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

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

'''DocumentCompany identificationand Report Title'''

| style="text-align:left" | Net yieldinterest margin (in %)

== Table of Contents ==

'''Management Report sections'''

'''Management Report appendix'''

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

==== Corporate policyPolicy backgroundBackground ====

* HDI Deutschland bundles the activities of private and corporate customer companies in [[Definition:Property & casualty|property and casualty]] insurance, life insurance, and bancassurance inwithin Germany.

* HDI Deutschland AG manages thisthe HDI Deutschland business division.

* The company offers broad insurance coverage for private individuals, sole proprietors, freelancers, and small andto medium-sized enterprises in liability, accident, property, and motor vehicle insurancebusinesses.

* HDI Versicherung AG aimsoffers tocomprehensive beinsurance asolutions providerfor ofcompanies affordablein andtrade, transparentservices, insuranceand productscrafts forthrough privateindustry-specific solutions and corporatemodular insurance customerspackages.

'''RatingS&P rating'''

* StandardThe &rating Poor's certified that the company hasconfirms a particularly strong financial profile for the company.

==== Our salesSales partnersPartners ====

* HDI aims to provide customers with easy access to its insurance products and diverse consulting and service offerings.

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

* The functional organization ensures clear responsibilities and establishes the basis for cross-segment work in [[Definition:Property & casualty|property and casualty]] ([[Definition:Property & casualty|P&C]]) and life insurance.

* 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 seeks to optimize interfaces with salesdistribution partners and offer them digitally signablecontractible products.

==== ServicesGroup withininternal the Groupservices ====

'''HDIGroup Versicherung AG operationsservices and servicessynergies'''

* Its integrationIntegration into a large insurance group allows for cross-company organized functions, enabling the efficient use of synergies and resources.

* This structure allows for cost advantages from standardizeduniform processing within the group and better conditions with service providers.

* 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.

* HDI Versicherung AG also utilizesuses central services from Ampega Asset Management GmbH, which manages assets for the group's insurance companies within the group.

===== Economic developmentDevelopment =====

'''Global economicEconomic developmentDevelopment and US trade policy2025'''

* 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, particularly after the "Liberation Day" in April and subsequent policy reversals.

* The German economy recorded a +0.2% YoY increasegrowth in 2025 after two consecutive recession years, with GDP only 0.1% above its pre-COVID level at the end of 2019.

'''US andEconomic ChinaPerformance economic development2025'''

* The US economy grew +by 2.2% YoY in 2025 despite uncertainties from the new administration.

* US growthGrowth was primarily driven by private consumption, though its momentum cooled compared to H2 2024 due to a weaker labor market, sustained high price pressure (partly from tariffs), and a government shutdown in October/November.

* The US unemployment rate in the US rose only slightly from 4.1% to 4.4% over the year, as the labor supply decreased due to anti-migration measures.

* Equipment investments were a growth driver in the US, achieving the strongest increase since 2014 due to the AI boom.

* A significant reduction in the US foreign trade deficit, resulting from trade restrictions, also drovecontributed to growth.

* US inflation also slightly decreased from 2.9% to 2.7% over 2025YoY, as anticipatedthe feared strong price effects from US tariff barriers did not fully materialize.

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

==== Capital marketsMarkets ====

* International equitystock markets reached new records in 2025 despite geopolitical and trade tensions.

* The US S&P 500 recorded numerous new record highs in 2025 after a correction following the '"Liberation Day'" shock in April.

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* 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.

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'''Bond yields and, oil prices, and currency movements 2025'''

* The yield on German federal bonds of the same maturity jumpedinitially rose sharply from 2.41% to 2.90% in March following the announcement of Germany's special fund for infrastructure and risingincreased defense spending.

* Doubts about rapidquick implementation caused the German bond yield to fall back below 2.50% within weeks.

* IncreasedA stronger-than-expected increase in oil supply from OPEC+ pushed Brent crude oil prices down from USD 75 to USD 61 per barrel in 2025.

* TheDoubts Euroabout appreciatedUS significantlydebt sustainability and tariff escalation led to a significant appreciation of the Euro against the US Dollar from 1.04 to 1.18 in the first half of 2025 due to doubts about US debt sustainability and tariff escalation.

* In the second half of 2025, the Euro consolidated slightly below this level amiddue to political attacks on the Fed's independence.

==== German insuranceInsurance industryIndustry ====

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'''German insurance market premium growthoverview'''

* Information on insurance markets is based on publications fromby the Gesamtverband der Deutschen Versicherungswirtschaft e. V. (GDV) and includes preliminary data.

* The German insurance industry's experiencedpremium anincome increaseincreased inby premium6.6% incometo EUR 253.6bn in fiscal year 2025, following stable development inaccording previousto yearsprojections.

==== Legal and regulatoryRegulatory frameworkFramework ====

===== Supervisory requirementsRequirements =====

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'''Regulatory environment overview'''

* In Germany, the Federal Financial Supervisory Authority (BaFin) is responsible for this supervisiontask.

* TheComprehensive legal requirements for business activities are also subject to extensive legal requirementsapply.

* Regulatory frameworks have become strictermore stringent in recent years, leading to increased complexity, a trend that continued in 2025.

====== Insurance Distribution Directive ======

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* TheInsurance product distribution of insurance products is subject to extensive legal requirements.

* Primary insurers must comply with legal requirements and BaFin Circular 11/2018 regarding cooperation with insurance intermediaries and risk management in salesdistribution.

* A seven-day waiting period for concludingthe conclusion of residual credit agreements for general consumer credit agreements was introduced on January 1, 2025.

* The Accessibility Strengthening Act and its corresponding regulation came into force on June 28, 2025, requiring certain products and services for consumers to be provided accessibly and with accessibility information.

====== Minimum requirementsRequirements for businessBusiness organizationOrganization ======

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'''BaFin Circular 09/2025 (VA) and MaGo implementationguidelines'''

* The revised BaFin Circular 09/2025 (VA) on the official interpretation of the Minimum Requirements for Business Organization of Insurance Undertakings (MaGo) clarifies overarching aspects of business organization and central terms like "proportionality" and "administrative, management, or supervisory body" forfrom the supervisory insuranceauthority's undertakingsperspective.

* TheDespite HDIlacking Groupdirect considerslegal thebinding, MaGo inis itsconsidered businessin organization,the despiteHDI the circularGroup's lackbusiness of direct legal bindingorganization, particularly in general governance, key functions, risk management system, own funds requirements, internal control system, outsourcing, and emergency management.

==== Digitalization ====

'''Digitalization and regulatory impact'''

* Legal questions and challenges focusing on IT security are becoming more important for HDI Group companies due to digitalization.

* The EU's Digital Operational Resilience Act (DORA) introduces new requirements for insurance companies, effective January 17, 2025, to strengthen the European financial market against cyber risks and ICT incidents.

==== Data protectionProtection ====

'''Data protection management'''

* 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 complyhandle withdata carefully and adhere to data protection requirements.

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

* Data protection rights of customers, shareholders, and employees are also covered by these procedures.

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

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

==== Business performancePerformance and positionSituation ====

* The HDI Deutschland is[[Definition:Business mix|business unit]] continuingcontinues its entrepreneurialcorporate planning withinunder the new strategic program "Substanz" (SBSTNZ.).

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

* The core of the new strategy is a targeted build-up of excellence along the value chain, focusing on reducing complexity and increasing efficiency in internal processes.

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* HDI Versicherung AG focuses on its strengths within the "Substanz" strategic program: exclusive sales, corporate and freelanceliberal professions, and selected business models in other important sales channels.

