057 INTERNAL CONTROLLING SYSTEMS GROUP MANAGEMENT REPORT Chap. 2 The return on the economic capital (RoEC) was 12.1 percent and has slightly decreased from the previous year's level. This is mainly attributable to the value in force of the health business which was included for the first time. The value in force is part of the economic capital in health and thus involves a considerable rise of the basis for the RoEC. This leads to the lower RoEC health disclosed. The profitability of the financial-services segment was largely maintained at a high level. The decreasing return on embedded value (RoEV) from 13.1 to 11.8 percent reflects the decline of extraordinary investment and tax items. Integration of internal management tools into the preparations for Solvency II The Solvency II project initiated by the Europe- an Commission aims at a revision of the regulatory requirements for insurance companies in Europe. In particular the capital requirements under the future solvency system are to be more closely linked to the specific business structure of a company's risks. Since for regulation purposes there is also the option of applying internal approaches, the AMB Generali Group has started at a very early stage to prepare for future requirements. Within the scope of these preparations the internal models are continuously enhanced and internal risk-management processes are checked with a view to future requirements. 2007 2006 % % RoEC life 10.1 10.8 RoEC property/casualty 20.7 15.0 RoEC financial services 13.0 14.0 RoEC health 11.2 18.3 RoEC total 12.1 12.3 Return on excess capital 2.6 2.2 RoEV normalized 11.9 11.3 Debt capital cost -0.2 -0.4 Extraordinary items (mainly investments and tax) 0.1 2.1 RoEV total 11.8 13.1 Performance management key return figures