Consider yourself lucky for not overheating the engine and blowing the head gasket.

Those two hoses are for the oil cooler, found on the 1992+ turbo 740s/940s. You should replace both hoses, and the plastic heater valve. I replace those three items every five to seven years. Waiting until they fail isn't my kind of maintenance. You might want to replace the other heater hoses and the radiator hoses while you are at it. The factory hose clamps have a 7mm hex head for adjusting. I use a 7mm socket on a 1/4" drive ratchet for removing and replacing the clamps. Jack the car up and block it, when the engine is cold, and drain the coolant using the 13mm drain. Using the 1/4" ratchet makes it fairly easy to deal with the hose clamps.

I also recommend replacing the coolant reservoir with one from a 960, and adding a coolant loss warning light. There is a good write up on this in the FAQ.

--
john