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

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

* The implementation of the "Substanz" strategic program shows noticeable efficiency gainsimprovements through the further development of operations and claims, particularly by focusing business models, automation, and the use of AI.

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

* InProfitability fireof and multi-risk products,the portfolio profitability, processand professionalization, and efficiency improvements areof beingprocesses are consistently and successfully driven, forwardespecially in fire and multi-risk products.

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'''Future readinessAI and agility'''

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

==== IT strategyStrategy ====

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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 forrequirements of all risk carriers.

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

* Essential components of the IT strategyaspects include the sustainable implementation of IT compliance and regulatory requirements under the Digital Operational Resilience Act (DORA), and continuous improvement of the security protection level.

==== Product ratingsRatings ====

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* HDI Versicherung AG continuously improves products and services, reflected in product ratings, awards, and quality seals of approval.

* Stiftung Warentest rated the privateResidential liabilityBuilding insuranceInsurance (Premium [[Definition:Business mix|product line]]) with 'Sehr gut (0.7)'.

* Franke & Bornberg Research GmbH awardedrated the HDI privateAccident liability insuranceInsurance (Premium, [[Definition:Business100% mix|product line]]participation, Singleprotection and Premium [[Definition:Business mix|product line]], Familyletter) and theHDI residentialHousehold buildingContents insuranceInsurance (Premium [[Definition:Business mix|product line]] / Multi-family house Premium product) with 'FFF+' (excellentvery good) in the HUS-Privat sector.

=== Sustainability ===

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

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

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

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'''Underwriting exclusionsthermal forcoal and fossil fuelsfuel exclusions'''

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

* Project policies infor deep-sea mining are also excluded.

'''Social engagement andCorporate governance'''

* ACorporate uniformgovernance frameworkis a significant topic for the mostlycapital decentralized socialmarket and communitya engagementkey wasfocus created and anchored inof the Groupsustainability strategy in 2022.

=== 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.

* The development of these and other key figures will be explaineddetailed in subsequent chapters.

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

===== Business performancedevelopment: Insurance business totaloverall =====

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|+ Business performancedevelopment: Insurance business totaloverall

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'''Gross and netNet premiumsPremiums'''

* 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 decline in motor insurance due to portfolio reductions.

* FreelanceFree professions and private lines also sawexperienced a slight decreasedecline 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 segmentline.

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'''Claims expensesGross and lossNet Claims ratiosExpenses'''

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

* ThisGross wasbusiness primarilyyear dueexpenses todecreased aby EUR 172.4m decrease in gross current year expenses to EUR 1,071.8m (prior: EUR 1,244.1m), drivendue byto a reductiondecline in frequency claims, especially in motor insurance.

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

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

* Gross total lossclaims ratio decreased by 1.7pts7 YoYpercentage points to 64.5% (prior: 66.2%).

* Net currentbusiness year claims expenses decreased by EUR 165.6m to EUR 1,067.0m (prior: EUR 1,232.6m).

* Net run-offsettlement gain decreased by EUR 119.2m to EUR 71.0m (prior: EUR 190.2m).

* Net lossclaims ratio decreased from 69.3% to 66.9%.

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'''Operating expensesExpenses and combinedCombined ratioRatio'''

* Gross operating expenses for insurance businessoperations 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 businessoperations 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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'''Technical resultResult'''

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

===== InsuranceDirectly written insurance business =====

|+ Self-concludedDirectly written insurance business

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* [[Definition:Gross written premiums|Gross written premiums]] in themotor Motor divisioninsurance decreased by EUR 56.0m to EUR 521.6m (prior: EUR 577.6m).

* This decline was primarily driven by portfolio reductions followingafter the application ofapplying the premium adjustment clause and the discontinuation ofdiscontinuing new business in selected sales channels.

* EarnedNet netearned premiums decreased by EUR 50.4m to EUR 517.5m (prior: EUR 568.0m).

* Drivers for the decrease in gross current year claims expenses included lower frequency claims and the absence of cumulative natural catastrophe accumulation claims.

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

* This was causedprimarily bydue to a decrease in net current year claims expenses by EUR 148.4m to EUR 428.5m (prior: EUR 576.9m), mirroringfollowing the gross developmenttrend.

* The net run-off gainresult decreased by EUR 31.1m to EUR 64.7m (prior: EUR 95.8m).

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* Gross and net operating expenses for insurance operations decreased to EUR 107.4m (prior: EUR 124.9m), primarily driven by declining administrative expenses.

* The gross combined loss/expenseratio ratios were lower than the previous year, with gross atwas 91.0% (prior: 106.0%), andwhich netwas atlower 91.0%than (prior:the 106.7%)previous year.

* The net underwritingtechnical result for the Motormotor insurance division was -EUR -2.6m (prior: -EUR -39.0m).

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'''Liability insuranceInsurance 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 liability segment "Betriebshaftpflicht" (commercial liability) showed positive effects on [[Definition:Gross written premiums|gross written premiums]] fromdue to continued portfolio growth.

* Premiums forin the "Freie Berufe" (liberal professions) segment "Heilwesenhaftpflicht" (medical professional liability segment) remained stable with slightly growingslight portfolio growth.

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

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

* Gross current year claims expenses for the financial year rose to EUR 221.6m (prior: EUR 218.8m), particularly in the corporate liabilitysegment segment,"Betriebshaftpflicht" 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 primarilymainly due to the decrease indecreased net settlementrun-off resultsresult toof -EUR 46.3m (prior: EUR 41.7m), analogous to the gross figures.

* Net current year claims expenses for the financial year increased from EUR 218.8m to EUR 221.6m.

* 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 lowerdeclining administrative costs, mainlyespecially after considering a special write-downdepreciation in the previous year.

* Combined loss/cost andratios expensereflected ratiosthese developments, increasedincreasing gross to 115.5% (prior: 89.6%) and net to 114.2% (prior: 89.0%).

* The liability insurance segment recorded a net underwritingtechnical result of EUR 6.8m (prior: EUR 26.7m) after the fluctuation reserve.

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

* Gross and net claims expenses for insurance claims increased by EUR 3.2m to EUR 29.8m (prior: EUR 26.6m).

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

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

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

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

* The accidentnet insuranceunderwriting segmentresult achievedfor athe net technicalaccident insurance resultsegment ofwas EUR 14.6m (prior: EUR 15.8m) after the fluctuation reserve.

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'''Multi Risk premiumssegment and claimsperformance'''

* Premium adjustmentsgrowth contributedwas positively toimpacted by premium growthadjustments.

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

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

* OffsettingThis this,was currentpartially yearoffset claims expensesby decreased bya EUR 7.1m decrease in current year claims expenses to EUR 119.5m (prior: EUR 126.6m), due to the absence of accumulation claims, which more than compensatedovercompensated for increased major claims burden.

* Net run-offsettlement gains decreased by EUR 19.6m to EUR 0.9m (prior: EUR 20.4m), following the decline in gross run-offsettlements.

* ThisThe reductiondecrease in operating expenses was due to lower administrative costs after accounting forconsidering a special write-down in the previous year.

* 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.

* GrossThe combinednet ratiounderwriting result was 107EUR -29.0%6m (prior: 94EUR -20.6%1m).

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

* The gross settlement result improved by EUR 16.3m YoY to EUR 15.0m (prior: -EUR -1.3m) due to reserve reviews of reserves from older accident years.

* The gross loss ratio decreased by 17.9 percentage points9pts to 45.1% (prior: 63.0%).

