporting date.

* For the fair value determination of swaps, the Discounted Cash Flow method is applied separately for both legs of a swap.

* For the variable-rate leg, the cash flow is rolled out until the next interest rate adjustment date.

* The sum of the present values (considering the sign for the long/short positionsposition) yieldsresults in the theoretical price or the current receivable/ and payable position of the entire swap transaction.

{{chunk|doc=9fth4kgfqj|c=161137|p=47}}

'''Investments with fairFair values below bookcarrying valuesamounts'''

* For the following investments accounted forrecognized at acquisition cost, the fair values are below bookthe valuescarrying amounts.

=== Investments with unrecognizedhidden lossesliabilities ===

{{chunk|doc=9fth4kgfqj|c=162138|p=47}}

|+ Carrying amounts, Fair values, and Balance by In EUR thousand

! class="col-sm" style="text-align:right" | Carrying amounts

! class="col-sm" style="text-align:right" | Fair values

! class="col-sm" style="text-align:right" | Balance

| style="text-align:left" | InvestmentsShares in affiliated companiesundertakings

| style="text-align:left" | Loans to companies within which an equity interest exists

| style="text-align:left" | Shares or stockunits in investment funds

| style="text-align:left" | Other loans Loans to companies in which an equity interest exists Bearer bonds

| style="text-align:right" | 451,127 6,727 1,335,690

| style="text-align:right" | 436,112 6,317 1,315,553

| style="text-align:right" | -15,015 6,317 1,315,553

{{chunk|doc=9fth4kgfqj|c=163139|p=47}}

'''Avoided depreciation on investment propertiesinvestments'''

* Depreciation of EUR 35,313k (prior year: EUR 111,638k) was avoided on investment propertiesinvestments recognized as fixed assets, in accordance withapplying § 341b (Abs. 2) HGB.

* These avoided depreciations are considered temporary impairments.

{{chunk|doc=9fth4kgfqj|c=165140|p=47}}

* DepreciationImpairments on investmentinvestments propertiesinclude includesunscheduled extraordinary depreciationimpairments of EUR 11,492k (prior year: EUR 794k) in accordance with § 277 (3) sentence 1 HGB.

{{chunk|doc=9fth4kgfqj|c=166141|p=48}}

'''Significant investments in affiliated companies and investmentsparticipations'''

* Significant sharesinvestments in affiliated companies and investmentsparticipations that are essentialmaterial to the company are listed below.

* Companies of minor economic importance without significant influenceimpact on the asset, financial, and earnings situationposition are not presented, in accordance with § 286 No. 3 Sentence 1 HGB.

{{chunk|doc=9fth4kgfqj|c=167142|p=48}}

|+ Shareholders' equity, Incomenet income &amp; Shareshare of capital by Namename, registered office

! class="col-s" style="text-align:right" | Shareholders' equity {{fn ref|1)|2=before1) prior to profit transfer and distribution, datainformation based on the latest available audited annual financial statements available}}

! class="col-s" style="text-align:right" | IncomeNet income{{fn ref|1)|2=before1) prior to profit transfer and distribution, datainformation based on the latest available audited annual financial statements available}}

! class="col-s" style="text-align:right" | Share of capital {{fn ref|2)|2=2) The shareholding ratio results from the addition of all directly and indirectly held shares in accordance with § 16 para. 2 and 4 AktG}}

| style="text-align:left" | Enhanced Sustainable Power Fund Nr. 3 GmbH &amp; Co. KG geschlossene Investment KG, Grünwald {{fn ref|3)|2=Equity3) andInformation neton equity and incomeannual figuresresults relaterelates to the fiscal year from 30.9.2021 to 30.9.2022}}

| style="text-align:right" | 2.0 %

| style="text-align:right" | 100.0 %

| style="text-align:right" | 3.0 %

| style="text-align:left" | hector digital GmbH, Marpingen {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 19.0 %

| style="text-align:left" | Infrastruktur Ludwigsau GmbH &amp; Co KG, Köln {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Infrastruktur Windpark Vier Fichten GbR, Bremen {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 41.7 %

