The investment of customer funds entrusted to VIG in the form of premium payments is one of the key duties of the Group and demands great responsibility. VIG therefore follows an investment strategy that can be considered conservative. The specific features of this strategy are governed by investment guidelines that are binding on every VIG Group company and are monitored continuously by the Group Asset Management unit and checked on a random sampling basis by the internal audit department. In addition to ensuring sufficient liquidity to satisfy insurance claims, particular importance is placed on diversifying the investment portfolio and on the returns that can be achieved while taking into account the overall risk exposure of the Group.
VIG was managing investments totalling EUR 29,905.56 million at the end of 2013. Of this amount, approximately 75% was invested in fixed income securities and loans, and approximately 9% in real estate. Only 2% was invested in the shares (not including shares in funds). Detailed information on the structure of investments is available in chapter Investments, equity and provisions. Thanks to this balanced, risk-conscious investment strategy, VIG suffered no major credit losses, even during the turbulence caused by the financial crisis. It is nevertheless important to continuously examine and optimise the structure of the investment portfolio.
VIG essentially retained its risk-averse asset allocation with only minor changes in 2013, reducing cash, term money and equity investments while increasing government and corporate bonds. In the area of fixed-income securities, top-rated bonds were bought to maintain the good rating structure of the portfolio in spite of the ongoing trend of downgrading by international rating agencies.
The conservative investment strategy is also extremely important given the long-term obligations created by life insurance. When making investments, top priority is given to ensuring that VIG will be able to continue fully satisfying these obligations in the future. The life insurance companies in the Group are required to use appropriate control measures to ensure that this is the case. Internal analyses of maturity matching are performed regularly in the Group using current market parameters (yield curve).