* Net current year claims expenses for the financial year decreased by EUR 12.2m to EUR 89.0m (prior: EUR 101.2m).

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

* The net loss ratio decreased by 19.7 percentage points7pts to 49.5% (prior: 69.3%).

* The gross expensecost ratio decreased to 32.8% (prior: 35.4%).

* The net expensecost ratio decreased to 34.3% (prior: 38.1%).

* The combined grossratios loss/cost ratio waswere 77.9% gross (prior: 98.5%) and 83.8% net (prior: 107.4%).

* The combined net loss/costunderwriting ratioresult wasimproved 83by EUR 21.8%6m YoY to EUR 18.6m (prior: 107EUR -3.4%0m) after the fluctuation reserve.

==== Combined household insurance ====

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

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* 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 netgross combinedcost ratio decreased fromto 8435.87% to(prior: 7436.73%).

* The net underwritingcost resultratio afterdecreased fluctuationto reserve was EUR 1836.2m6% (prior: EUR 1338.6m1%).

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'''Other Insuranceinsurance Lineslines Performanceperformance'''

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

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

* Technical Insuranceinsurance and Transporttransport Insuranceinsurance segments experienced a slight premium increase YoY.

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

* EarnedNet netearned premiums increased by EUR 32.0m to EUR 193.0m (prior: EUR 161.1m).

* 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 ana 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 losses and a decline in large claims in the fire segment.

* ThisGross reductionsettlement wasgains primarily dueincreased to theEUR absence17.4m of(prior: cumulativeEUR natural16.8m), catastrophemainly claimsdue and a decrease into largeincreased claimssettlement in the Firecyber segment.

* TheNet grossclaims loss ratio for other insurance linesexpenses decreased by 16EUR 6.1pts4m to 52EUR 115.8%7m (prior: 68EUR 122.8%1m).

* NetThis expensesreduction forwas insurancepartly claims decreaseddriven by a EUR 6.4m8m decrease in net current year claims expenses to EUR 115130.7m0m (prior: EUR 122136.1m8m).

* 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 netgross expensecost ratio decreased to 4037.62% (prior: 4038.79%).

* The combinednet grosscost ratio improveddecreased to 9040.06% (prior: 10740.7%).

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

==== Investment result ====

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* Slightly higher income was generated in fixed-income investment classes in direct investments due to an increased reinvestment rate for the full year.

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

* A currentAn average current yield{{fn ref|1}} of 3.0% (prior year: 3.0%) was achieved.

* These resultsextraordinary weregains and losses primarily resulted from the sale of a property and various fixed-incomedebt securities.

* Extraordinary additionswrite-ups and write-downs amounted to -EUR 17.7m (prior year: -EUR 3.7m), driven by extraordinary write-downs on equity investments.

* Other significant asset classes includedwere bond funds at 17.5% (prior year: 15.7%) and equity interestsparticipations and shares in affiliated companies at 6.9% (prior year: 7.2%).

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* Loans to affiliated companies and companies with which an equity interestrelationship exists remained at the previousprior year's level, amounting to EUR 223.2m (prior year: EUR 172.8m).

* EquityHoldings interestsof shares and shares slightlyparticipations decreased comparedslightly to the previous year, totaling EUR 258.4m (prior year: EUR 269.7m).

* Real estate fundsfund holdings remained constant at EUR 34.1m (prior year: EUR 35.3m).

* Other fundsfund slightlyholdings increased slightly to EUR 39.8m (prior year: EUR 38.0m).

* Equity fundsfund holdings 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.

* Valuation differences amounted to EUR 71.2m (prior year: -EUR -59.5m).

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

* NetAs HDI Versicherung AG operates exclusively in the German market, net provisions for outstanding claims are almost unaffected by exchange rate fluctuations because HDI Versicherung AG operates exclusively in the German market.

{{chunk|doc=9fth4kgfqj|c=7868|p=19}}

'''Operating performance and netunderwriting resultresults'''

* 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.

* ThePremium decline in motor insurance premiums due to portfolio reductions was not fully offset by positive effects from premium adjustments and restructuring measures in corporate lines.

* Net claims expenses were also below the previous year's level, as expected.

* ThisThe main driver was primarilythe drivendecline byin aclaims decreaseexpenses infor currentthe fiscal year claims expenses due to lowerreduced frequency claims expenses in motor and private lines.

* A rise in large claims burden was offset by 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 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=7969|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 situation.

* The company currently considersbelieves itselfit able tocan permanently meet all obligations from existing insurance contracts.

* Risks threatening the company's existence, specificallydefined materialas significant risks with existential loss potential, could arise from systemic risks such as a collapse of the financial system collapse.

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

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

* Key risk-relevant influencing factors in the reporting year include the continued subdued overall economic situation in Germany, with international trade policy likely to increase risks for the global economy.

* Substantial challenges and risks canmay continue to arise from various legal requirements.

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

'''Strategic measures andRegulatory capital requirements'''

{{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 integration'''

* The basis of risk management basis is the risk strategy, approved annually approved by the Management Board, derived from the business strategy, and an integral part of corporate actions.

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

* StrategicRisk riskstrategic objectivesgoals include adherenceadhering to defined risk tolerance and risk budget.

* The company's risk management is integrated into the risk management of the HDI Germany [[Definition:Business mix|business unit]]division and the Group, adhering to Group guidelines.

* A supervisory-approvedAn Internal Model accordingapproved toby the supervisory authority, compliant with Solvency II, is used for risk quantification, with a one-calendar-year time horizon.

* The risk management system is closely linked towith the company's central control system.

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

'''Risk Assessmentassessment and Monitoringmonitoring'''

* The Management Board isreceives regularlyregular informedupdates abouton the current risk situation from risk management through risk reporting.

* The company conducts an Own Risk and Solvency Assessment (ORSA) at least annually, as a key part of its risk management system, to review overall solvency needs based on its specific risk profile.

{{chunk|doc=9fth4kgfqj|c=8677|p=20}}

'''Investment Riskrisk Managementmanagement'''

* The investment risk management system for investments includes specific tools for ongoing monitoring of current risk positions and risk-bearing capacity.

* All investments are continuously observed and analyzed by the CapitalInvestment Investments [[Definition:Business mix|business unit]]division and operational investment controlling.

* Scenario analyses and stress tests simulate the effects of capital market fluctuations to enable early response if neededresponses.

{{chunk|doc=9fth4kgfqj|c=8677|p=21|cont=1}}

* The company uses services from Ampega Asset Management GmbH for trading and settlement activities in the investment sector.

===== Risk organization =====

{{chunk|doc=9fth4kgfqj|c=8778|p=21}}

* The organizational structure forof the company's risk management ensures a separationfunctional of functionsseparation between active risk assumption and independent risk monitoring.

* CentralKey bodies include the company's entire Management Board, the key functions peraccording to § 7 No. 9 VAG (Independent Risk Controlling Function, Compliance Function, Internal Audit, Actuarial Function), and riskthe Risk ownersOfficers.

* The entire Management Board holdshas non-delegable responsibility for implementing and developing risk management, definingwithin the risk strategy, and making significant risk management decisions derived from itcompany.

* Risk ownersOfficers are responsible for identifying and assessing the significant risks within their area of responsibility, proposing risk reduction measures, and implementing appropriate risk control measures.

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

==== Risks of future development ====

{{chunk|doc=9fth4kgfqj|c=8879|p=21}}

===== Underwriting risks =====

{{chunk|doc=9fth4kgfqj|c=8980|p=21}}

'''UnderwritingInsurance risk definition'''

* UnderwritingInsurance risk refers to the danger that actual expenses for claims and benefits deviate from expected expenses due to chance, error, or change.