| style="text-align:right" | 7.2 %

| style="text-align:right" | 49.0 %

| style="text-align:right" | 5.5 %

| style="text-align:right" | 50.0 %

| style="text-align:left" | SSV Schadenschutzverband GmbH, HanoverHannover

| style="text-align:right" | 100.0 %

| style="text-align:left" | Talanx Infrastructure France 2 GmbH, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Talanx Infrastructure Portugal 2 GmbH, CologneKöln

| style="text-align:right" | 50.0 %

| style="text-align:left" | Talanx Infrastructure Portugal GmbH, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 70.0 %

| style="text-align:left" | TD Real Assets GmbH &amp; Co. KG, CologneKöln

| style="text-align:right" | 17.0 %

| style="text-align:left" | TD Sach Private Equity GmbH &amp; Co. KG, CologneKöln

| style="text-align:right" | 100.0 %

| style="text-align:left" | Windfarm Bellheim GmbH &amp; Co. KG, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 85.0 %

| style="text-align:left" | Windpark Mittleres Mecklenburg GmbH &amp; Co. KG, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Windpark Parchim GmbH &amp; Co. KG, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 51.0 %

| style="text-align:left" | Windpark Rehain GmbH &amp; Co. KG, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Windpark Sandstruth GmbH &amp; Co. KG, Cologne Köln{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:right" | 50.0 %

| style="text-align:left" | AbroadForeign:

| style="text-align:right" | 100 %

| style="text-align:left" | CEF BKR03 NL B.V., Netherlands, Amsterdam {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 5.2 %

| style="text-align:left" | EIP Gas Transit Switzerland SCS, Luxembourg, Luxembourg {{fn ref|5)|2=Equity5) Information on equity and net income figures relaterelates to the fiscal year from 30.6.2024 to 30.6.2025}}

| style="text-align:right" | 2.8 %

| style="text-align:left" | EIP Wind Power Central Norway SCS, Luxembourg, Luxembourg {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 10.9 %

| style="text-align:left" | Escala Braga - Sociedade Gestora do Edificio S.A., Portugal, Braga {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 49.0 %

| style="text-align:left" | Escala Parque - Gestao de Estacionamento S.A., Portugal, Linhó {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 49.0 %

| style="text-align:left" | Escala Vila Franca - Sociedade Gestora do Edificio S.A., Portugal, Linhó {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 49.0 %

| style="text-align:left" | Ferme Eolienne du Confolentais SNC, FranceFrankreich, Toulouse {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Iberia Termosolar 1, S.L.U., SpainSpanien, Seville Sevilla{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 33.4 %

| style="text-align:left" | Infrastorm Co-Invest 1 SCA, LuxembourgLuxemburg, Luxembourg Luxemburg{{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 45.0 %

| style="text-align:left" | Le Chemin de La Milaine S.N.C., FranceFrankreich, Lille {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Le Louveng S.A.S, FranceFrankreich, Lille {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | Les Vents de Malet S.N.C., FranceFrankreich, Lille {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 100.0 %

| style="text-align:left" | PNH - Parque do Novo Hospital S.A., Portugal, Linhó {{fn ref|4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

| style="text-align:right" | 49.0 %

{{fn note|1=1)|2=before1) prior to profit transfer and distribution, datainformation based on the latest available audited annual financial statements available}}

{{fn note|1=2)|2=2) The shareholding ratio results from the addition of all directly and indirectly held shares in accordance with § 16 para. 2 and 4 AktG}}

{{fn note|1=3)|2=Equity3) andInformation neton equity and incomeannual figuresresults relaterelates to the fiscal year from 30.9.2021 to 30.9.2022}}

{{fn note|1=4)|2=indirect4) Indirect participation, participation ratequota according to § 16 paraAbs. 2 and 4 AktG}}

{{fn note|1=5)|2=Equity5) Information on equity and net income figures relaterelates to the fiscal year from 30.6.2024 to 30.6.2025}}

{{chunk|doc=9fth4kgfqj|c=169144|p=49}}

| style="text-align:left" | HVAktienHV Aktien

{{chunk|doc=9fth4kgfqj|c=171145|p=49}}

* Depreciation according to § 253 para. 3 sentence 5 HGB was not fully recognized for special funds showing hidden burdens, as these wereare assessed asconsidered temporary impairments.

== To C.III. Other Receivablesreceivables ==

{{chunk|doc=9fth4kgfqj|c=172146|p=49}}

|+ To C.III. Other Receivablesreceivables