====== Premium risks ======

{{chunk|doc=9fth4kgfqj|c=9081|p=21}}

'''Premium andrisk claimsdefinition riskand management'''

* Premium risk (or premium/claims risk) arises frombecause theinsurance factpremiums, thatset compensationin advance, must be paid later fromcover pre-determinedcompensation insuranceamounts premiums, but the amountthat isare initially unknown.

* TheThere is a risk that the actual claims experience canmay deviate from the expected, potentially leading to a risk that premiums may not covercovering actual damagesclaims.

{{chunk|doc=9fth4kgfqj|c=9081|p=22|cont=1}}

* The company uses actuarial models for tarifficationtariff setting and continuously monitors claims experience.

* Portfolio analyses are conducted for thekey mainsegments to evaluate profitability, including individual segments within a [[Definition:Business mix|linesline of business]], allowing profitability assessments of individual segments within a line.

* ExtensiveClaims claimsdepartments controllinghave exists in theextensive claims departmentscontrolling.

* The portfolio is also covered by reinsurance.

===== Reserve risks =====

{{chunk|doc=9fth4kgfqj|c=9182|p=22}}

'''Reserve risk managementdefinition and mitigation'''

* Reserve risk is the danger that technical provisions are insufficient to fully settle claims that have occurred but are not yet settledprocessed 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, whoand provide reserve reportsprovided to the company in the form of reserve reports.

===== Market risks =====

{{chunk|doc=9fth4kgfqj|c=9385|p=22}}

'''Market risk definition and management'''

* 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 appropriate diversification.

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

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

{{chunk|doc=9fth4kgfqj|c=9486|p=22}}

* Potential changes in stock price levels affect the valuation of equities and asset positions modeled as equities in the risk model, particularly any company holdingsparticipations.

* 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=9587|p=22}}

====== Interest rate risks ======

{{chunk|doc=9fth4kgfqj|c=9688|p=22}}

'''Interest rate risk definition and management'''

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

* Suitable capitalCapital market instruments, such as derivatives, are used as needed to manage interest rate risk.

{{chunk|doc=9fth4kgfqj|c=9789|p=22}}

* Currency risk plays a minor role for the company because capital investments are almost exclusively made in Euros.

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

* This risk includes both real estate in the narrowerstrict sense (e.g., land and buildings) and real estate funds.

* 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 showsis percentageprovided changesfor inhypothetical thevalue marketlosses valuein ofreal estate investments, givenshowing apercentage hypothetical losschanges in the market value of real estate investments (calculated as of the balance sheet date).

{{chunk|doc=9fth4kgfqj|c=10093|p=23}}

| style="text-align:right" | -10 %

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

* Credit risks describeare defined as the risks of loss or adverse changes in financial position resulting from fluctuations in the creditworthiness of security 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.

* Key indicators for investment decisions by portfolio management are the ratingRating classes assigned by external agencies such as Standard & Poor's, Moody's, Fitch, or Scope Analysis are a key indicator for investment decisions made by portfolio management.

====== Credit quality structure of fixed-income investments ======

{{chunk|doc=9fth4kgfqj|c=10295|p=23}}

| style="text-align:left" | UnratedNot rated

{{chunk|doc=9fth4kgfqj|c=10396|p=23}}

* Dependencies on individual debtors are avoided as much aswhere possible.

====== Breakdown of fixed-income investments by type of issuer ======

| style="text-align:left" | Senior bonds offrom financial institutions

| style="text-align:left" | Subordinated bonds offrom financial institutions

{{fn note|1=1|2=1) Ein Asset Backed Security (ABS) ist ein forderungsbesichertes Wertpapier, bei dem die Zahlungsansprüche des Inhabers durch einen Bestand an Forderungen besichert werden. Fast alle Forderungsarten können die Basis für ein forderungsbesichertes Wertpapier sein, sofern sie bestimmte Bedingungen erfüllen. Je nach Art der zur Besicherung verwendeten Forderungen wird das besicherte Wertpapier einer bestimmten Produktgruppe zugeordnet, beispielsweise als CLO (Collateralized Loan Obligation) für Bankkredite oder als CBO (Collateralized Bond Obligation) für Unternehmensanleihen. Werden Hypotheken zur Besicherung verwendet, handelt es sich um ein Mortgage Backed Security (MBS).}}

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

* Structured products in the direct portfolio had a total book value of EUR 547.2m (prior: EUR 306.9m) in the direct portfolio as of December 31, 2025 (prior: EUR 306.9m).

* Value at Risk (VaR) is a key element for managing 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.

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

* As of December 31, 2025, the breakdown of claims against reinsurers by rating was: AA (at 47.1%), A (at 39.7%), and Unrated (at 13.2%), totaling 100.0%.

* 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 policypolicyholder cancellations.

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

* Liquidity risk refers to the risk that the company cannot realize investments and other assets to meet its financial obligations atwhen maturitydue.

* ThisIlliquidity of markets can resultlead into assets not being sold, or being sold with delays due to illiquid markets, or open positions not being closed or being closed with price reductions.

{{chunk|doc=9fth4kgfqj|c=108101|p=25}}

| style="text-align:left" | 0 – Cash and cash equivalents

{{chunk|doc=9fth4kgfqj|c=109102|p=25}}

* Individual minimum limits exist for highly liquid securities, and maximum limits exist for less liquid securities.

* Minimum limits are derived from the timingtemporal nature of insurance technical payment obligations.

* A sufficiently liquid investment structure ensures the company can makemeet required payments at all times.

===== Operational risksRisks =====

{{chunk|doc=9fth4kgfqj|c=110103|p=25}}

'''Operationaloperational risk definition'''

* Operational risk refers to the risk of loss resulting from inadequate or failed internal processes, personnelpeople, or systems, as well as from external events.

====== Risks from Business Continuity and IT Service Continuity ======

{{chunk|doc=9fth4kgfqj|c=111104|p=25}}

'''Businessbusiness continuity and IT Serviceservice Continuitycontinuity Risksrisks'''

* Risks from Business Continuity and IT Service Continuity risks refer to the risk of business operations being threatened, damaged, or disrupted by natural or human-made hazards.

* These risks include losses and additional costs due to IT system failures or technical problems, destruction or damage to buildings or building-wide utilities, andor other impairments to the work environment.

* The company reduces risks from disruptions to building infrastructure disruptions through effective risk control measures, including adherencecompliance towith safety and maintenance regulations, fire protection measures, and widespread mobile working capabilities.

* A crisis management system is established within the company toTo address risks from business interruptions due to crises or emergencies, ensuringthe company has established crisis management to ensure a rapid return to normal operations in casethe event of a disruption.

* Emergency preparedness is addressed through an emergency manual, Business Impact Analyses to determine the criticality of business processes, and the establishment of a crisis teamunit and emergency response team.

* Targeted investments in the security and availability of information technology maintain and increase the existing high security level of security.

====== Risks from processesProcesses ======

{{chunk|doc=9fth4kgfqj|c=112105|p=25}}

====== Compliance, legalLegal, and taxTax risksRisks ======

{{chunk|doc=9fth4kgfqj|c=113106|p=25}}

'''Compliance, legalLegal, and taxTax risksRisks'''

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

{{chunk|doc=9fth4kgfqj|c=113106|p=26|cont=1}}

* A Compliance Steering Committee for HDI Germany has been established for this purpose.

* Current legalLegal requirements arise,of forcurrent example,relevance arise from the Digital Operational Resilience Act (DORA) orand from conduct requirements of the insurance supervisory authority.

* PossiblePotential developments in supreme court case law or legislative changes, particularly in corporate, product, or tax law, are identified early and closely monitored.

===== Fraud risksRisks =====

{{chunk|doc=9fth4kgfqj|c=114107|p=26}}

'''Fraud Riskrisk Managementmanagement'''

* 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.

===== Personnel risksRisks =====

{{chunk|doc=9fth4kgfqj|c=115108|p=26}}

'''Personnel riskRisk managementManagement'''

* Personnel risks arerefer definedto asthe risksrisk arising from insufficient staffing or inadequate employee behavior.

* Qualified employees are essentialnecessary for customer-oriented business and the implementation of keyimportant projects.

* TheTo company mitigatesmitigate personnel risks, throughthe trainingcompany and continuingemphasizes education and training.

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

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

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

===== Information and IT securitySecurity risksRisks =====

{{chunk|doc=9fth4kgfqj|c=116109|p=26}}

* Information and IT security risks describe riskspotential thatthreats could potentially jeopardizeto the completeness, confidentiality, or availability of information or IT systems.

* IT security risk includes cyber securitycybersecurity risk.

* The availability of applications, the security and confidentiality, and the integrity of the data used are crucial for the company.

===== Outsourcing risksRisks =====

{{chunk|doc=9fth4kgfqj|c=117110|p=26}}

'''Outsourcingoutsourcing risks management'''

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

* OutsourcingA risksdistinction areis differentiatedmade bybetween the externalization ofoutsourcing tasks up to sales and the externalization ofoutsourcing sales services.

* Risks from outsourced functions or services are integrated into the risk management process, includingand identificationare identified, assessmentassessed, 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 the necessary information and instruction rights from the service providersprovider, allowingwhich authorizes the Management Board to issue individual instructions at any time and influence outsourced areas.

===== ICT risksRisks =====

{{chunk|doc=9fth4kgfqj|c=118111|p=27}}

'''ICT Riskrisk Managementmanagement and DORA compliance'''

* Information and communication technology (ICT) risks manifest as operational risks withacross various subcategories.

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

* ThisThe Group Security function is performedresponsible byfor Groupthis SecurityICT forrisk control function within the company.

* The operational integration of ICT risk management into the overarching risk management system occurred induring the reporting year and is continuously being expanded.

===== Other materialMaterial risksRisks =====

* 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 created the conditions for focused organicsubstance growth.

====== Project risksRisks ======

{{chunk|doc=9fth4kgfqj|c=121113|p=27}}

'''Projectproject risks management'''

* Project risks describe risks that endanger the intendedplanned course or non-achievement of project goals, including strategic and IT-related projects.

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

* The company uses establishedmandatory processes and measures to control and manage both the project portfolio and individual projects.

* ThisThese ensuresmeasures ensure that countermeasures can be taken in a timely manner if difficulties arise inregarding the achievement achievingof time and quality goals.

====== Reputation risksRisks ======

{{chunk|doc=9fth4kgfqj|c=122114|p=27}}

* TheseReputation risks are closely monitored.

* A professionalProfessional complaint management system is in place to reduce reputation risks.

* Crisis communication management proceduresis are establishedregulated.

{{chunk|doc=9fth4kgfqj|c=123115|p=27}}

'''Emergingemerging Risksrisks identificationdefinition and management'''

* Emerging Risks are identified and managed annually within the company's risk management framework through a groupGroup-wide coordinated process.

====== Sustainability risksRisks ======

{{chunk|doc=9fth4kgfqj|c=124116|p=27}}

'''Sustainability risks definition and managementRisks'''

* Sustainability risks are events or conditions from the Environmentenvironmental, Socialsocial, or Governancegovernance (ESG) areas that can have actual or potentialpotentially significant negative impacts on the earnings, financial position, asset situationassets, and 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, and the company monitors these risks within its risk management system.

=== Forecast and opportunityOpportunity reportReport ===

{{chunk|doc=9fth4kgfqj|c=125117|p=28}}

* The following statements are based on expert assessments from third parties and on the company's owninternal planning and forecasts, whichrepresenting area consideredsubjective conclusiveassessment.

==== Economic conditionsEnvironment ====

{{chunk|doc=9fth4kgfqj|c=126118|p=28}}

'''Global economic outlook and growth drivers'''

* ThisGlobal trendeconomic growth is expected to continue this trend in [[Definition:Year 2026|2026]], with globala economicprojected YoY growth projected atof 2.7% YoY.

* Stable growth is supported by the delayed effecteffects of central banks nearing the end ofbank interest rate cuttingcycles cyclesending and sustainedcontinued high/rising fiscal stimulus.

* The global economy is gradually adapting to the new global trade order, with no expectation of further escalation of US-initiated trade conflicts or a collapse in increased AI investments.

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

* External trade in the Eurozone faces [[Definition:Headwind|headwinds]] from global trade reordering, including weak exports and risingincreasing (cheaper) 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 decline in the Eurozone's inflation rate.

* Consumer restraint among lower and middle-income households in the US, due to a weak labor market weakness and increasedhigher prices (partlypartially tariff-related), may be partially offset by wealthy households, but no further acceleration is expected.

* InvestmentsInvestment in AI areis expected to continue providing tailwinds in the US, though it remains to be seen if the high investmentinvestments announcementsannounced fromby major tech companies will 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 peak 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=127119|p=28}}

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

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

* DiversePrimary downside risks include various geopolitical conflicts (e.g., Venezuela, Greenland, Iran, Taiwan, Ukraine), are a primary risk thatwhich could lead to significant deterioration at any time.

* Potentially unstable government constellations in many countries (e.g., US midtermsMidterms, German state elections, France, Japan) also pose aadditional riskrisks.

* Political attacks on the FedFederal Reserve and other institutions in the US represent a significant risk to political and economic stability.

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

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

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

==== Capital marketsMarkets ====

{{chunk|doc=9fth4kgfqj|c=128120|p=28}}

* The European Central Bank (ECB) is expected to maintain its deposit rate at 2.00% by the end of [[Definition:Year 2026|2026]], supported by an inflation rate slightly below the 2% target and moderatemoderately positive economic momentum.

* The persistent US inflation above 2% limits the Federal Reserve's room(Fed) foris maneuver,expected to butimplement two further interest rate cuts of 0.25 percentage points each, arebringing expectedthe US key interest rate to 3.25% by the end of the year, due to a weakening US labor market and political pressure.

{{chunk|doc=9fth4kgfqj|c=128120|p=29|cont=1}}

* The yield on 10-year German government bonds is expected to rise towards 3.00% during the year due to increased issuance activity forto finance additional expenditures.

* The yield on 10-year US Treasuries is expected to be 4.25% at year-the end of the year, only slightly above its 2025 value at the end of 2025.

* Slight further price gains for equities are anticipated, provided that the mentionedaforementioned risks do not materialize to a greater extent.

==== Future industry situation ====

{{chunk|doc=9fth4kgfqj|c=129121|p=29}}

'''Macroeconomic environment and growthmarket outlook'''

* Growth prospects for the national market in the coming years are primarily supported by announced fiscal spendingexpenditures.

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

{{chunk|doc=9fth4kgfqj|c=130122|p=29}}

* The German insurance market is expected to continue growing untilthrough [[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=131123|p=29}}

* For [[Definition:Year 2026|2026]], the German [[Definition:Property & casualty|P&C]] insurance segmentsector expects slight follow-up effects in sum and premium adjustments, driven by cost increases and inflation from recent years.

==== Opportunities from thechanges developmentin of frameworkunderlying conditions ====

===== Digitalization =====

{{chunk|doc=9fth4kgfqj|c=132124|p=29}}

'''Digitalization strategy and AI implementationstrategy'''

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

* Digitalization offerscreates new opportunities in customer communication, claims processing, data analysisevaluation, and the development of new business areas.

* The companyTalanx Group is undertaking numerous projects to shape digital transformation, including creating added value through artificialArtificial intelligenceIntelligence (AI).

* These AI toolssolutions enableallow for real-time insights from unstructured data in text or image formatform to support employees.

* Benefits for customers and employees are already evident, primarily through time savings throughfrom optimized processes, while adhering to data protection and compliance regulations.

* ThisThese includesprocesses adhere to applicable data protection and compliance regulations, including the European Union's (EU) Artificial Intelligence ActRegulation (AI Act), which came into force on August 1, 2024, with most regulations to be implemented by August 2, [[Definition:Year 2026|2026]].

===== Knowledge management =====

{{chunk|doc=9fth4kgfqj|c=133125|p=29}}

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

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

* ResultsGenerating and implementing new solutions fromand ideas faster than expected through the Best Practice Lab arecould providedpositively toimpact Talanxpremium Groupdevelopment companiesand toearnings, continuouslypotentially improveleading theirto processes andexceeding methodsforecasts.

{{chunk|doc=9fth4kgfqj|c=136126|p=3029}}

'''[[Definition:YearAgile 2026|2026]] Outlooktransformation and Forecastsoutlook'''

* A slight decrease in claims expenses for insurance claims is expected, despite an anticipated normalization of natural catastrophe claims in the coming year.

* A moderate decrease in insurance operating expenses is projected, followingdue to continued cost discipline.

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

* The non-underwriting result is expected to decline slightly overall, leading to a net income slightly below the previous year for the coming year.

==== Types of insurance (Appendix 1 to the management report) ====

{{chunk|doc=9fth4kgfqj|c=137127|p=31}}

'''Insurance types offered'''

* The following types of insurance were operated in the 2025 financial year as individual, group, or collective insurance policies against single or ongoing premiums: 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=138128|p=32}}

{{chunk|doc=9fth4kgfqj|c=138128|p=33|cont=1}}

== Annual financialFinancial statements ==

{{chunk|doc=9fth4kgfqj|c=139129|p=33}}

* IncomeProfit and Loss Statement

* Notes to the IncomeProfit and Loss Statement

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

{{chunk|doc=9fth4kgfqj|c=140130|p=34}}

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

|+ Balance Sheetsheet as of December 31, 2025

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

! 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

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

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

| style="text-align:left" | —481,615

| 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

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

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

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

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

| style="text-align:left" | —3,282,259

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

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

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

|! colspan="25" style="text-align:left" | I. Receivables from direct insurance business from:

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

| style="text-align:left" | —84,723

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

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

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

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

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

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

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

| colspan="2" style="text-align:left" | F. Deferred tax asset from assetthe offsettingnetting of assets

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

| style="text-align:right" | <strong>4,503,332</strong>

{{chunk|doc=9fth4kgfqj|c=140130|p=35|cont=1}}

! class="col-s" style="text-align:leftright" | Liabilities

! class="col-s" style="text-align:leftright" | Liabilities

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

| style="text-align:left" | —I. Subscribed capital

| colspan="2" style="text-align:leftright" | I. Subscribed capital—

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

| colspan="2" style="text-align:leftright" | II. Capital reserves—

| style="text-align:leftright" | —

| style="text-align:leftright" | —

! colspan="5"| style="text-align:left" | B. Technical provisions

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

! colspan="4"| style="text-align:leftright" | I. Unearned premiums—

| style="text-align:left" | —2. thereof: share for business ceded in reinsurance

| style="text-align:leftright" | —

!| style="text-align:left" | II. Provision for unexpired risks

! colspan="4"| style="text-align:leftright" | II. Premium reserves—

| style="text-align:left" | —2. thereof: share for business ceded in reinsurance

| style="text-align:leftright" | —

!| style="text-align:left" | III. Claims outstanding

! colspan="4"| style="text-align:leftright" | III. Provision for outstanding claims—

| style="text-align:left" | —2. thereof: share for business ceded in reinsurance

| style="text-align:leftright" | —

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

! colspan="4"| style="text-align:leftright" | IV. Provision for profit-dependent and profit-independent premium refunds—

| style="text-align:left" | —2. thereof: share for business ceded in reinsurance

| style="text-align:leftright" | —

| 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:left" | VI. Other technical provisions

! colspan="4"| style="text-align:leftright" | VI. Other technical provisions—

| style="text-align:left" | —2. thereof: share for business ceded in reinsurance

| style="text-align:leftright" | —

| style="text-align:leftright" | —

| style="text-align:leftright" | —

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

| 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:left" | —II. Other provisions

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

| style="text-align:leftright" | —

| style="text-align:leftright" | —

! colspan="5"| style="text-align:left" | D. Other liabilities

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

! colspan="4"| style="text-align:leftright" | I. Liabilities from direct insurance business to—

| style="text-align:leftright" | —

| style="text-align:leftright" | —

| 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:right" | 651—

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

! class="col-s"| style="text-align:right" | 4,150,862—

! class="col-s"| style="text-align:right" | 4,503,332—

{{chunk|doc=9fth4kgfqj|c=141131|p=35}}

* PensionThe pension provision, including uncollected pensions, recorded under liabilitiesLiabilities B.III. in the balance sheet for fiscalthe yearend 2025,of includingthe uncollected2025 pensionsfinancial year, isamounts to EUR 63,698.

* The pension provision recorded under liabilitiesLiabilities B.III. in the balance sheet was calculated in accordance with § 341f and § 341g HGB, and the legal ordinance issued under § 88 Abs. 3 VAG.

*=== Income Statementstatement for the period from January 1 to December 31, 2025 ===

{{chunk|doc=9fth4kgfqj|c=144132|p=36}}

| style="text-align:left" | —

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

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

| style="text-align:left" | —

| style="text-align:left" | —

! colspan="6" style="text-align:left" | a) ClaimsPayments paidfor insured events

| style="text-align:left" | —

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

| style="text-align:left" | —

| style="text-align:left" | —

| style="text-align:left" | —

| style="text-align:left" | —

! colspan="6" style="text-align:left" | 7. OperatingUnderwriting expenses for own account

| style="text-align:left" | a) Gross operatingunderwriting expenses

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

| style="text-align:left" | —

| style="text-align:left" | 10. Change in equalizationfluctuation reserve and similar reserves

{{chunk|doc=9fth4kgfqj|c=144132|p=37|cont=1}}

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

! style="text-align:left" | II. Non-technicalunderwriting account

! style="text-align:left" | II. Non-technicalunderwriting account

! style="text-align:left" | II. Non-technicalunderwriting account

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

| colspan="2" style="text-align:left" | aa) Income from land, rights equivalent to land, and buildings, including buildings on third-party land

| style="text-align:left" | d)—

| colspan="2" style="text-align:left" | d) Gains from the disposal of investments

| style="text-align:left" | e)—

| colspan="2" style="text-align:left" | e) Income from profit-sharing agreements, profit and partial profit transfer agreements

| style="text-align:left" | a)—

| colspan="2" style="text-align:left" | a) Expenses for the administration of investments, interest expenses, and other investment expenses

| style="text-align:left" | c)—

| colspan="2" style="text-align:left" | c) Losses from the disposal of investments

! colspan="3" style="text-align:left" | <strong>Income from ordinary activities</strong>

! style="text-align:right" | <strong>109,493</strong>

! 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" | <strong>Net income/net loss or retained earnings</strong>

{{chunk|doc=9fth4kgfqj|c=145133|p=37}}

* Note: Expense items are markedindicated with a minus sign before the corresponding amount.

=== Company Information about the company ===

{{chunk|doc=9fth4kgfqj|c=146134|p=38}}

'''Company registration details'''

=== Accounting and Valuationvaluation Methodsmethods ===

{{chunk|doc=9fth4kgfqj|c=147135|p=38}}

* The company's annual financial statements and management report are prepared accordingin toaccordance with 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 Regulation onInsurance Accounting for Insurance UndertakingsOrdinance (RechVersV), inas theirapplicable versionsto validinsurance ascompanies ofat the balance sheet date.

{{chunk|doc=9fth4kgfqj|c=148136|p=38}}

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

* Intangible assets are recognizedcapitalized 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 investmentsparticipations are recognizedvalued 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).

* 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 in the form of bearer bonds, registered bonds, promissory note receivables, loans, and loans to affiliated companies and companies with which an equity relationship exists are held in the portfolio.

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

* If the conditions underof IDW RS HFA 22 are met, these structured products are uniformly recognized at amortized cost according to the provisionsregulations for capital investments recognized as fixed assets, using 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 reverse write up assets-downs (§ 253 Abs. 5 Satz 1 HGB), write-ups are made to assets writtenthat downwere depreciated in previous years are written, up through profit or loss to the extentamortized of their amortizedacquisition costcosts or a lower market or stock exchange value, if the reasons for the permanent impairment have ceased to exist and a recovery in value has occurred.

{{chunk|doc=9fth4kgfqj|c=151137|p=39}}

'''Receivables and other assetscash valuation'''

* DueCost tobookings incurred after the cost cut-off beforedate theare balancerecorded sheetunder date,other costreceivables bookingsdue incurred afterto the cost cut-off datebefore arethe recordedbalance undersheet other receivablesdate.

{{chunk|doc=9fth4kgfqj|c=152139|p=40}}

'''Equity and Reinsurancereinsurance Accountingaccounting'''

* ContractualReinsurers' contractual shares of reinsurers in relevant gross positions are determined and booked for material reinsurance contracts as of the current reporting date.

* SelectedFor selected reinsurance contracts use, a one-month time lag relativeis applied to gross figures, with separate estimated bookings for material movements (e.g., major lossesclaims) considered up to the current reporting date.

{{chunk|doc=9fth4kgfqj|c=153141|p=40}}

* For participating business, data from leading insurersinsurance companies is adopted.

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

* A late claims reserve is calculated for claims not yet reported atby the balance sheet date, based on historical data.

* Actuarial methods determine theThe number of expected late claims and the expected average claim amount are determined actuarially.

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

* IfIn currentindividual informationcases iswhere availablecurrent ininsights individualare casesavailable, an appropriate amount is reserved based on thatthis information.

* The pension reserve calculated according to § 65 VAG and the reserve for expected claims handlingsettlement expenses are also reported.

* The claimsreserve handlingfor expensesettlement reservecosts comprises external and internal costs.

* ExternalThe external claims handlingsettlement expensecost reservesreserve areis establishedformed specifically for each individual claim.

* InternalThe claimsinternal handlingsettlement expensecost reservesreserve areis determined using a factor-based approximation method, which uses paid claims as a volume measure for incurred costs.

* This method uses paid claims as a volume measure for incurred costs and derivesdetermines future internal claims handlingsettlement expensecost reserves as a percentage of current claims reserves for compensation.

* TheA reduction of the determined factor is reducedapplied based on line-specific experience, assuming that somepart claimsof handlingthe has alreadyclaims occurredsettlement for known claims has already been performed.

{{chunk|doc=9fth4kgfqj|c=154142|p=40}}

'''Pension reserves 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 para. 4 of the Reserve Regulationformed as the minimum of the originally applicablevalid maximum technical interest rate and the reference interest rate, according to § 5 Abs. 4 of the Deckungsrückstellungsverordnung.

* The calculation of the fluctuation reserve applies the regulations ofaccording to § 29 and the appendix to § 29 RechVersV, as well as the Insuranceregulations Reportingof the OrdinanceVersicherungsberichterstattungsverordnung (BerVersV).

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

* PensionThese obligations are recognized at the necessary fulfillment amount according to § 253 para. 1 sentence 2 HGB and discounted according to § 253 paraAbs. 2 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 OrdinanceRückstellungsabzinsungsverordnung (RückAbzinsV) as of September 30, 2025, and projected for December 31, 2025, with an assumed remaining term of 15 years.

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

{{chunk|doc=9fth4kgfqj|c=155143|p=42}}

* The considered fluctuation considered corresponds to company-specific probabilities diversified by age and gender.

* Securities-linked employee-financed commitments are exclusively benefit-congruentpension commitments reinsured pensionon commitmentsa performance-congruent basis, which must be valued according to IDW RS HFA 30 Rz. 74 in conjunctionaccordance with § 253 paraAbs. 1 sentenceSatz 3 HGB.

* For these commitments, the fulfillment amount is at least equal to the fair value of the coverage capital of the life insurance contract plus profit participation.

* Deferred income is reported under passive deferred items iffor itrevenues representsreceived before the reporting date that represent income for a specific period after the reporting datethereafter.

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

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

{{chunk|doc=9fth4kgfqj|c=156148|p=44}}

! class="col-s" style="text-align:right" | Prior year carryingbalance amountssheet values

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

! class="col-s" style="text-align:right" | CurrentCarrying amounts fiscal year carrying amounts

| 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" | Total B.II.

|! class="col-s" style="text-align:right" | 442,508

|! class="col-s" style="text-align:right" | 51,515

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 12,385

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 23

|! class="col-s" style="text-align:right" | 481,615

| 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

|! style="text-align:left" | Total B.III.

|! class="col-s" style="text-align:right" | 3,318,087

|! class="col-s" style="text-align:right" | 1,720,402

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 1,738,520

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 17,711

|! class="col-s" style="text-align:right" | 3,282,259

|! style="text-align:left" | Total B.

|! class="col-s" style="text-align:right" | 3,760,811

|! class="col-s" style="text-align:right" | 1,771,917

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 1,751,121

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 17,734

|! class="col-s" style="text-align:right" | 3,763,874

|! style="text-align:left" | Total

|! class="col-s" style="text-align:right" | 3,764,764

|! class="col-s" style="text-align:right" | 1,771,917

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 1,751,121

|! class="col-s" style="text-align:right" | 0

|! class="col-s" style="text-align:right" | 19,534

|! class="col-s" style="text-align:right" | 3,766,027

{{chunk|doc=9fth4kgfqj|c=157149|p=44}}

{{chunk|doc=9fth4kgfqj|c=158150|p=46}}

'''Valuation of equity investments'''

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

* Companies valued using the incomeearnings approachvalue method are typicallygenerally setrecognized at the present value of future distributable financial surpluses (incomeearnings value).

* For companies that subscribe toholding unlisted equity instruments (investment vehicles for Private Equity, Real Estate funds, and other alternative investments), valuation is analogous to directly held comparable instruments using the Net Asset Value method.

* Fair values of special funds held in the portfolio correspond to the determined redemption price.

{{chunk|doc=9fth4kgfqj|c=159153|p=46}}

'''Valuation of publicly traded equities and bonds'''

* Fair value for publicly traded shares and equity funds accounted forrecognized as fixed assets is determined using the EPS method (earnings per share) method, an income approach per share based on annual earnings expectations estimated by independent analysts or the higher market values.

{{chunk|doc=9fth4kgfqj|c=160154|p=46}}

'''Valuation of alternativefixed-income investmentssecurities andin swapsspecial funds'''

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

{{chunk|doc=9fth4kgfqj|c=161157|p=47}}

'''Investments with fair valuesvalue below book valuesvalue'''

* For the followingcertain investments accounted forrecognized at acquisition cost, fair values are below book values.

=== Investments with unrecognizedhidden lossesliabilities ===

{{chunk|doc=9fth4kgfqj|c=162158|p=47}}

|+ Carrying amounts, Fair values, and Balance by InInvestments EURwith thousandhidden liabilities

| style="text-align:left" | Loans to companies with which anthere equityis interesta existsparticipating interest

{{chunk|doc=9fth4kgfqj|c=163159|p=47}}

'''Avoided depreciationimpairments on investment propertiesinvestments'''

* These avoided depreciationsimpairments are considered temporary impairmentsvalue reductions.

{{chunk|doc=9fth4kgfqj|c=164160|p=47}}

'''ImpairmentPermanent impairment assessment of fixed-income securities andfor investment funds'''

* If information for a look-through approach is availablepossible, the assessment of the probable permanence of an impairment for sharesinvestment orfund stocks in investment fundsshares with aan hiddenunrealized burdenloss at the balance sheet date is based on the assets held inwithin the fund.

{{chunk|doc=9fth4kgfqj|c=165161|p=47}}

'''Extraordinary depreciation on investment propertiesinvestments'''

* Depreciation on investment propertiesinvestments includes extraordinary depreciation of EUR 11,492k (prior year: EUR 794k) in accordance withunder § 277 (Abs. 3) sentenceSatz 1 HGB.

{{chunk|doc=9fth4kgfqj|c=166162|p=48}}

* SignificantMaterial sharesholdings in affiliated companies and investments essential to the companyparticipations 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=167163|p=48}}

|+ Shareholders' equity, IncomeNet &amp;income, Share of capital by Name, registered office

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

! class="col-s" style="text-align:right" | IncomeNet income {{fn ref|1)|2=1) before profit transfer and distribution, data based on the latestlast 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=4) indirect participation, participation rateratio according to § 16 para. 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=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Infrastruktur Windpark Vier Fichten GbR, Bremen {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 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, CologneKöln {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 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, CologneKöln {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 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, CologneKöln {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

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

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

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

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

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

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

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

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

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

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

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

| style="text-align:left" | CEF BKR03 NL B.V., Netherlands, Amsterdam {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 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) andInformation neton equity and incomeannual figuresresults 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=4) indirect participation, participation rateratio according to § 16 para. 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=4) indirect participation, participation rateratio according to § 16 para. 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=4) indirect participation, participation rateratio according to § 16 para. 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=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Ferme Eolienne du Confolentais SNC, France, Toulouse {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Iberia Termosolar 1, S.L.U., Spain, Seville {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Infrastorm Co-Invest 1 SCA, Luxembourg, Luxembourg {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Le Chemin de La Milaine S.N.C., France, Lille {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Le Louveng S.A.S, France, Lille {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

| style="text-align:left" | Les Vents de Malet S.N.C., France, Lille {{fn ref|4)|2=4) indirect participation, participation rateratio according to § 16 para. 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=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

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

{{fn note|1=1)|2=1) before profit transfer and distribution, data based on the latestlast 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=4) indirect participation, participation rateratio according to § 16 para. 2 and 4 AktG}}

{{fn note|1=5)|2=Equity5) andInformation neton equity and incomeannual figuresresults relaterelates to the fiscal year from 30.6.2024 to 30.6.2025}}

{{chunk|doc=9fth4kgfqj|c=169165|p=49}}

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

{{chunk|doc=9fth4kgfqj|c=171166|p=49}}

'''DepreciationHGB depreciation of special funds'''

* Depreciation according to § 253 paraAbs. 3 sentenceSatz 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=172167|p=49}}

|+ To C.III. Other Receivablesreceivables

| style="text-align:left" | Receivables from affiliated companies {{fn ref|1)|2=1) Receivables mainly result from equityinvestment income and service transactions.}}

| style="text-align:left" | Receivables from consortiumsyndicated business

{{fn note|1=1)|2=1) Receivables mainly result from equityinvestment income and service transactions.}}

== CashTo D.I. Current balances with credit institutions, checks, and bankcash balancesin hand ==

{{chunk|doc=9fth4kgfqj|c=173168|p=49}}

== AccruedTo incomeE. and prepaidDeferred expenses and income ==

{{chunk|doc=9fth4kgfqj|c=174169|p=49}}

* The total amount of EUR 37,475k (prior year: EUR 32,601k) primarily consists of accrued interest.

==== To F. Active difference from asset offsetting ====

{{chunk|doc=9fth4kgfqj|c=175170|p=50}}

'''activeActive difference amount from asset offsetting'''

* This item includes the amount of covering assets exceeding the corresponding liabilities as defined in § 246 (Abs. 2) sentenceSatz 3 HGB.

{{chunk|doc=9fth4kgfqj|c=176171|p=50}}

{| id="t31" class="wikitable fintable"

|+ To F. Active difference from asset offsetting

! class="col-s" style="text-align:right" | 31.12.2025

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

| style="text-align:left" | SettlementFulfillment amount of netted liabilities from employee-financedfunded commitments

{{chunk|doc=9fth4kgfqj|c=177172|p=50}}

'''Life insurance contracts for pensionPension commitments'''

=== Notes to the Balance Sheet - Liabilities ===

==== To A.I. Subscribed capital ====

{{chunk|doc=9fth4kgfqj|c=178173|p=50}}

{| id="t33t32" class="wikitable fintable"

|+ Subscribed capital by fiscal year end

! class="col-s" style="text-align:right" | 31.12.2025

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

| style="text-align:left" | Balance at the beginning of the fiscal year

| style="text-align:left" | Balance at the end of the fiscal year

{{chunk|doc=9fth4kgfqj|c=179174|p=50}}

* The capital is divided into 51,000 registered no-par -value shares and is fully paid in.

==== To A.II. Capital reservesreserve ====

{{chunk|doc=9fth4kgfqj|c=180175|p=50}}

{| id="t35t33" class="wikitable fintable"

|+ Capital reservesreserve by fiscal year end balance

! class="col-s" style="text-align:right" | 31.12.2025

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

| style="text-align:left" | Balance at the beginning of the fiscal year

| style="text-align:left" | Balance at the end of the fiscal year

{{chunk|doc=9fth4kgfqj|c=181176|p=50}}

* The formation of a legal reserve is not required because § 150 Abspara. 2 AktG ("legalstatutory reserve fund") is already fulfilled by the formation of the capital reserve accordingin toaccordance with § 272 Abspara. 2 Nrno. 1 HGB.

=== To B. Technical provisions ===

{{chunk|doc=9fth4kgfqj|c=182177|p=51}}

{{chunk|doc=9fth4kgfqj|c=183178|p=51}}

{| id="t37t34" class="wikitable fintable"

| style="text-align:left" | b) AlliedCombined homehousehold contents insurance